Ex-boss of Poland's PGE saw power plant as still not viable -sources
* After initial doubts, PGE committed to Opole power project
* But sources said CEO was still trying to block Opole
* They say he wasn't persuaded by government assurances
* CEO quit, firm says working on making plant viable
By Agnieszka Barteczko
WARSAW, Dec 10 (Reuters) - The former head of Poland's biggest power producer PGE did not believe a planned power plant project was commercially viable, even after the company said government assurances meant it could go ahead, two sources close to the company said.
Krzysztof Kilian, who resigned as chief executive last month, had opposed a plan, supported by Prime Minister Donald Tusk, for PGE to build the 11.6 billion zloty ($3.6 billion) extension to a coal-fired plant near the southern city of Opole.
His opposition highlights how the state-controlled firm could still struggle make the investment profitable even though the government assumed the chief executive's departure would be enough to make the deal go through smoothly.
It has also opened a debate on a broader issue for investors in Poland - the tension between what the state wants from firms which controls, and what is good for private shareholders.
After an intervention by Tusk in June, PGE dropped its public opposition to the project and said it would proceed. It later explained this, saying it was in talks with the government on ways to make Opole profitable.
The two sources say Kilian's view contradicted the company's public stance - he was not satisfied the project could be profitable because of low energy prices, and sought to block it.
Both sources said this remained Kilian's position even after PGE, in which the state has a majority stake, made its public U-turn and was committed to going ahead.
"Kilian was all against it. Now, after his resignation, the management board is in favour of the plan and it seems that nothing will stop the project now," one of the sources said.
Kilian, a long-time friend of Tusk, declined to comment when called by Reuters.
When he resigned last month, PGE said it was because two of his boardroom allies had left the company.
Asked about Kilian's stance on Opole, PGE said it has been working for months on ways to reduce the risk of the investment, which it said would be based on solutions implemented in other European countries, such as Britain and Spain.
Earlier this year PGE and other Polish power companies urged the government to adopt a system to subsidise producers to keep power plants operating when prices are low.
Construction work on the new power plant is scheduled to start in February next year.
PGE's supervisory board announced in November an open competition for the company's new CEO and management board members. In the meantime deputy head Piotr Szymanek has been appointed acting chief executive.
Kilian is looking for future job opportunities outside Poland, a source familiar with PGE said. (Additional reporting by Pawel Bernat; Editing by Christian Lowe and David Evans)
- Search planes find no sign of missing airliner at spot located by China |
- Missing jet may have strayed to west, Malaysia military says |
- Malaysia failing credibility test as flight confusion deepens
- White House tried to mediate dispute between Senate, CIA panel: source
- Vietnam search fruitless at site where China satellite detected suspected plane debris - witness