Expanding Logistics Infrastructure Still Key to Growth
When I first arrived in this country in the late 1990s, I recall government literature extolling the virtues of Hungary’s central location and good infrastructure from a logistics point of view. Since the country has not changed its geography, the former still applies. And since the country’s motorway network has only expanded since 1998, clearly the latter still holds true, too.
What has changed, in the recent couple of years, are the attempts to further develop the rail network. First there is the Chinese funded north-south Budapest-Belgrade connection, which is eventually supposed to link with Athens and form part of China’s Belt and Road initiative to pave the way for Chinese goods to reach European markets. This is a roughly USD 3 billion high speed upgrade to existing track, with a possible completion date of 2023.
Then there is the high speed Visegrad Four line linking Budapest, Bratislava, Prague (or perhaps more likely Brno, with a later spa to Prague) and Warsaw that the V4 announced in October, and which has attracted the interest of the European Investment Bank. This is only at the feasibility study stage, with each country financing research into its own stretch of railway. There has been no suggestion of an overall cost or a likely timeframe, although EIB vice president Vazil Hudák did tell this newspaper in our last issue it would be “extremely challenging, spanning many years and involving significant financing”.
And then just this week, news broke of a proposed west-northeast line taking in Pécs, Szeged and Debrecen, and also including links with Vojvodina (Serbia) and Oradea (Romania). This 500 km, HUF 800 billion project, with a development timeline of eight-ten years, is perhaps most notable for its source. It is apparently being championed by one of the Prime Minister Viktor Orbán’s former lieutenants, MP János Lázár, who was all but omnipresent when he was the cabinet chief in the last government, and has been barely heard from since. Lázár told his local newspaper Délmagyarország that Orbán has accepted the idea, and the rail line will feature on the agenda of a joint cabinet meeting of the governments of Serbia and Hungary in April.
Thus far the Chinese-funded project seems the most likely to actually go ahead anytime soon, but the rush to rail shows how seriously the expansion (or at very least the discussion) of the logistical infrastructure is being taken. The fact that it is not just about more roads should also be welcomed.
And as our special report on the subject in this issue demonstrates, Budapest Airport is more than keen to play a role too, after yet another year of double digit cargo growth. Given the recent media reports of government sources being unhappy with how the airport is run, and the oh-so-subtle suggestion from the billionaire investor Lőrinc Mészáros, a key Orbán ally, that he would not mind running the airport, despite having no experience in the field, I thought the comment from Budapest Airport’s communication director Mihály Hardy that it enjoys the “very active support of the Ministry of Foreign Affairs and Trade, including the full personal backing by Minister Péter Szijjártó,” particularly telling.
SUPPORT THE BUDAPEST BUSINESS JOURNAL
Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.