Defense Minister Bogdan Klich last week had to explain cash-flow problems in his ministry Courtesy of KPRM

A number of ministries and public institutions are facing a serious cash-flow problem this year, due to a shortfall in the 2008 budget and the fact that the 2009 budget has not yet been adopted. Poland’s Defense Ministry, for example, posted a zł.1.8 billion deficit in paying for military equipment in 2008.

Dziennik reported last week that the ministry’s total debt could amount to zł.3 billion. The daily based its calculations on the amount of money the Finance Ministry failed to transfer to its defense counterpart last year, but only the first number has been confirmed by Defense Ministry officials.

Defense giant Bumar is one of several companies awaiting payment for equipment supplied to the army. RMF FM radio reported the figure to be around zł.500 million, while Rzeczpospolita reported it as zł.600 million. Kamilla Walczak, spokesperson for Bumar, declined to comment on these figures, but told WBJ that some of the money owed was paid two weeks ago.

President Lech Kaczyński asked Defense Minister Bogdan Klich for an explanation. According to the minister, debts will be paid to creditors by February 10. On Thursday, the Ministry of Finance announced it had transferred zł.1.5 billion to the Defense Ministry for the purpose of covering its commitments.