State-owned Hungarian railway company MAV and Austrian peer OBB signed a long-term strategic cooperation agreement in Budapest on Friday.
The agreement was signed by MAV chairman-CEO Ferenc Szarvas and OBB chairman-CEO Christian Kern.
The cooperation will improve the efficiency of both companies, raise their levels of service and give them a better position on a market where competition is increasing, they said.
Mr Szarvas said the two companies would establish a joint venture to carry out vehicle maintenance work OBB contracts to MAV.
Mr Kern said ownership in the JV would be 49-51%, with OBB being the majority owner. OBB wants the JV to repair 34,000 vehicles, he added.
MAV and OBB’s cooperation will extend to the traction segment too, he said.
MAV and OBB will also make a joint effort to boost the efficiency of rail freight service, Mr Szarvas said. Both companies acknowledge their joint interest in strengthening the role of the Zahony region, near Hungary’s border with Ukraine, in east-west rail freight deliveries, he added.
Mr Kern said OBB’s freight unit in Hungary, Rail Cargo Hungaria, had reduced its losses this year but was expected to become profitable in the coming years. OBB is not in concrete talks on the sale of Rail Cargo Hungaria shares, but the company is open to all good proposals, he added.