Year 2008 is already behind us. Mister Chairman what was the year like for the Southern Poland Power Company?

We can say that the year was a difficult but also a good one. It was characteristic due to the fact that we are still realizing a very substantial investment, namely, the construction of the new power block in Lagisza. It requires enormous financial outlays and in the present situation it is a hard task. The positive fact is that the erection is continued according to the schedule as far as tangible aspect is concerned. We concluded the first stage i.e. scavenging of the boiler pressure part. Another very crucial moment not only for the Southern Poland Power Company but also for almost entire Polish power industry was the day of 1^st April when long-term contracts ceased to be in force. From that moment the whole energy generated in the company has been sold on the free market.

It has tuned out that we are competitive on this market…

I do not deny it yet this law cut significant resources we need for the necessary investments. Nonetheless, without long-term contract we are doing quite well. The passing year was better compared to 2007 in yet one more aspect. All year we experienced social peace. Slowly we kept reconstructing what we had lost – coming back to normal relationships. As far as production is concerned we do not have splendid results but we do have a full realization of certain elements of our future. In the passing year – what should be especially emphasized – there were made decisions concerning the commencement of further investments in the company.

Do you have in mind The Heat and Power Plant 1 in Bielsko-Biala?

Not only. I do think of the decisions concerning the erection of new power blocks in Jaworzno III and Blachownia Power Plants. The investment preparation process can be regarded as commenced.

We will all remember 2008 mainly because of the Climate Package and the problems it causes in case of Polish power industry.

Our engineering and technical staff actively participated in the widespread discussion concerning the CO₂ emission reduction, clean coal technologies – i.e. all that concerns environment protection and all that is of utmost importance in the European Union. Managing Director Kazimierz Szynol as well as Director Janusz Tchorz are actively taking part in European structures. Our employees participate in actions at various levels which aim at preparing our company and the entire country power industry to function in completely different conditions which are created by the existence of the Climate Package. The Southern Poland Power Company plays the leading role here just like in case of many other situations.

We are summing up different aspects of the Company operations here. What does the ownership policy look like nowadays?

There are still attempts made to set functioning rules for the Southern Poland Power Company within the new ownership structure – Tauron holding. I do hope that this very structure will turn out much helpful in solving many future problems and we will be its very strong link.

Talking about the ownership issues – lately there have been talks that Tauron will not enter the stock exchange. Instead it will have a strategic industry investor. Plainly speaking, it will become propriety of one of the world’s power industry corporations. It is not the best of news for us all, is it?

I am very cautious as far as such media spread information is concerned. I would like to recall the Southern Poland Power Company privatization in 2001-2002. On the ownership’s side, the concepts kept changing constantly. Firstly, there were talks about the strategic investor, than about the stock exchange path. Today, we have become a part of a big power industry group. I have always favored privatization via stock exchange and I do not deny it. Currently, the world’s economic situation is changing and today I would be extremely careful thinking how the Tauron privatization path should look like. With the financial markets being so unstable, I would not make any decisions concerning privatization of any sort. Nonetheless, the company should be prepared for the privatization and the path does not make any difference in this case. I deeply believe that the Treasury has not made any final decision concerning our privatization yet.

Mister Chairman, what can we expect in the forthcoming year?

The future is rather mysterious right now, as it is as late as 10^th of December and there are still talks underway on the subject of the electrical energy and coal prices. Both matters have got an enormous influence on our company operations. Despite the fact that both processes are basis of our functioning I am convinced that we will not stop the commenced investment processes mentioned earlier. Next year we would also like to take decisions concerning the functioning and operation of particular units. Today we have knowledge about at least ten-year long future of Jaworzno III Power Plant, Heat and Power Plant Katowice and Laziska Power Plant. In order to take detailed decisions about other plants we need a different kind of knowledge. On 10th of December we do not know the CO₂ emission limits, we do not know how the energy trade will look like. Yet the Southern Poland Power Company is a kind of company that will operate without major disturbances despite the changing circumstances. Nevertheless, to make long-term decisions we need the knowledge which is not at our hands yet. The Southern Poland Power Company is part of the Tauron Group what gives us higher sense of safety and enhances the opportunities. The staff has secure places of work and in my feeling a suitable remuneration. But the engineering, technical and managerial staff is facing a constant struggle for higher effectiveness next year, for continuation of the commenced and planned investments.

Reportedly, as of 1^st January the employees of the Southern Poland Power Company will get a pay rise.

Yes – the Government has already set up the salary increase index at the level of 8 percent. We are starting negotiations with the trade union organizations. The details of the remuneration correction in force in 2009 should be known once the talks have been completed. I hope they will not last long as to make the pay rises come into force as soon as possible.

Andrzej Cygielski