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MÁV facing restructuring, major layoffs

The new public transport strategy to be finalized by the end of summer and submitted to parliament in autumn aims to split the state-owned railway group MAV into three, while thousands of railway workers could be laid off due to the elimination of the state subsidies of supplementary services such as shunting, Friday's daily newspapers said.

Népszabadság said that MÁV cut the prices of certain railway track services as a result of a reshuffling of the state subsidies received as requested by the previous government. This will result, however, steep price rises in various supplementary industrial railways related services to an extent that it could completely wipe out orders for the latter ones.

Quoting an analysis prepared by MÁV, the paper said a "disappearance" of orders could lead to a revenue loss exceeding HUF 5.4 billion, including HUF 4.1 billion from the loss of revenue from track-use fees. The paper said this could make the work of 2,000-4,000 railway workers redundant.

Népszava said the public transport strategy will bring no novelties as it is largely based on the reforms decided upon by the Bajnai-government. This means that, under the original plans, the company maintaining the railway infrastructure, that is the track network, could be split off from MÁV Zrt, as well as the already independent passenger transport company.

Such a move was earlier impeded by a lack of funds, however, the European Bank for Reconstruction and Development (EBRD) would now be ready to provide a capital injection, which it was not willing to do in the months preceding the change of government, the paper said.

Magyar Nemzet has learnt that most of the leading officials of the MAV-owned companies will be dismissed as chances are good that the newly appointed president and CEO will regain the powers to appoint board members.

The Minister of National Development appointed Ferenc Szarvas, the present CEO of Hungary's government debt management agency ÁKK as MÁV president-CEO as of August 1 on Thursday.

The minister also recalled MÁV's boards as of July 31 and will appoint new board members effective August. (MTI-ECONEWS)