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Railway workers to get HUF 9bn from MAV Cargo sale

Telco

Hungarian railway workers will get HUF 9bn from the sale of MAV Cargo, the former freight unit of state-owned railway company MAV, under an agreement signed by Prime Minister Viktor Orban and head of the Liga association of trade unions Istvan Gasko on Wednesday.

In 2008, a consortium of Rail Cargo Austria and regional railway company GYSEV, which is owned by the states of Hungary and Austria, bought 100% of MAV Cargo for HUF 102.5bn and a promise to invest HUF 43.5bn in the company over five years. Railway workers asked for a share of the proceeds from the privatisation - HUF 250,000 per employee or a total of about HUF 11bn - and held a series of strikes when their demand were not met.

Signing the agreement on Wednesday, Mr Oban called the decision by the previous government to sell the profitable unit a "serious error in national strategy". Sooner or later, MAV will again have a freight business, as without such a business it is difficult to imagine putting the deeply indebted company back on its feet, he added.

Under the agreement, railway worker will get HUF 1bn in 2011, HUF 4bn in 2012 and HUF 4bn in 2013.

When Mr Orban’s Fidesz party was in the opposition, it supported the demand of railway workers to share in the proceeds from the sale of MAV Cargo.

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