Economy
Budapest to shore up BKV by new charge on vehicle owners
The new road usage fee would be charged on every vehicle that uses the roads of the capital city in form of a paper-based sticker. It would cost HUF 10,000 per month, practically as much as a monthly pass of BKV (HUF 9,800). The police would be responsible for checking whether the cars have the stickers or not.
According to the calculations in the document obtained by Index, Budapest would be able to collect HUF 32 billion a year, assuming that 50% of the 600,000 vehicle owners will pay and 10% of them will park their cars and switch to other means of transport instead of paying the new fee.
The document, however, acknowledges that even a 50% willingness to pay may be an overly upbeat estimate, not to mention the difficulty of control, the public outcry that would most certainly be sparked and the unfairness towards those who hardly use their cars.
In a letter obtained by the portal Tarlós explains the cabinet that the only way to find the missing HUF 21 billion for the operation of BKV is to amend laws and allow Budapest to boost its revenues.
Index said the proposal of the monthly road usage fee was conceived by one of the district mayors, but it was already put forward as the least realistic opportunity to gain funds for the BKV.
HUF 73 bn loss in 2012
BKV is looking at a loss of HUF 73 billion this year. If the Budapest municipality cannot agree with the government on sharing his loss, the company could go bust, but the parties have a rather different view of the whole situation.
The municipality claims that at their last general assembly they went as far as they could, granting a HUF 9 bn emergency credit and a HUF 6 bn subsidy for the company. They had decided a long time ago to convert the credit into subsidy in two to three months, considering that BKV would not be able to repay it anyhow. This amounts to HUF 15 bn and the municipality also pledged to achieve HUF 5 billion cost savings at the company, which would improve BKV’s balance by HUF 20 bn in total.
In exchange for its “sacrifice" the municipality wants the government to lift the freeze of a HUF 32 bn state subsidy that the company gets as annual normative for years anyhow, and assist BKV in conjuring up the remaining HUF 21 bn. This would have been achieved by Tarlós’s proposals, out of which it seems only the road usage fee will be supported.
The Economy Ministry sees the story in a rather different light. It is glad the Budapest municipality managed to find HUF 20 bn funding in January. It is so pleased that it would be willing to unlock the HUF 32 bn state subsidy but only HUF 20 bn of it. This way Economy Minister György Matolcsy could claim 20+20 equals 40, and so the remaining HUF 33 bn should be equally shared between Budapest and the state. The state’s share of this burden would be HUF 16.5 bn, which could be partly covered from the HUF 12 bn that remained frozen and HUF 4.5 bn could be added from general reserves. And so the state did what it had to, the ministry could wash its hands.
According to a ministry report obtained by Index, the municipality would have to take care of the remaining HUF 16.5 bn hole on its own. It can raise tariffs and/or introduce a road usage fee, it says. It may also refinance expiring loans with state guarantee or tighten BKV’s belt even further; maybe it can find other areas where it could save some bucks.
The government is set to decide on BKV’s financing and the aforementioned proposals (in view of the ministry’s opinion) on Wednesday.
According to the calculations in the document obtained by Index, Budapest would be able to collect HUF 32 billion a year, assuming that 50% of the 600,000 vehicle owners will pay and 10% of them will park their cars and switch to other means of transport instead of paying the new fee.
The document, however, acknowledges that even a 50% willingness to pay may be an overly upbeat estimate, not to mention the difficulty of control, the public outcry that would most certainly be sparked and the unfairness towards those who hardly use their cars.
In a letter obtained by the portal Tarlós explains the cabinet that the only way to find the missing HUF 21 billion for the operation of BKV is to amend laws and allow Budapest to boost its revenues.
Index said the proposal of the monthly road usage fee was conceived by one of the district mayors, but it was already put forward as the least realistic opportunity to gain funds for the BKV.
HUF 73 bn loss in 2012
BKV is looking at a loss of HUF 73 billion this year. If the Budapest municipality cannot agree with the government on sharing his loss, the company could go bust, but the parties have a rather different view of the whole situation.
The municipality claims that at their last general assembly they went as far as they could, granting a HUF 9 bn emergency credit and a HUF 6 bn subsidy for the company. They had decided a long time ago to convert the credit into subsidy in two to three months, considering that BKV would not be able to repay it anyhow. This amounts to HUF 15 bn and the municipality also pledged to achieve HUF 5 billion cost savings at the company, which would improve BKV’s balance by HUF 20 bn in total.
In exchange for its “sacrifice" the municipality wants the government to lift the freeze of a HUF 32 bn state subsidy that the company gets as annual normative for years anyhow, and assist BKV in conjuring up the remaining HUF 21 bn. This would have been achieved by Tarlós’s proposals, out of which it seems only the road usage fee will be supported.
The Economy Ministry sees the story in a rather different light. It is glad the Budapest municipality managed to find HUF 20 bn funding in January. It is so pleased that it would be willing to unlock the HUF 32 bn state subsidy but only HUF 20 bn of it. This way Economy Minister György Matolcsy could claim 20+20 equals 40, and so the remaining HUF 33 bn should be equally shared between Budapest and the state. The state’s share of this burden would be HUF 16.5 bn, which could be partly covered from the HUF 12 bn that remained frozen and HUF 4.5 bn could be added from general reserves. And so the state did what it had to, the ministry could wash its hands.
According to a ministry report obtained by Index, the municipality would have to take care of the remaining HUF 16.5 bn hole on its own. It can raise tariffs and/or introduce a road usage fee, it says. It may also refinance expiring loans with state guarantee or tighten BKV’s belt even further; maybe it can find other areas where it could save some bucks.
The government is set to decide on BKV’s financing and the aforementioned proposals (in view of the ministry’s opinion) on Wednesday.
