Bankruptcy spate

Recall this post? Remember the economic slowdown in late 2008 and 2009? Remember how Poland has got off it lightly? How do you assess the resilience of the Polish economy to weather the current storm?

One of the indicators of an economy’s strength is the number companies filing for insolvency. If only this gauge was to be taken into account, the Polish economy should be hailed as much more ailing than in 2009, when despite lower GDP growth more companies managed to get by.

2012, if it does not bring the end of the world just before Christmas, will go down in a history as a year of most spectacular bankruptcies. The list grows impressive and I surmise this is not the end yet.

For starters, Advadis. The company has actually been under water since 2009 and its misery lasted quite long, before liquidation was declared by the court. It has not been delisted yet and at the present its shares trade at 0.04 – 0.05 PLN and are “the cheapest” on the whole Warsaw Stock Exchange’s main market. The risk associated with price changes is hence noteworthy. Although a change of price of one tick resulting in increase of 25% sounds alluring for a refined speculator, I keep away from such stocks, for sake of their low liquidity and intrinsic value no higher than zero.

In March Dolnośląskie Surowce Skalne, lead contractor of middle section of A2, which took over responsibility for the hapless section, filed for insolvency. In April the court declared its liquidation, which was later changed to bankruptcy arrangement. I have no hopes the firm will ever recover. The Silesian company dealing with rock extraction has not risen to the challenge of building a motorway in an unfavourable market environment and under adverse terms of contract with the state road-building agency.

The avalanche grew apace in June. In the first days of this month PBG and its subsidiaries, including the biggest – Hydrobudowa, in the face of inability to settle their liabilities, filed for insolvency, which was soon declared in the variant involving protection from creditors. Woes of the construction industry have many causes. First and foremost is the price war which sparked off in 2010 when tender for road construction before Euro 2012 were put out. The companies, suffering from shrinking portfolio of orders, resulting from the economic slowdown, competed so heavily that they offered very low margins and accepted lack of revaluation clauses (allowing for price negotiations if prices of raw materials and other costs rise) and delayed payment deadlines in contract between them and the state road-building agency. Heavy leverage and liquidity squeeze knocked the company down I recently skimmed through some files at work and found an analytical report from August 2011 with ‘buy’ recommendation for PBG and target price of 155 PLN. Now shares of the firm are trading at around 6 PLN.

The next construction company queuing for bankruptcy was Polimex Mostostal, another one stricken by over-leveraging, losses on state-paid contracts and growing balance of accounts receivable. In mid-July the company sent a letter to financing banks and bondholders in which offered to enter into a “standstill agreement”, under which creditors would hold back from claiming their money for four months. In fact it meant buying time to revive the company and admitting severity of financial hardship. The agreement has been reached and the future of Polimex remains an open issue, but if creditors allow it to reorganise I see a bright future before it.

Construction companies themselves are not the only victims of the crisis. The wave has wiped out several subcontractors, left many workers jobless, done out of money creditors, i.e. bank and holders of seemingly safe investment fund units.

2011 was a hard year for the fish industry. All companies from it listed on the stock exchange have not been doing well. The reason for troubles were high prices of fishes on international market that could not be passed onto customers. The trend reversed in late 2011, but one of the companies in the sector, Wilbo, did not resist the pressure and popped off in July.

Retail sector in Poland seemed resilient to economic slowdown, but 2012 saw one notable fatality in this industry. Delicatessen network, Bomi, filed for bankruptcy in late June. The Company had been mismanaged for years and incurred losses since 2010. I blame the flawed business model for the downfall. In Polish society in which where you shop does not reflect upon your social status, luxurious and expensive delicatessen have a narrow niche on the market. Bomi positioned itself as a posh shop for the better-off, many of who actually prefer to buy groceries in supermarkets and discounter shops. Bomi’s strategy proved a big failure and the company has eventually gone under. The chain will probably be taken over by one or more of the competitors.

Summer is the holiday season and a year without a bankruptcy of a travel agency could not be deemed memorable. Early July saw the spectacular downfall of Sky Club, legal successor of well-known Triada. Within hours the agency ceased to sell trips and send its customers for holidays. Most of eighteen thousand of tourists who holidayed with Sky Club had to return to Poland ahead of plan, those who have not set off yet, would not go at all. The liability of the tour operator was covered by an insurance guarantee of 25 million zlotys, sufficient merely to organise comeback to Poland for tourists stuck abroad. The afflicted clients, surprised by the bankruptcy before the departure, will be wrangling to claim their money for months. I do not dare to assess their chances to recover money. Needless to say several small travel agencies declared insolvency so far.

Bomi and Sky Club dragged down IDM brokerage firm. The once renowned company has not officially gone under water, but its troubles are apparent. It lost many of its own and its clients’ funds in stocks and bonds of the companies described above.

OLT Express enter the Polish market on 1 April 2012. By offering competitive prices for domestic flights (99 PLN) it beat competitors and soon gained many clients. Its lucky string has not lasted long. On Friday the operator officially suspended its operations, the cited reason is cutting off funding from lessors and key stakeholder, Amber Gold, a mysterious vehicle, black-listed by the Polish Financial Supervision, which offers high-yielding deposits, allegedly backed in gold, incidentally said to be a Ponzi scheme.

Who next? Hard to predict. Economic indicators, including faltering consumer confidence, point at lean times, so some more spectacular business failures might be witnessed this year.

Still reliable?

I would always resent when somebody reiterated the common belief that French cars are crappy. Most people hold the opinion they stand out in terms of design but several glitches, mainly electronics going bonkers, take the gloss off the well-shaped bodywork.

I defied this conviction by citing the example of Renault Megane which has belonged to my family for nine years now. My father bought it brand-new in 2003 and signed it over to me last year. The car has a very low mileage (53,067 kilometres now) – the upshot of taking on average one longer (more than 500 km to the destination and back in total) trip a year and using it in town when justified only.

Until last month, the car let us down on average less than once in two years. It had a bad track record in the third year of usage – then within one summer of 2006 it had three minor breakdowns – first revolutions sensor packed up, then central locking system close all doors except one, later boot door lock disintegrated. It had a more serious breakdown in September 2010, when it had to be towed away to Renault garage after ignition coils packed up, but as they’d been three years overdue for replacement I’m putting it down to Renault mechanics’ negligence.

