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  • Mateusz Medyński

Government to combat payment delays

Payment delays are a constant nuisance in Polish economy. In many cases they have lead to companies becoming insolvent and the so called "commercial credit" (in Poland usually spread to 90 days payment delay) is a heavy burden on the entire SME sector. The problem therefore is real and valid.

The Polish government decided to combat this problem by expanding the Office of Competition and Consumer Protection, hiring at least 26 new specialists and increasing the penalties (no top limit of fines is currently planned) on those debtors, who do not pay on time.

For more please find an article in Puls Biznesu.

Mateusz Medyński comment:

It is true that payment delays have always plagued the Polish economy (which economy wasn't afflicted?).

However in many branches of the industry, payment delays start with the investors refusing payment. For instance in road construction GDDKiA (a government agency) has made it a hallmark of refusing due payment and dragging negotiations and handovers for ever. In the meantime, the general contractor (who has not yet been paid) is already in heavy delay with payments to his subcontractors. This means that such general contractor will be additionally penalised for not having enough money to pay all his subcontractors on time, regardless of the reason for such inability.

A similar situation exists in the self-government and government construction sector. Once the project is completed, the final handover and payment drag on forever, and everybody (general contactors and his subcontractors) waits for payment. I did not see any proposed penalty clauses for governmental or self-government entities if they delay in payment, only those imposed on general contractors and private entrepreneurs.

How much longer is the private sector going to be blamed for every evil in the world and penalised accordingly? I understand that non-payment on time is a grave injustice and many smaller companies suffer, but the big companies suffer as well. The idea to fight payment delays is a good one, but the execution leaves a lot to be desired. Flogging a dead horse is rarely a productive endeavour.

Finally, who is going to be silly enough to compete in Polish infrastructure projects if only the private sector takes the blame for everything. It's transparency that we need, coupled with responsible tender prices and full accountability of all parties, not more penalties. Is the government going to fix the general state of the economy by hitting the private sector with more administrative fines, rather than enact a thoroughly prepared and well thought through laws? Communism once had the same idea, look where it got them...

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