MÁV Hungarian State Railways Zrt. is in big trouble, its operations could become unfundable in the autumn.
MÁV has requested the help of the Ministry of Transport to raise funds for its additional expenditure of up to HUF 200 billion (EUR 498 million) this year and in 2023, VG.hu reports. The state-owned company’s burdens have increased primarily due to the surge in electricity prices. Without government help, its operations could become unfundable by the beginning of autumn.
The MÁV Group had already calculated an increase in its electricity and fuel costs in last year’s planning, napi.hu reports. However, the actual data show a more dramatic increase than forecast. VG.hu understands that the actual energy costs of the passenger transport subsidiary MÁV-Start Zrt. in the first half of the year were almost four times higher than a year earlier.
The railway company’s problems are exacerbated by the declining but still noticeable impact of the epidemic on revenues and defence expenditure, or the mounting interest charges due to the prolonged war.
Although the company has made significant savings by scaling back and rescheduling some of its developments and investments while rationalising its operating costs, these measures cannot offset the energy price explosion, VG.hu writes. Relying only on the resources at its disposal could, according to the news portal’s, make the railway company’s operations unfundable as early as the beginning of the autumn.
The group is asking the ministry to intervene to raise up to HUF 200 billion in additional funding this year and next. Further uncertainty is being brought into the system by the train drivers’ strike initiative, with the union trying to force a pay rise to compensate for the effects of last year’s inflation.
Last year, MÁV Zrt. and its three large subsidiaries were still profitable. At that time, it was able to cope with the difficulties caused by the coronavirus epidemic and the business environment, but in 2021 it still relied heavily on state support.
Source: napi.hu, vg.hu