Never look a horse gift in a mouth (I paid no money to my parents for the car), but over the year of owning it I had to replace a battery last autumn and have the brakes changed, but these were just the effects of wear-and-tear. The car withstood temperatures below –20C without any problems, but then in early June something began to clatter when I cranked up the engine, as shot on this video. The sequence is exactly the same. Revolutions go up, then something clangs, rattle or gives off some other sort of annoying noise and the engine cuts out. Right away I crank it up again, the rattle is not as loud as at first attempt, but revolutions level off on flush gear level. Funnily enough, it occurs randomly, and for example when I started the car after 13 days of sitting totally idle during my illness, it fired up beyond reproach. The cause of the nuisance is the dephaser pulley (koło zmiennych faz rozrządu for my Polish readers), a very common glitch in Megane II 1.6 16V engine. Renault has never officially admitted it is a manufacturing defect in this model and never recalled cars affected by it, but if you drive a hard bargain you can expect to have the repair partly refunded. I haven’t had it fixed yet, as the problem is not exacerbating (i.e. the engine does not cut out when running on flush gear), but I will have it done before winter together with the whole cam set (camshaft, timing belt, pumps, etc) due for replacement after each five years. Estimated expense – some 2,000 PLN.

On Monday two weeks ago while driving to work I opened a window in driver’s door and unfortunately couldn’t shut it. Instead of leaving the car on P&R car park, I had to drive to Renault garage. The first diagnose sounded like a sentence. The whole system, including hydraulic elements and little engine was defective, the cost of the new part – over 1,000 PLN, some 10% of the car’s market value – an overt absurdity. I needed the car for the afternoon so I asked the mechanics to dismantle the door, assemble the window in a closed position and check what actually was wrong. Lucky me, only the engine packed up, while hydraulics, despite some signs of wear and tear, was still in working order. I made an arrangement for a repair on Friday…

On Wednesday I pulled up to the petrol station to fuel up the car. I was again lucky, not to be running out of petrol, because I couldn’t simply put the pipe of the fuel dispenser to the petrol cap. Again, the hydraulic element packed up. A quick call to Renault garage and a request for a more comprehensive service on Friday. My bill as I was picking the car up was 640 PLN, therein some 250 PLN for spare parts, original, yet quite inexpensive and almost 400 PLN for labour charges. A man-hour there will set you back 160 PLN before tax. Add up 23% VAT and subtract my 15% loyalty programme discount and this gives you roughly 167 PLN for an hour spent by a well-trained mechanic mending your depreciating tin.

After three letdowns over two months, I fear next breakdowns and bills charged by Renault. There is a chance that nothing packs up for many months, but the car has nine years and even despite low mileage some of its components might have reached the end of their useful lives. I can also turn to a private garage rather than keep on letting Renault rip me off, but the car is stuffed with electronics so much that in some cases a mechanic is helpless if he can’t hook the vehicle up to the computer.

Now I’m facing two options – keep sinking money into the car, or buy a new one. I don’t mind driving an old car, I’m only concerned about its reliability and expenses incurred to keep it going. The old car will surely require some outlays, but the brand-new one is a bigger one-off expenditure and would prompt me to buy a full motor insurance. On the other hand, a brand-new vehicle usually gives the comfort of reliability and if even if something breaks down, it should be covered by a warranty (but beware and read all provisions in a warranty statement, including exception printed in a small font at the bottom of a page).

Actually it’s not the right time to have the car replaced, even having to spend some 3,000 PLN a year to keep it running is less than motor insurance premium (at least 2,000 PLN in the first year for a brand-new small car worth between 40,000 – 50,000 PLN) and less than depreciation in the first year of using it (25% of the showroom price evaporates over the first year).

I can still take this car for a longer trip without fearing an unexpected breakdown. All described above defects could have occurred in a younger car with a lower mileage (dephaser pulleys pack up even after 20,000 kilometres in defective Meganes II and window opening mechanisms can stop working even in brand-new cars) so I’m intent on taking care of my Megane and dreaming of a company car, mindful that the best years for getting perks from employers are gone…

Heavy Sunday...

The length of today’s musings is sponsored by a hangover. I got tanked up yesterday because I planned and wanted and I feel no remorse.

In brief, drinking around half a litre of vodka within some four hours by a 24-year-old male, 190 centimetres tall, weighing 70 kilograms, who used to be well-trained in boozing, currently seldom looking for occasions to indulge in consumption of alcohol beverages can result in:
1) joyful frame of mind, upbeat attitude towards challenges and unwarranted friendliness towards people,
2) not feeling dizzy, nor having problems keeping the balance (to my huge surprise),
3) not having stomach turned upside down and having its contents thrown up inadvertently, albeit it has to be emphasised at the certain moment I knew I’d had enough and drinking a single droplet more could end up very unpleasantly,
4) having irregular blood pleasure and heartbeat – again this body reaction proves to be the biggest peril affecting well-being just after drinking on the day after,
5) sleeping too shortly and waking up at 3 a.m., after mere four hours of sleep (most people sleep well while hammered),
6) being unable to sit behind the wheel for the whole day (better not to play with the fire…) and reluctant to cycle (weather’s perfect in terms of temperature today!),
7) having serious problems to string together a blog post longer than a few sentences,
8) trying harder to acquire some knowledge while poring over the 4th volume of my CFA level 1 textbook.

All in all, the state of intoxication brings about a huge temptation to revert to it more often. This is the simplest path to losing control over drinking and falling into a dire addiction, so it’s much better to resist it and wait patiently for the next occasion…

Not fond of extremes…

It’s been the ninth day of the first heat wave in Poland this summer. Weather forecasters avow the mass of Saharian air is about give way to cooler Atlantic air and the period of temperatures above +30C is drawing to a close. Nine days is still fewer than seventeen, which is the length of cold snap that gripped Poland between 27 January and 12 February this year.

