REFORM : Poles Want Property Back : Warsaw struggles to find ways to compensate its citizens for holdings seized by Communist government.

The Polish government has begun what promises to be a long struggle to find a fair, affordable means of compensating private owners for property confiscated or nationalized by the Communists.

At issue are thousands of properties with a total value estimated as high as $20 billion. They were once in private hands but were taken over by the state beginning in 1946.

The post-Communist government has established a new ministry to oversee the “reprivatization” process. Its problems could turn out to be nightmarish in their legal, social and financial complexity.

Under the proposed plan, the government would not, in most cases, return nationalized property but would issue its former owners coupons that could be used as share-vouchers in state-owned companies.

The plan’s designers, working under a concept designed by Finance Minister Leszek Balcerowicz, see the program as helping to accelerate the process of privatizing state industry. Coupon holders, the government plan says, would be able to sell them on the Polish stock market or to buy mutual fund shares in privatized state companies.

Critics, who include perhaps as many as several thousand potential coupon recipients, argue that the plan is unfair and works to perpetuate the management structure of Polish industry, which has already proven itself incompetent. “We have to start from the fact that the Communists did everything in a very crude way,” said Wojciech Goralczyk, chief of the government’s interministerial committee on reprivatization.

In the years after World War II, he noted, there were more than 70 separate pieces of legislation dealing with nationalizations. Although the legislation often set out terms for compensation, thousands of property owners had their holdings confiscated. In some cases, records of the confiscations went to the Ministry of the Interior--the police apparatus--where they vanished.

“It is also difficult,” Goralczyk said, “to translate the value into today’s currency. The Polish currency changed entirely in the 1950s and then, of course, there was the accelerated rate of inflation in the 1980s.”

Then, too, there are other problems assessing property seized 40 to 45 years ago. In some cases, seized buildings no longer exist, land that was seized has been developed, seized factories and businesses have been expanded or modernized or simply have disappeared.

The government hopes to deal with cases administratively and avoid endless court tangles. “We want to get this done as quickly as possible,” Goralczyk said.

If the Polish system works, it could turn out to be a model for other Eastern European countries wrestling with the same issue.

A full count of claims in Poland has not yet been made. But early indications are that more than 50,000 petitions have been filed in regional offices around the country. Experts say these claims only scratch the surface, predicting that between 200,000 and 300,000 claims will be filed in the coming months.

Most simply want their property back. In some cases, where the land has been occupied by buildings, they want to be paid for the land at current prices. As for businesses, most want the businesses back, they say.

The government has delayed dealing with the return of thousands of Warsaw houses, arguing that the problem of finding alternative housing must be solved first.