QUESTIONS OF PUBLIC AND PRIVATE PARTNERSHIPS IN CENTRAL AND EASTERN EUROPE: CONCESSION MOTORWAY DEVELOPMENT PROGRAMME IN HUNGARY

In 1990, following detailed analysis relating to the necessary 600km motorway network development, the Hungarian Government decided to bridge the lack of public sources by involvement of private capital. In the forthcoming year, the laws and regulations were modified, and established a legal background for the new procedures. Since 1991 the Ministry of Transport Communication and Water Management, acting on behalf of the State, awarded concessions to three private consortiums to finance, build and operate motorway sections or river bridges. The financial closing was achieved successfully on the M1/M15 and on the M5, some operation experience has been obtained. The financial closing is still pending on the bridge project. One of the concession awarding procedures was cancelled by the Government and a company owned by the State was established to implement the motorway from budget and loans raised and guaranteed by the State. Another motorway project is still waiting for a decision to be issued by the Government on the procedure it will follow. The advantages and disadvantages of private sector involvement will be summarised. The level of toll (acceptable or not to the public), consequently the diversion of traffic from the motorway, the additional environmental problems on the parallel routes, political and economical goals (local and national) are all questions which should be dealt with if the state intends to continue a successful development programme with private sector involvement. For the covering abstract, see IRRD E100685.