Being fed up with the big freeze, I pledged not to gripe about the big heat when it comes. So now, not a word of complaint, only a comparison of those two types of extreme weather. Unlike most people, I prefer sea climate, with mild winters and summers and lots of precipitation.

Temperatures in the range of -15C and +30C are what I call bearable. If they drop below, or rise above it, withstanding the weather begins to be a nuisance. If you are fond of them anyway, enjoy the paragraphs below.

Extreme temperatures hit your wallet. When it’s cold, your central heating has to run at full blast to keep your dwelling warm. Sooner or later the heating bill has to be settled. This is the direct and palpable expense incurred by the cold weather. The cost of heat is dispersed in many other expenses – of electricity, if you have air-conditioning system, but this is still uncommon at homes in Poland, water – you need to take baths and change clothes even a few times a day, if you need to water the garden and it doesn’t rain, the water bill skyrockets.

Garments. Putting on several layers of clothes to keep you warm when it’s –20C outside is not pleasant, nor convenient, but if you are outside and wrapped up, it’s still alright. Troubles set in when you find yourself in a warm interior and you begin to swelter, since it’s not always possible to take off all the unnecessary layers. When it’s hot outside, you naturally wear is little as possible. In principle, this is the upside of the heat wave, when you look at young attractive women, but in fact, if you’re not on holiday, in many situations you just can’t dress casually, or as casually as you’d like to. Wearing a suit in extreme weather is not a pleasure and I don’t dare to judge whether it’s worse to have to don it when it’s –22C or when it’s +32C. In the former case a solid overcoat and long johns are a must, in the latter you’re very likely to break sweat within second (unless you have a big tolerance of heat).

Staying at home. Here the frost has the edge. In Poland you can easily take shelter from cold at home (don’t mind the heating bill), while when air-conditioning is seldom installed in private houses (although prevalent in office and public buildings), therefore dwellings heat up and after a few of excessive warmth outside and the heat is inescapable.

There are people who prefer to stay at home when temperatures go into extremes. This is visible if you take a stroll on a lazy Sunday afternoon when temperature hits the day-time high. No matter if the high is –15C or +35C, there will be almost surely no pedestrians and sparse cars in sight. When in need to move around you have four basic choices: on foot, by bike, by public transport and by car. If you walk, depending on the weather you have to either dress a lot, or almost not at all and be exposed to extreme temperature. In winter cycling is rather impossible, in the summer it can be nice, as long as the temperature is nice (for me up to +25C). If you take a longer trip by bike, don’t forget the headwear and litres of water to prevent your body from dehydration (my scribble begins to resemble agony aunt’s handbook). Public transport vehicles which run overground have a tendency to fail when it’s very cold. Rails sometimes crack, so your tram or train may not come in time and some badly-maintained buses might not start after a night in the depot. Other potential inconveniences include broken down heating and doors jamming when opened and letting chilly wind inside. On hot summer days breakdowns are rather rare, though engines can overheat, or rails can distend, but the real plague in Warsaw these days are defective air-con systems. Passengers report temperatures inside vehicles of +44C. No wonder a tram driver passed out a few days ago in such heat. Going by car looks then like a pleasure… If you have a garage… In winter the facility saves you scrapping hard rime of the windows (even if these are only side windows, the exercise may bring you close to a frostbite), cold-starting the car (not a problem, if the vehicle is properly maintained) and heating it up before you pull out, or grappling with gear lever before the oil runs thin. In the summer the temperature inside your car sitting in the sun may rise even to +70C, so it is best to park it under the roof, or on the eastern side of the building, so that in the afternoon it is in the shadow. The salvation comes with the air-conditioning, these days common even in low-end cars. Unfortunately if you use it often, you risk exposure to temperature shocks and resultant illness and you’ll be bound to visit the petrol station much sooner, as the device guzzles petrol without scruples… The advantage of the summer is that you can leave your car sitting for several days and it’ll start without problems. In the winter not using a car for a longer period of times means running a risk of having problems starting it.

In terms of people’s moods, below minus twenty a typical frame of mind is a well-balanced blend of weariness and joy. On one hard, withstanding the frost is pain in the arse, but on other we don’t give up to it. It’s chilly outside, but we have money to pay for the heating, warm clothes to wear, our reliable cars don’t let us down and we persevere. In the summer most people are overwhelmed with fatigue and aggression. Hot, so hot-tempered. A small spark is sufficient to break out a huge quarrel, people are inattentive, impatient, sleepy and simply worn-out.

The above can be a not-the-worst example of a “pros-and-cons” essay. May copycats draw inspiration from it.

Confession

Outside +33C, inside +28.5C, despite external rollers pulled down. I dread to think how hot it would be in my room without them. But some five months ago when temperatures in the morning were hitting minus twenties, I promised not to gripe about the heat wave when it comes. Frost has one advantage over heat – you can take shelter from it at home, assuming you have heating put in. Air-conditioning in private houses is not popular in Poland, so we swelter, but don’t have to think about the coming heating bill, wear several layers of clothing, wait for a public transport vehicle that fails to run according to timetable, etc.

In this temperature I feel like taking a nap; I even understand why siesta is so common in southern Europe in the summer months – when it’s above +30C you simply get drowsy.

Yawn… Not a temperature conducive to thinking, nor the time is right. I’ve had more than enough time to think many aspect of my life over when I had to stay in bed for some nine days in June.

Was it all just a coincidence? My first true holidays since September 2009, carefully planned, long awaited and two weeks before the departure, probably on my way to and from Poznań by train I contracted an illness. I blame this journey, because on my way to Poznań air-con was cooling the compartment at full blast, while on my way back it wasn’t running at all, windows were locked and inside the carriage you could breath in a abhorrent stench of fungus…

Then I disregarded problems with sore throat, they didn’t pass as they’d come, a small illness developed into a bigger one, I got one antibiotic, it helped for a while, but didn’t fully cure me. On the eve of my departure I came down with high fever and the next day it turned out I had the accursed laryngitis. The second antibiotic, despite staying in bed, didn’t help as well. Finally the third one, in the third week of my struggle against disease, set me free from the illness, but knocked me down solidly and played havoc with my heart and muscles (thank God it left out my digestive system…) and left me stranded at home, unable to do any physical exercise, not to drive car for a few days. Eventually, I recuperated…

So why did it strike in the period of holidays and in warm June, not when weather can contribute to catching a cold? Was it a punishment?

