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Govt to assume maximum HUF 64bn in debt from state-owned railway this year

Parliament on Monday evening approved an amendment to the 2011 budget law stipulating that the government will take over outstanding debt from state-owned railway MAV to a maximum amount of HUF 64bn by December 30, 2011.

Parliament approved the amendment as part of legislation transferring county local-council institutions and property to the central government.

Under a government decree published early August, the state is to take over up to HUF 300bn of debt from state-owned railway company MAV and up to HUF 78bn of debt from the capital’s local transport company BKV.

Government officials have indicated, however, since early autumn that an adverse turn of global economic environment will make a review of the planned consolidation of MAV and BKV necessary. The government planned a full debt takeover of the two companies by the end of 2011 in its structural reform plan dubbed Szell Kalman plan, published in the spring.

In another amendment to this year’s budget act, Parliament approved to inject HUF 60bn in capital to state-owned Hungarian Development Bank (MFB). Under a government resolution taken last week, the capital injection will be carried out with immediate effect after being cleared by Parliament.