Local, national governments agree on Metro 4 financing

“The cabinet decided to offer financing for urban public transport based on the number of passengers, and to match the sums provided by local governments for road renovation schemes,” government spokesman Zoltán J. Gál told reporters after the cabinet session.
He said the government approved the three agreements concluded by the mayor and the prime minister.
According to Demszky, a three-element financing system will solve the problem of modernizing the road network.
“City transport will stand on three pillars. The first is the [transport firms’] own revenue, the second is the support of the municipality and the third is the state budget financing, meeting EU requirements,” Demszky said.
With the government’s decision, Hungary meets the EU requirement that transport companies should not be forced into loss-making operations and their deficit should be compensated from public money, Demszky affirmed.
“The agreement is the most positive turn in the life of municipalities since 1990,” Demszky added.
Medgyessy and Demszky said introducing the financing structure is a significant breakthrough. Demszky welcomed the prime minister’s decision, saying the government intends to provide predictable, normative support for transport development.

Easing the jams

According to a press statement of the Budapest municipality, transport development is especially important because people waiting in traffic jams result in billions of forints’ loss for the Hungarian economy each year.
Increased traffic also damages the road network, the statement said. The situation is especially difficult in Budapest, which covers only 0.5% of the country’s territory but hosts 40% of its traffic, it added.
“The solution is to intensely develop public transport and continuously reconstruct the road network, but municipalities do not have enough financial resources for the tasks,” the press statement said.
According to the government’s transport reform plan, the state would take part in financing local public transport in all cities where it is a problem to maintain public transport.
The government also will spend more on environment-friendly public transport investments.
The government is supporting the building of Metro 4 with a longer track than originally planned. Instead of the originally planned ten stops, the metro line will be constructed with 14 stops. A loan from the European Investment Bank (EIB) will cover 75% of the costs.
The government made a decision on constructing the first section of Metro 4, between Etele tér and Keleti pályaudvar, last May. It was also agreed at that time that the government would make a decision on financing the next section, to Bosnyák tér, by 2005.
According to the municipality, the EIB has since said that it is only able to maintain its favorable loan conditions if the longer version is built.
However, according to Fidesz – the party that is in opposition in both national and Budapest assemblies – that announcement only serves PR purposes.
“The Parliament passed a law on Metro 4 last April,” said Zoltán Pokorni, vice chairman of Fidesz. “It is funny that at the government meeting before the European Parliament elections, the government presents a decision that was almost unanimously accepted by Parliament, namely that Metro 4 should have 13 stops, as a new announcement, a new development, part of their campaign.”
He added that now is the time for action, not rhetoric.
“The real problem is that not a single stroke of the hoe was made during the last year. The work should start now,” he said.

More than a metro

According to Budapest Municipality, the total cost of the investment is Ft 76.7 billion at 2002 prices. Of the costs, 70% will be financed by the government and the remaining will be financed by the capital.
The costs to the city include the price of procuring new metro cars for Metro 2, worth Ft 6.2 billion.
According to Budapest Municipality, the investment is much more than a new public transport line. It changes the traffic on the surface and transforms the image of the concerned area, the municipality argued. Among these, it mentioned that the renovation of Thököly út can start; a new park-and-ride parking lot will be constructed on Bosnyák tér; southern Buda and Zugló will start developing; and the metro will attract additional investments, commercial and service providing facilities.
The planned date for completing the metro construction is 2009. However, progress might be hindered by a recent decision by Budapest City Court to adjourn a trial that could slow down the issuing of environmental and railway authority permits.
The lawsuit blocking Budapest’s fourth subway, initiated by homeowners concerned over the potential damage to their properties, will be heard by the court in mid-October. As a result, the tendering process cannot start in the summer as planned and the entire project will be halted until a binding verdict is reached.
László Gulyás, who heads the municipality-owned project management agency, DBR Metro Project Directorate, said the project coordinator has to review the current planning and construction schedule.

by Anita Benko


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