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The deal will expand the Budapest Transport Center’s responsibilities to include suburban rail and bus services.
Transportation and Investment Minister Dávid Vitézy and Budapest Mayor Gergely Karácsony signed the agreement, which establishes joint state and municipal ownership of the transport organizer, known as BKK.
The wholly state-owned National Transport Center will acquire a 50% stake in BKK through a HUF 2 billion capital increase. The government provided the funding Wednesday.
The capital and the state will each contribute HUF 170 bln toward operating regional public transport.
From Jan. 1, the company will operate as the BKK Budapest Metropolitan Area Transport Center. It will retain its existing responsibilities in Budapest while taking over the commissioning of HÉV suburban railway services and Volánbusz routes that start in Budapest and remain within Pest County.
The agreement follows preparations at the Oct. 1 meeting of the Metropolitan Public Development Council, a joint government-city forum. The Budapest General Assembly approved the shareholder and cooperation agreement at the end of October.
Vitézy described the agreement as historic, saying it would address fragmentation that increased when the state took over HÉV lines and suburban services in 2016.
The network will be reorganized gradually, with the aim of bringing suburban public transport closer to the service standards available in Budapest’s outer districts.
The MÁV group has begun procuring 250 new buses for the commuter belt, while another 150 will arrive through a separate procurement. The additional vehicles will also support replacement services during planned railway renovations.
Vitézy said several major European Union-funded projects were expected to begin in the coming period. Extended replacement bus services would be needed on the Szentendre, Csepel and Ráckeve HÉV lines and several other railway lines.
Work is also underway to simplify and unify the fare system.
The minister cited transport governance in the Vienna and Prague regions and major German cities as comparable models. He said closer cooperation with local governments could also be considered elsewhere in Hungary.
Karácsony said the agreement could deliver a fundamental change in public transport across Budapest and its commuter belt, improving services for more than 2.5 million people across the metropolitan area.
Better suburban services could also help reduce the volume of cars entering the capital, supporting Budapest’s environmental objectives, he said.
“Politics is not about politicians, but about citizens,” the mayor said, expressing hope that closer cooperation between the government and municipalities would improve public services.
BKK’s current chief, Ádám Bodor, will remain in office until the end of March under the agreement. Karácsony said he was satisfied with Bodor’s work and would support his continuation, but the regional organization’s leader would be appointed jointly.
The mayor said numerous investments planned over the next four years could substantially improve Budapest, while asking residents for patience during construction. Most projects would need to be completed by the end of 2030.
The Metropolitan Public Development Council is expected to meet again Nov. 26.
Karácsony said there was agreement that a unified Budapest parking system should be operated by the capital, with the necessary legislative amendments already before Parliament.
The distribution of parking revenue remains subject to negotiations with district leaders and assembly members. District leaders have rejected his proposal for a 60-40 split between the renovation of roads managed by the capital and those managed by the districts, but he said he remained confident a compromise could be reached.
Hosting the Olympics will not be on the next council meeting’s agenda, Karácsony said.
He reiterated that no state or public funding should be spent on implementing an Olympic concept during the current parliamentary term. Planned city improvements already overlap with the infrastructure envisaged for hosting the Games and would proceed independently of any Olympic bid, he added.
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