Could it be a punishment for the idea to go on holidays completely on my own for the first time? For the plan to do spend time exactly the way I want, without taking heed of other people’s opinions and without having to put up with their habits, whims, shortcomings? Many people spend holidays in such way, many would never try to go alone, but is something condemnable in it?

Could it be a punishment for being at loggerheads with my parents? For falling out over every smallest thing, just as a matter of principle? After all they’ve always wished me well and when we disagreed and eventually I reluctantly followed their advice, with hindsight they were proven right. And even if not, they had the courage admit their mistake and advise me not to listen to them every time. Now we all decided to mend our ways and get along quite well, but for how long?

Could it be the punishment for how I foster relationships? Isn’t it true that I meet and talk to people I call my friends too infrequently? With time most friendships have all loosed up, especially I began to feel it upon finishing the studies. How many times have I rejected meeting proposals just because I was too busy, too tired, short of time? How come relationships between people can fall apart so easily? Do social media replace real world – I checked today I have 113 friends on facebook, while many of them I haven’t seen for ages and I haven’t invited many people I know well and meet every day. Facebook doesn’t reflect reality. Real friends matter, not boosting your friend count on social networking portal.

Now a message dear fellow bloggers. In February I was giving a lift to Michael, the same day he met Scatts and Paddy. They all agreed we should call a blogmeet. Four months have passed since then, fourteen months have elapsed since the last blogmeet and… silence…

Could it be the punishment for my (excessive?) commitment to work? For trying to stand out, present myself as reliable and knowledgeable employee at the expense of my private life? Staying overtime, taking up more duties – it was always obvious to me, I could not refuse. Actually I learnt a lot, developed a lot, built a network of professional relationships and gained exposure to influential people in my organisation that can give me a stepping stone for a future promotion. Can I build such valuable relationships in a private life? Were those sacrifices justifiable? Until now, I received no financial reward for my endeavours, prospects of promotion or a pay rise are remote and I seem to appear as someone always eager to do the most unrewarding tasks without a murmur…

Could it… No, start the sentence over a different way… Isn’t it the punishment, maybe even a well-deserved punishment for falling in love with that (don’t try to recall, I haven’t broached that topic and don’t plan to revert to it) girl so senselessly. It’s lasted for too long, I should have got her out of my mind, but well, sometimes you just can’t help yourself. It’s weird given that from the beginning I knew this was not someone I would like to spend my life with, not someone with who I could build a happy marriage. Well, there are situations when people can’t resist to make a step forward, even if they fully realise they’re on the verge of a precipice.

Was it reciprocated – I’ll probably never find it out. So many times I could easily say so, but equally many times, she would be indifferent or turned me away. Her attitude to me chopped and changed, within hours, not even days. I know she can pretend very well, not a good trait for a partner, so it’s impossible to find out what she really felt.

Was it she who hurt me, or wasn’t it me who hurt her as well, maybe even more? If it was reciprocated, I should also blame myself. Under certain circumstances I had to build a smokescreen (e.g. by flirting with other women) just to nip in the bud others’ suppositions there was something between us. But could she see through the smokescreen, or did she suffocate with the smoke? And didn’t I, in the meantime, hurt someone else, didn’t I waste another chance in an unforgivably silly way?

Could there be a future for us? Without a significant reshuffle in either her or my life, in the long run, surely not. In many aspects we are similar, in many aspects we could complement each other, but at the end of the day we are worlds apart. She is full of contradictions (like every woman to some extent), surely fragile and quite sensitive. And here the red light goes on – she’s sensitive only when harm is inflicted to her. I realised it upon compiling this post. If she read it, she’d just pull a face and what actually I was getting at and why I cared about those worse-off people.

I believe like many people, she’s so afraid that somebody can hurt her that she hurts someone else? She’s built a shell surrounding her not to let other people find out what she really feels. I could have enough power and determination to break through this shell, but my hands were tied and they still are. I could only bang my head against it, but is it worth the effort?

I treat this post like a katharsis. I need to break away.

A year ago if somebody had told I would go crazy about somebody with such abandon, I would have ridiculed them, call a downright idiot and bet all my savings they were an idiot. Fortunately, such opportunity didn’t arise and at least I’m not out of money on top of that.

So it stands to reason that my recent apathy is a consequence of this senseless affection. For some time, probably since early spring, I haven’t discerned the beauty in the world, until then I could see it in simple things, such as the sunset I’d lapped up a year ago, nor in magnificent ones. Everything in the world seems to me ugly.

When staying in bed I spotted this on my friend’s (we’ve been trying to arrange a meeting for half a year and guess if we met) wall on facebook. This might suggest another explanation. In late winter, when it sank in to me the senseless affection is beyond all doubt senseless, I resolved to be stronger than ever and than everyone around. I decided not to let any emotions overcome nor overwhelm me, I decided to be the last to lay down weapons on the battlefield, to be the captain the last to escape the sinking ship. I wanted to be bullet-proof, like in the song played so frequently in the radio those days. With time I realised it might be easy to deceive other people, but hard to deceive myself. I had moments when I was near breakdown, there were days when I got in to the car after work and yelled for half a minute to disgorge the negative emotions. It’s over. I haven’t experienced depression – I still feel a lot of energy and according to on-line tests, I have no or almost no signs of it. I haven’t experienced a single panic attack, but anxiety has kept me company for months, if not years. Perhaps this is the price to pay for some choices.

From now it’ll get better. It must…

A city of contrasts

An opportunity of doing somebody a service, driving the newly built motorway, popping over to Łódź and being reimbursed costs of petrol could not be missed. Oddly enough with hindsight it turned out I was not the only one to visit Łódź yesterday – fellow blogger Michael and his son took the same journey, also by car.

