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MÁV to stop outsourcing overhead line maintenance

State-owned Hungarian railway company MÁV will stop outsourcing maintenance of overhead lines from January, saving an annual HUF 2bn from 2012, chairman-CEO Ferenc Szarvas said at a press conference on Thursday.

MÁV started outsourcing maintenance of its almost 7,000km of overhead lines in 2005 at an annual cost of about HUF 5bn.

The contracts of the two companies carrying out the task at present will expire at the end of this year. A decision not to renew the contracts was made after they asked for MÁV to raise their compensation to HUF 5.2bn after doubling their offer just a year earlier, Szarvas said.

Taking over the activity will require the one-off purchase of about HUF 2.5bn of assets, but this amount will be quickly recouped, Szarvas said.

About 50 MÁV staff work on overhead line maintenance at present, but the number will rise over 600 from January. Most of the new hires will come from the two contracted companies.