Statement by PGP SA
28 October 2015
It should be emphasised that the Employer's budget in this tender was as much as PLN 1.1 billion. We also note that in PGP's bid, 85% of the employees would be employed under an employment contract.
The price proposed by Poczta Polska arouses our astonishment and is much below the prices offered by it on the retail market, as well as on the public procurement market. The scope and high requirements set by the Ordering Party in the tender, which are unprecedented in any other contract, in no way justify such a low price with such high management costs in Poczta Polska Group (reaching PLN 570 million per year) as well as other costs incurred by PP. The revenues from the court contract will in no way cover operating costs and the corresponding fixed costs - which may be an important factor in the financial analysis of investors during the announced IPO or issuance of bonds of Poczta Polska.
What's more - Poczta Polska offered to handle PLN 580 million worth of correspondence to the courts without VAT for two years (in 2013), and has now offered to handle it for three years for about PLN 240 million without VAT. This is all the more strange because in the Sejm Committee in 2014, the Post Office explained extensively that it could not offer lower prices for handling the Ministry of Justice's correspondence due to regulatory as well as cost requirements.
The offer of Poczta Polska means that annual revenues from the contract for court services will amount to about PLN 80 million. This revenue will be about 60 per cent lower than the revenue currently generated by PGP from the current contract (about PLN 200 million per year).
A similar situation occurred in a recent tender for the handling of tax administration correspondence - where Poczta Polska offered a net price of PLN 83.3 million - while it has so far provided the same service for around PLN 267 million - three times more expensive.
This gives very serious arguments to suspect that Poczta Polska is providing services in the commercial market below costs in order to eliminate competition, which is against Polish and EU law. All the above indicates that we may be dealing with a prohibited activity. InPost and PGP operate according to the rules of commercial trade - we cannot offer lower prices as this is to the detriment of the company. We are therefore considering taking action to eliminate such prohibited behaviour.
