Hungarians receive another bad news. The public transport in Budapest, Hungary’s capital, is on the brink of bankruptcy! Istvan Tarlos, the mayor of Budapest, is making huge efforts to keep the situation under control. BKV’s (Budapest Zrt Közlekedési) bankruptcy would cost Hungary 14 billion forints a day!
BKV Zrt, the company that has control over the public transport in Budapest, is indebted way over the head and has a debt of 65 billion forints, needed to be payed immediately. Government led by Viktor Orban has allocated only 32 billion forints, given that, in order to function normally, the company needs 150 billion forints, about 480 million euros. The cost of the public transoport tickets means 50% of the company’s operating costs. BKV has survived so far by selling old garages and a number of repair bases, where, in their place, there had been built a mall and apartment buildings.
Tarlos announced that he sent to Viktor Orban a package of measures to save the bankrupt company BKV. Measures are extremely tough and unpopular, such as:
- Changing regulations for district councils to co-finance the city’s public transport
- Introducing a public transport charge
- Creating an infrastructure necessary to introduce a so-called congestion fee
- New car parks and building new garages for cars
- Eliminating inefficient activities
- Outsourcing of bus transport
If Orban-led government will not take a decision quickly, the company that controls the public transport in Budapest could go bankrupt within one month. The fastest action would mean giving up the night transport, reducing the number of daily buses, which would lead to staff redundancies.
BKV has been established since 1968 and operates 3 underground lines, 32 tram lines, 15 trolley bus lines and 235 bus lines, of which 28 are at night.
Fleet of BKV is also obsolete. In the last five years were only 150 new buses bought, Volvo ones. The oldest bus of BKV is 24 years old (3.5 million kilometers on board) and the average age is 16.5 years for the diesel buses.
The company was involved in a huge corruption scandal. During 2009 – 2010 it was made an investigation for all the contracts concluded in the last 20 years and many employees – and key executives were being sentenced to prison.
Budapest has 1.7 million inhabitants and 54% of the population uses public transport, the rest being provided by private companies.
You can subscribe by e-mail to receive news updates and breaking stories.
[...] Besides the problems that Hungarians have with public transport in Budapest, the Hungarian government must solve the problem of airline-state Malev. The company was privatized in February 2007 but was nationalized in 2010, the Hungarian state holding 95% of shares. One solution, of course, is the state to pull back on sale the majority stake and find an investor to take over the company. It should support the company’s losses and to return the money owed by the company as a result of the sanctions dictated by the European Commission. [...]