BOT (BUILD OPERATE TRANSFER) IN MOTORWAY DEVELOPMENT: HUNGARIAN EXPERIENCES

The Hungarian Ministry of Transport, Communication and Water Management in the late eighties recognised the huge gap between development need in the road rehabilitation and motorway construction field and the public financial sources available for this purpose. The most practical solution at that time seemed to be the direct involvement of private capital with less government contribution into project development, where the amount, form and structure of financing made the return of the invested private capital with an acceptable profit possible. In the road transportation field motorway developments are potential targets of private investors. Therefore the Government decided to award concessions to private firms or consortiums to develop, finance, construct and operate certain separated motorway sections. The process was initiated in 1991 by issuing the first invitation for prequalification for implementing the missing motorway link between Budapest and Vienna which was followed by four other invitations related to different motorway and river bridge projects. Since then 43 km 2 x 2 lanes motorway has been constructed from private money by the First Hungarian Motorway Concession Company and was opened to traffic in January 1996. Furthermore two other concession contracts have been signed and with the exception of one project, cancelled from the program in October 1995, all others are in a certain stage of realisation. The report gives more details of experiences in financing, contracting, risk sharing in public-private partnership and other related matters gained through the concession awarding process, as well as operation details about the first toll motorway in Central-Eastern Europe. For the covering abstract, see IRRD 890379.