OREANDA-NEWS. The Polish government will halt consolidation of the country's state-run utilities, at least until parliamentary elections planned for October.

New treasury minister Andrzej Czerwinski, who took his position yesterday, will prioritise strengthening consumer protection and market competitiveness before moving ahead with the mergers, he said.

"[Utilities consolidation] is too serious an issue to implement now [before October's elections]," Czerwinski said today. The treasury oversees state-run companies.

The ministry had been working on a plan to consolidate four state-controlled utilities into two companies — Poland's largest electricity producer PGE would merge with smaller utility Energa, while the second-largest generator Tauron would join forces with Enea.

Through the consolidation, the government aims to strengthen utilities the financially, enabling investment in infrastructure modernisation.

But Czerwinski's priorities are the turnaround of the struggling coal mining sector, and implementation of laws that would enhance electricity market competition and protect consumers. "There is much be done in the area of competition in the electricity market," Czerwinski said.

Analysis of utilities consolidation will continue and the plan may be implemented in the future, he said.

PGE, Tauron, Enea and Energa hold a around a combined 65pc share of Polish electricity production, 91pc of sales to consumers and 95pc of distribution. The vertically integrated utilities were established in 2006-07 through mergers of more fragmented power generators with distribution companies.

Former treasury minister Wlodzimierz Karpinski supported the merger plan, but resigned last week following a government reshuffle. Opinion polls suggest that the ruling Civic Platform party will lose its parliamentary majority in the October election.