I haven’t checked how long it took my to cover the distance between the suburbs of Warsaw and “eastern centre” of Łódź, nor the time needed to get there. I think it was roughly two hours each way, minority of which was spent on the new 93-kilometre long A2 motorway. Getting to the motorway from Łódź is not a nuisance, but reaching it in Warsaw is a bigger challenge. I decide to take the simplest route, namely: Puławska -> Rzymowskiego -> Marynarska / Hynka / Łopuszańska / Kleszczowa -> Chrobrego -> Dźwigowa (the infamous tunnel under the tracks after years of repair was opened on 6 June) -> Połczyńska, and from there I turned onto S8 expressway, which in Konotopa transforms into S2 expressway and then before Pruszków the road narrows from three to two lanes (fairly enough) and receives a status of a motorway. A2 between Pruszków and Stryków near Łódź will become a toll road in 2014, the toll is expected to be 0.10 PLN / kilometre, which is still a reasonable charge. Motorway operated by the Polish state will have toll caps imposed by the EU, while operators of those built under public-private partnership are given a free rein to rip the drivers off.

Getting to the motorway from the southern fringes of Warsaw will be facilitated, when S2 expressway, linking junction Konotopa west of Warsaw and ul. Puławska is completed. Judging by the photo taken today, even next year completion is not feasible. The sluggishness of both general contractors of the Southern bypass of Warsaw is mind-boggling for me. How come Gdaka (stands for National Road and Motorway Agency) has not put its foot down – construction of A2 motorway got under way a year later then works on S2 and the former is finished, while progress on the latter is more than a crying shame.

The traffic, as indicated on Michael’s photo (I haven’t taken any snaps, driving and taking photos at the same time is anything but prudent, there are plenty of shots on a relevant Skyscrapercity forum), was kind of sparse, as heavy vehicles are not allowed to take this road. Borderlines between sections are easily recognisable – the one between D and E sections can be distinguished by different colour of noise barriers, the other middle section – C and the longest and closest to Łódź – A, are marked by sights of unfinished infrastructure, speed limits and lack of the last layer of Tarmac (only section A). I didn’t drive fast (110 – 102 kmph) to keep the petrol consumption rather low (with headwinds on my way to Łódź it wasn’t low despite my efforts and due to air-con turned on), but didn’t let the car move below 100 kmph and found the speed limits unjustifiable. 100 kmph on section C is laughably low, 120 kmph would surely be more appropriate and 100 kmph instead of 70 kmph would be reasonable for section A given the quality of tarmac laid there. Driving too slow on a high-speed-motorway is dangerous as well and can distract a driver. You are more likely to cause an accident when you drive 70 kmph than if you drive 120 kmph, as the faster you drive (within reason), the more attention you have to pay to driving and with mere 70 on your speedometer, you run a risk of falling asleep behind the wheel.

In spite of being formally unfinished, the road’s beautiful, but driving it I couldn’t resist from pondering upon the misery of companies that have built it and who have paid the ultimate price for this contract. Chinese contractor has gone bankrupt and left Poland in mid-2011, lead co-contractor DSS has gone insolvent many months ago, hundreds of subcontractors have not been paid by the contractors, several have been declared tax criminals (they had issued invoices which had not been settled, but had been obliged to pay tax on their revenue) and lost all their personal assets just not to go to prisons. CEO of Strabag, contractor of section D moaned about loss incurred on the contract as a whole.

Unlike in Warsaw, the motorway doesn’t take you to the perimeters of the city. You slip off in Stryków and then head for Łódź via National road number 14. This shouldn’t take you long and soon will you be able to reach your destination. In terms of friendliness to drivers, Łódź surely beats Poznań, Wrocław and Gdańsk. Signage is well-visible and with a map on my knees (I haven’t upgraded to GPS) I could easily find where I am and where to go. Having dealt with what I’d been requested to do, I drove north towards Plac Wolności and left the car for half an hour to stroll down ul. Piotrkowska, the city’s pride and joy and pedestrian precinct.

I parked the car at the corner of ul. Pomorska and ul. Wschodnia (look at this place in Google Earth Street View) and realised why Łódź should not host football fans for Euro 2012. Not the obvious reason that the city doesn’t have a splendid stadium, not even how it looks, but who you can meet there. Just upon leaving the car I was accosted by a “car-minder”. It functions very simply – the car park is formally unpaid and not guarded, but some dirty, unemployed, often disabled people offer to take a look at your car while you’re away. I politely turned down this offer and walked away. Some ten minutes ago I recalled my father’s friend once told such person to f*ck off and when the returned, the car-minder was gone, but a dent on his brand-new Opel’s boot door was left…

I decided not to worry about my nine-year-old, not insured against theft and other damages car. A car, as any other device should serve you, not the other way round. I wandered to Plac Wolności (a blend of architectonic styles – pre-war tenements, communist-era blocks and a new building of a brokerage firm – who allowed for this?) and then south down ul. Piotrkowska, stared at mostly dilapidated buildings to come to a sad conclusion there is not much to take delight in. Façade of one tenement has been renovated, but pieces of plaster are falling off the other’s wall. Front façades are clean, but while peeking into the gates you see squalid backyards. It was Saturday, but I couldn’t spot many tourists. Most people hanging around were locals, most of who couldn’t boast about high social status, nor haven’t taken a bath and changed their clothes for at least a week.

Over the last decade the city has made a stride, but still lags behind most bigger cities in Poland. In terms of population it probably is still the second biggest one, despite rising outflow of inhabitants, mostly to Warsaw, but the quality of the population leaves a lot to be desired. I was near the centre of Łódź, quite near splendidly renovated Manufaktura shopping mall and on the high street and was confronted with dreadful poverty. As I was driving back towards road no. 14 I again glanced at ramshackle buildings and their God-forsaken dwellers and I began to ask myself whether I was the second biggest city of Poland or Romania. Bleak is the city, with huge districts of poverty from which no one will lift their residents and huge estates of panel-building blocks, some refurbished, some not, but all looking equally gloomy. The latter reminded me of Bemowo in Warsaw, I wonder why I find Bemowo so depressing, while in Ursynów, which has a quite similar architecture, I feel well…

Football championship musings

More careful readers are wondering why this post has appeared at all. I was going to be on holiday, yet for the whole fortnight preceding the outset of it, I had been struggling problems with sore throat, then I came down with laryngitis (the prescribed antibiotic did not cure me), which eventually morphed into a fully-fledged bronchitis, with typical symptoms, such as wheezing in the chest and high fever, in the eve of my departure.

