Hungary needs to upgrade motorway-financing plan

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The new plan is needed due to the announcement made by Finance Minister János Veres on Tuesday, saying that Hungary's state budget should include motorway cost items. (that will increase the deficit target for 2006 by 0.6 percentage points of the GDP). Due to this change, it the original plan is less likely that to be pursued, which should sign a 75-year service contract with State Motorway Management Zrt (ÁAK), and should finance necessary developments from issuing bonds says the government. Felsmann noted that the new situation would not affect planned motorway developments, for the loans ÁAK has taken out are enough to finance motorway developments until the end of September. The government is discussing a plan proposed by Economy and Transport Minister János Kóka in May, which says that 20%-40% of ÁAK should be privatized on the Budapest Stock Exchange (BÉT). Felsmann stressed that government-backed loans may be a good option in the current situation, and it is also possible that the government increases the capital of ÁAK. (Portfolio)

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