“Employee representation is important, but somehow it is not right that labor unions representing the bus division of BKV each year attempt to blackmail the management,” declared Budapest Mayor István Tarlós during a recent presentation to industry leaders. Tarlós was highly critical regarding the current state of the entire bus fleet, BKV’s HUF 800 billion internal debt and overextended trade union influence.

According to Gábor Nemes, vice president of BKV union KEKSz, mass transport should not be made “profitable” as a strategic goal as the side effects of operating in the black are often difficult to neutralize. Another reason that the bus division should not be outsourced is because the overhaul of the bus park can be procured most efficiently from within the current organizational structure, costing “only” about HUF 68 billion, he said. This is a meager sum compared to the total outstanding internal debt portfolio of HUF 800 billion, he added.

The Budapest transport center BKK, which oversees public transport in Budapest, along with BKV, are currently working on the necessary evaluations before making any outsourcing and/or financing decisions. “Regarding any outsourcing decisions, we can only come to a final determination by the beginning of the summer at the earliest,” Dávid Vitézy, head of BKK told media representatives.

There are major issues costing billions that need to be settled with the government and the two respective ministries involved. Tarlós, however, stated that he does not negotiate with ministers, but directly with Prime Minister Viktor Orbán. He said that he has secured a pledge of HUF 77 billion on behalf of the government to pick up the current debt portfolio as it pertains to outstanding bank loans. It is expected that an agreement will be signed to that effect by the summer.

According to János Atkári, economic adviser to Tarlós, the solution to this problem is a bit more complicated. He stated that BKV’s difficult financial situation stems from the simple fact that the contracting entity (the municipality) has not been providing sufficient funds to cover the cost of services rendered for the past 20 years. At the time of EU accession, Budapest signed a new agreement for 8 years, in which the company did not force the issue of adequate funding secured for such services ordered.

BKV’s contract with the municipality will expire next spring. In the new contract, the municipality should provide 100% of the cost of services ordered, which will amount to an additional HUF 40 billion in funding annually.

Perhaps the unions can help in lobbying the government. Since they do not only fight for their employees’ wages, but also aim to resolve the financial deadlock the company has been facing, noted Nemes, immediately adding that currently there is no need to lobby for employee wage increases as the latest wage negotiations have been successfully concluded.

All employees with monthly wages below HUF 300,000, except for recent hirees, have received some type of wage increase this year. BKV currently has no plans for reducing its work force and also does not plan any fare increases either.