So eventually, instead of setting off to get some rest and enjoy sightseeing, I ended up stranded at home and for three days even in bed. I wonder why some people call it “leisure”. You feel off-colour, dizzy, your activities are confined to reading books and newspapers or watching films. Admittedly, touching the culture is highly commendable and even recommendable if in your everyday hustle you have little time to do it, so staying in bed gives a chance to catch up. Inactivity tears me apart!

I got a sick leave, so holidays I took at work will be cancelled and I will be entitled to take days off later. As for now, I am on my way to recuperate for good and plan to set off again on Sunday. Unfortunately I will also have to return on Sunday to fulfil all my obligations at work. But I will manage to squeeze my plans into that short period anyway.

Being on a sickie also helped me avoid all tribulations triggered in Warsaw by Euro 2012. I did observe the football craze last Friday, on inauguration day. Hundreds of fans were hanging around the centre of the capital from early morning. In the afternoon the city was full of fans, dressed in white and red attires, most heading towards the National Stadium or the fan zone. Fortunately I was not attacked by anyone, as inadvertently I was wearing blue jeans trousers and a blue shirt with white stripes, so I was clad in colours very similar to the Greek flag.

The worst day during the championship in Warsaw was supposed to be Tuesday, when Russia : Poland match was played. Before the sporting events, Russians fans decided to march collectively towards the stadium. Some said this parade was held to commemorate 400th anniversary of siege of Moscow, but Russians have not screamed out any political mottos. The Group was attacked by Polish hooligans (not mistake for football fans) and eventually 184 persons, including 156 Poles, were detained. Some have already faced charges.

It was not meant to be an uneventful day, but unlike many commentators, I realise it could have been much worse. Widespread riots have not broken out, relatively few innocent people have been injured, I have not caught out any reports of shop windows or cars vandalised. Polish policing forces and true football fans have risen to the occasion. Both Polish and Russian fans merrily celebrated the 1:1 draw until late night – this is how the football fiesta should look.

Nevertheless, I am still appalled by the atmosphere that surrounded the game. Many Poles’ attitude towards the event was that it was a matter of honour to beat Russians, our ever-lasting enemy and tormentor. The key goal was to wpierdolić ruskim (literally and to put it mildly, ‘to beat up Russians’), both on the football stadium in the match, as well as to show the Russian football fans they have not come to a friendly country. Some hools did manage to demonstrate their hostility towards Russian football fans, but generally relationships between the two nations have not been shuttered in the wake of reprehensible incidents.

The political backlash has also made my hackles rise. Generally the match had a political and historical setting and given the rancour between the two countries, this was hard to avoid. But reactions seem inappropriate to me.

Deputy Mariusz Błaszczak from PiS pointed out that rowdy Russians have provoked a scuffle. OK, taking into the stadium a huge “THIS IS RUSSIA” transparent was out of place, but the very march had no political purport. If there was a sporting event in Russia on 15 August, Poles should also be granted a right to stage a march. Even if Russians were to demonstrate their superiority over Poles, the best way to cope with such acts is to let them pass unnoticed. Do not respond, if the have a peaceful character!

Major of Warsaw apologised to all football fans for misdeeds of Polish hooligans. Agreeably, a proper official gesture following the street battles. But why the hells has prime minister Tusk apologised to president of Russia for the hapless goings-on? Such acts of violence do accompany football matches, so why hell should this become a topic of official talks between the statesmen? Is the foreign policy towards Russia indeed run on knees?

In ancient times wars and conflicts were suspended during Olympic games. Now animosities are unlikely to be shelved. Instead the atmosphere of impending clash is being heated up by sensation-chasing media and politicians who never miss the opportunity to play on voters’ emotions… This will take generations to change.

For an optimistic ending, Poland still stands a chance to stay in the championship, if our team wins with Czech Republic on Saturday. This is conceivable, and if it happens, despite my lack of faith in the Polish team, I will be immensely proud of them.

Time to take back the prophecy of doom

OK, Poland has not made such significant stride in infrastructure development, as Mr Tusk had promised in his inaugural speech in November 2007, but the progress is visible. Almost all roads, planned to be finished before the football championship, are still under construction, some long behind schedule, but road-builders have pulled up their sleeves and prepared a huge surprise for motorists.

A lot is being built in Poland, but every observer’s eyes have been focused on the 91-kilometre long section of A2 motorway linking Warsaw to Łódź and then with the European network of motorways. At the beginning of April, in my road construction programme summary I wrote:

A2 motorway – great to have a toll road (with some short free of charge sections) all the way from the German border east to Stryków, where on a big junction A1 and A2 one day will meet. But then in Stryków masses of football fans travelling from the western Europe will end their journey via up-to-the standard roads and will continue the drive to Warsaw through old, congested National Road 2. There’s no chance that two out of five sections of A2 between Łódź and Warsaw forsaken in June 2011 by bankrupt Chinese companies will be finished, or at least passable. Funnily enough, two sections near Warsaw are almost finished, so there’s a contingency plan that they are opened, as scheduled (the one closest to Warsaw even one month before deadline), but does it make any practicable solution. The motorway would end in the middle of nowhere somewhere near Grodzisk Mazowiecki. For the locals – a great link to the capital, for transit traffic – a useless facility..

