Bubi pedaling into the home straight


At the end of the summer, the Budapest Center for Public Transportation (BKK) signed a contract with T-Systems Hungary to install and operating a public bike sharing system in Budapest, which is due to start in April 2014. Establishment of the system has cost HUF 900 million, of which the European Union has provided 85%, with the remaining 15% paid by the city of Budapest.

The public tender was announced in February 2013, although almost all the background material necessary for the project – namely the feasibility study, the estimation of costs for the technical equipment and logistics software – was ready in 2010.

“The reason for the tender’s present announcement is that the current seven-year budgetary term of the EU is drawing to a close, so the sums of EU funding have to be drawn soon,” an official familiar with the tender, but who wished to remain anonymous, told the Budapest Business Journal.

Rumors suggest, however, that there have been constant negotiations in the past three years between Budapest City Hall and district-level municipal politicians, as well as national transportation authorities, raising support for the Bubi bike-sharing project. “It is not true that the plan was only waiting for someone to press ‘the green button’,” Dávid Vitézy, the head of BKK insisted.

“Until 2012, the approval of the individual districts had largely not been obtained, and their approval was indispensable for us to let the spaces designated as bicycle stations,” he explained.

Budapest Deputy Mayor István György, in his capacity as a member of parliament, proposed an amendment to the Public Transportation Act last year, according to which public bikes would also be regarded as a means of public locomotion. Experts interviewed by the BBJ unanimously explained this modification as an attempt by the capital city government to channel funds from the national budget into the operation of the municipal bike rental system.

“The bitter struggle BKK has been fighting for national funding has so far been largely in vain, and the present effort to win central funding for the Budapest bike rental service is likely to fail as well,” an expert remarked to the BBJ, implying that the source of financing remains unclear in the text of the bill, not to mention the fact that the national government is simply unwilling to finance the Budapest mass transportation system. In fact, in Parliament, the planned bike rental system provoked the toughest criticism from the extreme right: “It is highly questionable whether it is worth starting up a system in which the installation costs of each bike will amount to HUF 2 million,” said György Szilágyi, a Jobbik backbencher. 

A bike, anyone?
According to the announcement of the tender, Bubi is required to make it possible for its users to have access to and operate the bikes without external help, and users should be able to park the bikes at whichever station they wish. There must be at least 75 parking stations, the locations of which BKK has already designated. The 15 square kilometer territory covered by the rental service includes Margaret Island, the entire quay of the Danube on the Buda side including the Déli Railway Station, and the Central Business District all the way down to Keleti Railway Station. The bike stations must be established 300 to 500 meters from each other.

In the first stage, more than 1,000 bicycles should be put into operation. Their wheels must all be puncture-proof, the bikes must have closed brake systems, and the lights must be able to stay switched on even when the cyclist does not use the pedals. Finally, all bikes should be equipped with anti-theft devices.  

According to a preliminary feasibility study, the first 30 minutes of bike rental would be free, but then the fee would rise sharply. A one-year bike pass, the issuing of which would be tied to previous registration, would cost HUF 5,000, while for one-time rental, one would have to deposit HUF 30,000. At this point, the infrastructure necessary for mobile phone payment as well as payment with credit and debit cards has yet to be installed.

Devil in the details
Some 15 companies bought the tender brochure this spring, but only four made bids. Of those, only two met the evaluation requirements: one came from a consortium led by Eurobus-Invest, the other from a consortium led by T-Systems Hungary. The tender was won by T-Systems with a HUF 900 mln bid. Next Bike GmbH, a member of the consortium, will deliver the logistics software supporting the T-Systems scheme.

Next Bike will not, however, participate in operating the rental bike system after 2014; T-Systems and Csepel Bike Manufacturing Co., another member of the consortium, will perform this task jointly until 2019 for HUF 240 million per year.

The Eurobus-led group made a HUF 940 million bid for the creation of the system, with a HUF 340 million per year charge for operation. Projected over five years, this adds up to a HUF 500 million difference, which makes BKK’s final choice of T-Systems quite understandable.

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