Hungary's pioneering motorway concession for the M1-M15 from the Austrian border toward Budapest is being transferred to the lenders. Unable to generate enough toll revenue to cover debt repayments, the completed highway is effectively being nationalized less than 4 years after it was opened in January 1996 under a 35-year concession. Only one of the original players, which invested 7% of the equity, will stay on, but only as operator. The government will convert project debt arranged for the concession company Elso Magyar Koncesszios Autopalya Rt. (ELMKA) into sovereign loans and repay Euro 210 million (US$220.5 million) under enhanced terms. Setting toll levels to suit western travelers alienated local drivers, who could see much lower tariffs in force at other Hungarian motorways. Differential tolls were frowned on by the European Union; however, ELMKA went some way toward differential rates by offering frequent-user discounts exceeding 40% in summer and selling prepaid return tickets with a similar reduction. Both of these concessions would have benefited mainly local drivers. Nevertheless, ELMKA's concession failed because revenues were well below expectations. The concession's demise leaves only the M5 in private sector control, though supported by state aid. The M3, which had reached as far as preferred bidder stage for a concession, was pulled back into the public sector in 1995. Its state-owned toll operator is expected to join ELMKA's successor as part of the new National Motorway Company, which has the task of building hundreds of kilometers of new motorways largely with state budgets.

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  • Corporate Authors:

    Public Works Financing

    147 Elmer Street
    Westfield, NJ  United States  07090-2433
  • Publication Date: 1999-7


  • English

Media Info

  • Pagination: p. 1-3
  • Serial:

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Filing Info

  • Accession Number: 00767838
  • Record Type: Publication
  • Files: TRIS
  • Created Date: Aug 27 1999 12:00AM