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Hungary: Pécs to privatize local transport company

The local council of Pécs (southwest Hungary) plans to sell a 49% stake in the city’s public transportation company by October, deputy mayor Bertalan Tóth said at a press conference on Monday.

The city wants to sell a 32% stake in Pécs Transportation (PK) in exchange for a Ft 1 billion capital raise to PK’s current capital of Ft 2.1 billion ($14 million). If the buyer is able to operate the company profitably at the operating level even as the local council lowers subsidies, it will be allowed to purchase a further 17% stake for Ft 562 million and take over PK’s management rights.

The buyer will be expected to cut the age of PK’s fleet of buses by ten years, purchasing buses at a price to be decided by the local council.

Pécs would like to sell the stake to Hungarian Bus and Mecsekbusz, Tóth said. He added that a public tender is unnecessary because the capital raise will technically be made by PK itself.

PK runs up big losses every year that the city must cover, Tóth said. This year it is expected to close the year Ft 615 million in the red. PK CEO said earlier that the company carries about 96 million passengers a year with its 170 buses. (MTI-Econews)