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Political pressure slows public transport restructuring

Political pressure has slowed down the process of restructuring Hungary's public transport system, but the plan has not been completely watered down, government commissioner in charge of the task Károly Antali said in an interview published in daily Népszabadság on Monday.

Amendments to legislation must be made to reduce the size of the railway system, which will require the support of Socialist MPs, Antali said. Political pressure has slowed down the process, but has made it neither impossible nor softened it to the extent that the final result is nil, he added.

The government originally planned to discontinue passenger service on 59 railway lines, but the number has now been reduced to 27 and a half lines, even though Hungary could still meet its service obligations with a far lower level of rail passenger service, Antali said.

There are no plans to reduce headcount at state-owned railway company MÁV before general elections in the spring, but a few thousand staff must be cut within three years as labor efficiency must improve if the company is to be made financeable, he said.

MÁV takes in such little revenue from passenger services that the service could be made free of charge if the company could eliminate the cost of ticket sales and inspection, Antali said. This would result, however, in poor-quality, outdated services.

A 16.6% rise in public transport fees would be needed to offset the impact of inflation over the past one and a half years as well as of VAT rise, but only a 10% rise is politically conceivable, Antali said. Another 5% rise in the revenue could come from cutting back on discounts, he added, noting that 7 million of Hungary's 10 million inhabitants are eligible for some kind of discount. Cutting back on discounts together with the price rise, would save HUF 40 billion, in line with Hungary's commitment to the IMF.

In a fresh forecast published in November, the European Commission said it projected Hungary's general government deficit, as a percentage of GDP, would be over the target in 2010 because of the lack of detailed measures about cost cuts at the company equivalent to 0.4% of GDP. (MTI-Econews)