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Hungarian railways prepare for EU accession with loans from EIB and EBRD
The European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD) are extending loans of ECU 60 million (US$ 64 million) and ECU 40 million (US$ 42.7 million) respectively to assist in the modernisation of Hungary's railways. In addition, EU-Phare is providing grant aid for environmental, safety and efficiency improvement and technical cooperation for management development.
Wolfang Roth, Vice President of the EIB, said: "Upgrading the Hungarian railways is crucial for economic development of the country and its integration into the European Union. The EIB will most certainly provide further support for future works in this area. It has recently set up an ECU 3.5 billion (US$ 3.7 billion) pre-accession lending facility for 10 central and east European countries and Cyprus doubling to ECU 7 billion (US$ 7.4 billion) its lending over the 1997-2000 period in these countries, one of the main objectives being to promote the adoption of EU standards and "acquis communautaire".
"A key objective of the modernisation programme is to improve the efficiency and commercial management of the Hungarian national railways, which carry nearly one-third of Hungary's freight traffic and a quarter of its passengers," said Charles Frank, Acting President of the EBRD. "As Hungary moves towards accession to the European Union, a modernised railway infrastructure will enable the country to increase its competitive position in Europe."
The EIB has approved up to ECU 120 million to the modernisation of the Hungarian railways of which a first loan of ECU 60 million is made available today. It will finance the upgrading of 340 km of rail track on four lines which form part of the core network on the priority international corridors Dresden-Budapest-Bucharest/Sofia and Trieste-Budapest-Lvov. In addition, obsolete equipment will be replaced and other equipment modernised across the 7,600 km national network.
The EBRD's ECU 40 million loan will finance the refurbishment of approximately 235 passenger coaches and the upgrading of up to 250 freight wagons. This will reduce operating and maintenance costs, improve the quality of service and increase the levels of cost recovery. International trade will also be facilitated as the freight wagons will be compatible with the western European network. In addition, the EBRD loan will enable the railways to introduce automated ticketing and a computerised freight accounting system to replace outdated manual systems. This will also help to reduce costs, improve cost recovery and provide better market data to match services to customer demand.
The high level of cooperation between the EBRD, the EIB and EU-Phare in developing this programme has paved the way for future collaboration in addressing other infrastructure needs in central and eastern Europe. In Hungary, both the EIB and the EBRD have committed around ECU 1 billion each in financing.
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