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Hungary's biggest public transport companies inefficient, says ministry paper

Hungary's biggest state-owned public transport companies are inefficient and their financing is unsustainable, the National Economy Ministry said in a paper on the country's public transport system published on Tuesday.“

The MÁV group, the Volán companies and the BKV operate inefficiently and their financing most resembles a bottomless well,” according to the paper.

The 2010 budget allocates HUF 240.2 billion for public transport, including HUF 181.2 billion for railway company MÁV, HUF 27 billion for long-distance bus company Volán and HUF 32 billion for Budapest transport company BKV, the ministry said.

The amounts do not include European Union funding, ticket discounts (expected to come to HUF 109 billion in 2011), the cost of building the capital's fourth underground line (HUF 27.7 billion) and funds "distributed for the smooth running of public transport" (HUF 1.1billion), it added.

The debts of MÁV amounted to HUF 291.2 billion at the end of 2010, the ministry said. A supplement to MÁV's 2009 report shows its debts were HUF 279.4 billion at the end of that year.

In addition to the HUF 32 billion in support for BKV allocated in the budget, the city of Budapest has requested HUF 19 billion in additional funding from 2011 on.

BKV owes banks HUF 77 billion, but it should also replace HUF 720 billion worth of assets that were completely amortised. Last year, BKV received a HUF 17.5 billion subsidy on top of its HUF 32 billion budget allocation for the smooth running of the company.

Volán's fleet of buses is outdated and their engines can only partly comply with EU requirements, according to the paper. The company's 36 regional companies carry more than 3.9 million passengers a day in 77,000 vehicles. Two-thirds of passengers can reach their place of work, another settlement or a doctor only by coach, the ministry noted.