Hungary discusses 40% reduction of track access charges

Hungary is considering reducing its track access charges by 40 per cent, following the example of several EU countries. This measure could support rail freight during the ongoing pandemic, argues HUNGRAIL, the strategic partner of the Ministry for Innovation and Technology. It has filed an official proposal towards this end.

The ministry has prepared decision-making material for the government suggesting to reduce track access charges, but no decision has been taken yet, the ministry indicated. According to Lajos Hódosi, managing director of HUNGRAIL, this decision should be taken around mid-July.

“We have filed a proposition in collaboration with our member companies with regard to the unique opportunities provided by the regulation. We were involved in different consultations. The process was not easy, we had to make several amendments, however, we seem to be at the final stage. Hopefully a decision will be made by mid-July, following which the aid can be granted from the autumn to the railway undertakings”, he said.

What has been proposed?

With the proposal, the Hungarians hope to make use of the possibility created by Regulation 2020/1429, which was introduced by the European Commission in October 2020. This enables EU countries to significantly reduce the financial burden on railway undertakings. In some cases, track access charges are completely waived (France, Austria), while in others, they have been reduced (Germany, the Netherlands).

“Several Member States have granted state aid for the year 2020-2021 in accordance with the Regulation on top of their already existing state aid of the rail freight sector, and their number keeps growing. In contrast, Hungary still has not seized the opportunity, regardless of the fact that the Hungarian railway undertakings must pay the same charges for accessing the infrastructure as their Austrian competitors, for instance”, Hódosi explained.

Competition

It is especially the competitive position of the Hungarian railway network that the country is concerned about. “Railway track access charges have less of an impact on route choice than public roads, as there are significantly more aspects to consider in railway operations. However, there are still many instances where the carrier or the owner of the goods can choose alternative routes”, HUNGRAIL explains.

The organisation is referring to the Eurasian route between Ukraine and Austria as an example, which can transit through Hungary, but also Slovakia. As Slovakia offers a discount on trains on the annual timetable, this route is much cheaper than the route through Hungary. Based on the current prices, “a Ukrainian-Austrian transit through Slovakia costs 660 euros, while the same between Záhony and Hegyeshalom costs 1,285 euros”.

Boost for the sector

The Regulation does not require the pre-authorisation of the European Commission, hence it can provide an instant boost to the sector’s competitiveness. Those countries, which miss the opportunity, will develop severe competitive disadvantages, which Hungary experiences already”, Hódosi said.

But in general, support for the rail freight sector is a good argument to make, he believes. “It can also boost the prospects of the sector in total. The competition of rail transport, especially when it comes to combined transport operations, is fierce, hence every euro cent counts. The overall position of rail freight within the transport sector is not exactly ideal. It has remained at 18 per cent for almost a decade. Meanwhile the hidden subsidies of the road transport sector still exist, making the shift to rail a quite difficult process.”

Hungary as a gateway

Hungary is currently heavily investing in its infrastructure in order to gain a more prominent role on the international landscape. It also wants to claim its role as a European gateway to and from the East. Currently 80 per cent of its traffic is international. Therefore, it is eager to offer competitive fares to all users of the railway network.

Generally, rail freight transportation’s numbers in Hungary rose by 7,5 per cent during 2020. Demand for rail services increased substantially while traffic volumes also got boosted. The most significant increase took place in the intermodal sector of the country. Maybe not in terms of numbers, since the Hungarian intermodal market saw a rise of almost 2 per cent, but in terms of acquiring efficiency and speed in transportation.

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Author: Majorie van Leijen

Majorie van Leijen is editor of RailFreight.com, online magazine for rail freight professionals.

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