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HUF 300bn MÁV debt consolidation off agenda, says state sec

An earlier planned HUF 300bn debt consolidation at state-owned Hungarian railway company MÁV has been taken off the agenda, National Development Ministry state secretary Pál Völner said on Friday.

The debt consolidation was taken off the agenda to ensure the budget deficit target is met, Mr Volner said, answering a question at the Hungarian Railway 2011 conference.

MÁV's operating costs come to HUF 350bn a year, of which about HUF 105bn is covered by its own revenue, but even including subsidies, the company is still HUF 50bn in the red, he said. A restructuring must be implemented to reduce this shortfall, as outlined in the Széll Kálmán Plan, he added.

There is HUF 98bn available at present for vehicle purchases, and a decision has to be taken on how the money is to be divided among the state's transport companies, he said.

Völner said he hoped a national holding company for all public transport in Hungary would be established by January of 2012.