Given the progress of works at that time, I could not believe this road would be opened just before Euro 2012. I am not ashamed of my lack of faith in road-builders. I dare to claim my pessimism was fully justified. Only as time went by, it faded and gave way to glimmers of hope in completion before the sports event. A2, being one of very few roads planned to be opened before Euro 2012, was divided into five sections, marked with letters from A to E (A – closest to Łódź, E – closest to Warsaw), each built by a different lead contractor and set of subcontractors. Works kicked off late – in autumn 2010. This delay in putting together all the necessary documentation and obtaining all official permits meant deadline for completion was very tight. Tenders for two sections were won by a Chinese consortium COVEC. The Asian company bid to build a motorway at dumping price and hence beat all competitors. The contract in Poland, deliberately quoted much below real costs, was, in COVEC’s plans, a way to get foothold on the European market. Unfortunately, COVEC’s financial planners have overestimated financial strength of their company and in mid-2011 the bankrupt Chinese contractors left the unfinished road, unpaid subcontractors and guarantees issued by Chinese banks with which the Polish government still hassles. Construction works have been halted for two months, before resumption in late July 2011. Section A was taken over by Eurovia-led consortium, while building of section C, with the biggest delay, was conducted since then by Dolnośląskie Surowce Skalne. The latter firm has also overreached itself. It caught up with many works, but due to liquidity problems filed for insolvency in March 2012. Its bankruptcy was formally declared in April. From March the hapless section has been under administration of Boegl a Krysl (Czech-German enterprise). Guys worked night and day, weather permitting, to make the road passable in early June. Almost nobody believed in success; many pointed at potentially poor quality of hastily done works (time will prove these concerns right or wrong), others yelled the road would be only “passable”, not completed and hence dangerous for users.

According to official declarations, the motorway would not be opened before Euro 2012 and in mid-May the transport ministry presented official detour guidelines, showing how to pass by the unfinished section C. These were contingency plans…

Opening festival began in the third decade of May. Section E to Pruszków was opened on 23 May, its extension, section D to Grodzisk was opened on 29 May, section A and short part of section B (only the latter has been completed, most of section A lack the last layer of stone mastic asphalt) was opened on 3 June and 6 June went down in history as the day when the whole motorway passable. Laying the last layer of tarmac was finished on 5 June, then construction crews assembled signage, crash barriers and painted lane-dividing lines. So drivers can enjoy a problem-free, hour-long journey from Warsaw to Stryków near Łódź, but sections A and C will have to be finished after the football championship (which does not mean any closures).

Despite everything, against all odds, football fans travelling to the capital of Poland from western Europe by car will get to Warsaw in a civilised way. They will surely end up in a traffic hell in Warsaw, but who cares?

Last days also saw the completion of part of S8 expressway in northern Warsaw and opening of two S5 and S11 sections near Poznań. Yesterday southern bypass of Gdańsk was thrown open, making a great alternative to ever-congested notorious ul. Kartuzka. Next openings are scheduled for July and then by the end of 2012 Poland is going to have a much broader network of expressways and motorways. Unfortunately this year there is no chance that part of Warsaw’s southern bypass is finished. Construction of this short expressway got under way a few months before works on A2 started. A2 is now at use, while S2 and S79 have one-year delay and its contractors are still taking their time.

It has to be noted the government-funded infrastructure development programme has brought the construction industry to its knees. The best example of this collapse are bankrupt DSS (general contractor of A2 section C) and PBG (general contractor of the National Stadium in Warsaw) and its two subsidiaries that filed to bankruptcy this week. All companies profit and loss accounts would show they are profitable (albeit with significant margin squeezes), but further analysis of their financial statements draws to a conclusion liquidity squeeze (late payments from Road Construction & Administration Authority / over-competitive prices) killed them and their subcontractors, who have fallen victims of co-operation with reputable industry players.

Corporate bonds issued by these companies hit valuation of many “safe” investment funds, write-downs on loans granted to them are hitting many banks, for many meaning nine-digit losses and being a substantial drag on profitability. The bank I work at is quite conservatively run and it least is not considerably exposed to the ailing sector, so at least it spares my colleagues and me troubles.

I must say the football championship does not rub off on me. I do not root for the Polish football team (although as a Pole I wish them well), I have not bought any Euro 2012 gadgets, I generally find the whole event a nuisance rather than a reason to be excited…

I’m off for holidays for two weeks. The computer stays at home, so expect the next posting with holidays coverage (or something else, provided a noteworthy event occurs) around 24 June

How it feels to be made redundant

As they were taking you on, good times were rolling. Returns were high, risks were underestimated, salaries and bonuses were enviable. Then the housing bubble in the United States burst and fallouts flied even to Poland. The industry faced a slowdown and felt the pressure to economise. To make things worse, just before the outbreak of the crisis your company was about to fully merge with another one. Unfortunately, due to Competition watchdog’s objection, the takeover was only partly brought off, the buyer picked the best divisions and rest was put up for sale. It soon found a new owner; the sucker was ready to pay over the odds for the piece of shit which used to be one of the leading and most reputable players on the market.

The new owner introduced its principles and began to turn the business around, despite really adverse market conditions. Faced with the choice either to shape up and keep your mouth shut, or to ship out and begin to look for a new job, on the market flooded with supply of similarly profiled professionals. You soldiered on and they appreciated your effort. Soon you got promoted and received a pay rise, while over 10% of the staff were laid off during the first wave of employment restructuring. Then ensued the second wave of lay-offs. Several people around were fired, but this was not your problem. You held down the job and performed well, so you did not need to be afraid.

As the economic recovery begin to fade and sovereign crisis in Europe loomed more perilous, your company, despite everything, announced expansion plans. The whole market learnt who was going to be the growth leader, competitors looked with some disdain on your company and slowly began to downsize to retain profitability during economic slowdown.

Reality check came a few months later. There have been some mistakes regarding the strategy made, but executives found the scapegoats in those who had been fired some time earlier. Review of recent performance figures proved the growth strategy fizzled out (unless you define growth as shrinking). Time to bite the bullet has come…

Hearsay over the third wave of cutbacks had been heard long before, but the press release saying this would happen and unveiling details of the plan was issued during the trading session. Shares of you company soared at the news of cost-cutting plan, but retreated to pre-news level by the end of the day. After all investors and speculators know this boat is bound to sink.

Following the lay-off announcement and recent 10 PLN pay rises, motivation among the staff fell dramatically. Nobody felt what they were doing was making sense, the company was going nowhere. Instead, everyone began to fret over the imminent job loss and make fun of the under-performing business.

In a message to employees the executives promised people will be notified in advance of their redundancy, treated with dignity and will receive the proper support and a generous severance package.

As time went by, only the very last promise has not been gone back on. How your fateful day looked depended on your position.

