PUBLIC TRANSPORT IN AN EMERGING MARKET ECONOMOY - THE APPROACH IN BUDAPEST

The consequences of Hungary's change to a more market orientated economy have been profound. Many of the large state-owned industries, that dominated previous journey to work patterns, have been closed; there has been a growth in smaller, more dispersed private sector employment; and a rapid increase in car ownership and usage. All of these factors have led to a reduction in public transport patronage which, coupled with constraints on public sector spending, have led to service reductions and big fare increases. Traditionally, public transport services have been heavily subsidised, at considerable cost to the Budapest Municipality and the Hungarian State, and there is pressure to increase the amount paid by passengers, but at the same time maintaining a modal share in Budapest of 55-60%. In 1993 the Budapest Municipality agreed to the setting up of the Budapest Transport Association which would co-ordinate the activities of the three public transport operators - the municipal public transport operator, the state owned long distance bus operator and the state owned railways. The work described in this paper, which was undertaken with EU PHARE funding, considers: recent trends in public transport operations and the organisational framework within which it operates; the key issues that need to be addressed in order to prepare public transport in Budapest for the changes that are likely to occur to the year 2000 and beyond; the institutional framework required in order to set up an appropriate transport association that could allow for future competitively tendered services; the integration of fare structures for the operators within the association; and the financial and economic impacts on operators, passengers and the funding agencies of such changes. For the covering abstract see IRRD E102382.