Soaring Electricity Prices Hit Hungarian Rail Freight Sector

  • 24 Jun 2022 6:33 AM
  • Hungary Around the Clock
Soaring Electricity Prices Hit Hungarian Rail Freight Sector
Hungary could miss an EU target in increasing the role of the rail freight industry in transport as costs have surged due to rising electricity prices, 444 reports.

In 2011, the European Commission set a target of shifting as much as 30% of road freight to rail or waterborne transport by 2030 for goods transported further than 300km.

Electricity prices on lines managed by state railway company MÁV have become so expensive that it is cheaper to transport consignments from Serbia to Slovakia through Croatia, Slovenia and Austria than transit through Hungary.

High electricity prices and track access charges have seriously dented the competitiveness of rail cargo companies operating in Hungary.

The EU approved relief measures during the pandemic, allowing states to lower or waive track access charges temporarily. Unlike Germany or Hungary’s neighbours, the government did not make use of this option.

Rail cargo companies drew up their business plans based on electricity prices of Ft 93 per kWh, but MÁV bought electricity at Ft 120-130 per kWh in December for the first quarter.

Since then, prices have risen further to Ft 170 per kWh, translating to huge losses for rail cargo companies.

Gysev, on the other hand, sealed a contract in mid-2021 for 2022 electricity prices at Ft 42 per kWh.

Sources told 444 that the botched electricity contract led to the firing of MÁV CEO Róbert Homolya last month.


MTI Photo: Zoltán Máthé

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