If you were a rank and file, head of your department took you to a room where you also met your HR manager. They told to sit back and handed you an envelope containing all documents linked to job contract termination. They informed they were too many of you in the team and you were selected to continue your career outside this organisation. You could either agree on a conditions proposed by the company or leave with no severance package. So you agreed obediently and got informed by when you can still work and hand your duties over to another employee and sign up for a course “how to write a CV successfully” (you had not been on the market for over 10 years so you did not know or have forgotten how to do it).

If you were a manager, you the invitation for a meeting when they were giving you notice looked similar. Severance package also did, but managers were given a very short deadline by which they had to pack their stuff and go away. Usually it takes two days to close their duties and say goodbye to your colleagues, then you can take your due days off and are requested not to come to work at all. You are still paid and are not allowed to take up a new job with a competitor, but your employer clearly tells you they do not want to see your face any longer. Slap on the face slightly worse than 10 PLN pay rise.

You colleagues seem to sympathise with you, but deep down they are happy it is you, not them. After all they are no irreplaceable people, those who stay on will have it much worse since now. The company has to grow anyway, only labour force harnessed to propel the growth will be less numerous. This is not the tragedy, they will have to work even longer and harder, in other words, more efficiently. Touch luck…

While you are gone you realise you are out on the limb – nobody needs you, market is full of professionals like you, fired by other companies in the industry. Your severance package will help you scrape along and keep paying off your mortgage for a few months or even a year, if you decrease your standard of living. What then – who cares… Maybe on the occasion of the next wave of lay-offs, set to come next year, somebody will mention you and wonder how you are doing.

To make it clear, I have not been fired and I have been told I will not lose the job under restructuring programme this year. But next year opportunities may unfold, with a more generous severance package…

Any similarities between real companies and event are totally accidental. The story is an absolutely fictitious figment of my imagination…

The rear view mirror

Some nasty men claim women use it to tweak with their make-up and apart from this the mirror attached to the windscreen is of no use for them. In fact drivers who do not use all three mirrors to control situation on the road almost constantly are more likely to cause an accident than those who use it as prescribed. Apart from keeping track of traffic when the car is in motion, it is worthwhile to look in the mirror inside the vehicle to look at other car users while, for example, waiting for the traffic light to turn green.

Until some time ago, I could enjoy typical sights – women enhancing their make-up, men shaving their facial hair, humans of both sexes talking on their mobile phones, smoking or having their fingers exploring the contents of their noses. The times of ordinary views in the mirror are gone. It’s getting worse…

I can distinguish two types of drivers: most travel on their own, minority take passengers. The former appear either impatient or jaded. Those for who every second is precious would be the happiest if they could push other vehicles away, faces of the more bored drivers show less and less interest in what is going on around – they drive because they have to, it can be judged by their faces they do a routine activity. I usually commute on my own and usually lean towards the “jaded” type… Aggression behind the wheel is not a good advisor…

More interesting are interactions between people travelling in the same vehicle, and here my observations are more disturbing. The first instance is no communication at all – a car is moving behind me for a longer period of time and its passengers show no sign of conversation. I assume they are not strangers for each other / one another, so I suppose it would be natural to talk. It does not happen. I also quite often notice whole families (parents and children) occupying one car and each member of family is doing something else – a driver focuses on traffic, one of the passengers looks outside a window, another reads a book or fiddles with a mobile phone. In times when people spend most of the time outside home, commuting together seems a good opportunity to talk, but for many silence seems to be a preferable option. Or am I the only one to find this strange?

The second instance are arguing people – more and more often I can see in my rear view mirror couples falling out – yelling, waving their hands, their faces getting red. The same applies to parents driving their children to school. For smaller children the case is usually that the unruly offspring wind up their parents. Teenagers in turn behave seemingly properly but fall out over more serious issues. Shouts and gesticulation also in abundance.

Even leaving out the fact quarrelling distracts drivers and may contribute to dangerous situations on the road, my conclusions are unsettling – a malaise overwhelms the society…

I used to commute by public transport only, I still cover more kilometres in public service vehicles than by car each working day and I find populations of car commuters and public transport users entirely different. Generally speaking, those who get around by car are wealthier than those using the public transport. It does not apply to people who live in areas with excellent transport links into centre of Warsaw who use underground as a faster and more convenient for getting into town, but the regularity remains. Judging by what faces of people sitting in other cars and faces of fellow bus / tram / underground passengers express, I infer those who take the public transport are happier than car users.

Some explanations could be found right away – if you travel in a public space with your family, you are generally less eager to wash your dirty linen than in the private space of your depreciating tin. Going further, money does not have to bring happiness; in many cases wealth, if not accompanied by what really matters in life (bonds with family and friends, self-fulfilment, etc.) can bring discontent. The more you have, the more you want to have and the less you are satisfied with what you have achieved, the less you appreciate what you possess, while you should.

For an upbeat ending – I do not consider what I spot among fellow road users significantly upsetting. The sample I observe is not representative for the whole Polish society, although indeed people’s moods have seen better days. It seems the second wave of financial distress (debt crisis in the euro zone) will hit Poland more severely than the aftermaths of banking crisis in 2008. Poland’s GDP is not going to shrink, again, unemployment is unlikely to soar, but is poised to go up, but consumer confidence that kept the Polish economy afloat in early 2009 gives signs of dwindling. More people are afraid of losing their jobs, households are less eager to finance their consumption with debts, purchasing power is on decline due to cost-push inflation (higher prices of food, utilities and fuel, partly owing to excessive volume of speculation on commodity markets and “thanks” to weak PLN, which now, when corporate sector is not throttled by over-hedging, boosts our competitiveness), as growth of salaries has ceased to catch up with the pace in which prices of basic goods mount. Insecurity can be felt in the air (brutal lay-offs are under way in my company), so gloom is likely to prevail and because in economics agents’ actions bring forth a mechanism of self-fulfilling prophecy, I expect harder times than in 2008-2009, not in figures issued by the Stats office, but among ordinary people.

Next week – a short guide to being fired in a corporation – onlooker’s impressions.

In two weeks – road construction programme review at the onset of football championship – will Warsaw be linked to European network of motorways by then?