MÁV REFORMS MAY STOP

The government plans a lay-off of 11 000 workers in Hungarian State Railway Company.

The government would discuss the MÁV reforms in August but the most important decisions are still delayed in the Ministry of Economy and Transport and other ministries affected by the reform. If MÁV company does not get the necessary sources for the reform in 2004 the whole reform process may stop. The Prime Minister promised to develop the motorway system along with the development of the railway system as it is usual in EU states but in the budget of the next year only motorways are mentioned so far. MÁV company is in a desperate situation: only one pc of its network can be renovated annually, one third of its engines and wagons are useless, and its share on the transport market has been continuously diminishing. MÁV will have to dismiss 11 000 of its workers between 2004 and 2006. Though last year MÁV had a financial injection of the state its debts may reach HUF 64 billion this year and its loss will be about HUF 30 billion. The government expects the solution from the EU accession as Brussels supports railway development. The planned cutbacks mean that state subsidies for MÁV would be HUF 20 billion less each year after 2006.

Translated by Péter Szentmihályi Szabó