Public transport in an emerging market economy - the approach in Budapest

Visitors to Budapest are impressed by the convenience, frequency and extent of the public transport services provided by BKV, the Municipal operator of services. In the outlying areas beyond the Municipality, rail and bus services provided by MAV and Volgnbnsz are well organised and bring passengers to interchanges where they can transfer to BKV services, or complete their journey on foot. There is a wide range of services: buses, trolley buses, trams, metros, suburban railways, suburban bus services and even river boats making up a system that, for residents is accessible, relatively easy to use and affordable. The level of output for Municipal services is indicated in Table 1. This shows a comprehensive public transport system with a relatively dense network and large vehicle fleet, but with a proportion of operational vehicles below that which would be expected in western Europe. Despite these favourable initial impressions, there are problems which must be solved if Budapest is to maintain a high public transport modal share and constrain the growth in private car usage. Passenger demand for Municipal services is indicated in Table 2. Total demand in 1997 was 1.3 billion passengers, but this has fallen by 14% since 1994. The table indicates that buses carry the largest share of passengers, with Warns and the metro also having a significant share of the market. The key problems are not unique to Budapest, many of the world\u27s major cities face the same issues, which are: the level of public transport funding, the increase in car ownership and the tack of integration between public transport operators, particularly in the outlying areas. There has been a continuing reduction in the level of State and Municipal subsidy and there are difficulties hindering the public transport sector in it\u27s competition with the private car: for example: the lack of integration of tariffs, and the duplication of services between the three operators, BKV, MAV and Volfinbusz. This latter issue is of concern, if commuting by car from beyond the Municipal boundary is to be successfully challenged by public transport. However, the transitional economies of Eastern Europe are in a special position: as indicated in Table 1, there are enviable levels ofpublic transport infrastructure that is a positive legacy of the old order and is one which should be protected. However, the costs of maintaining this level of service are becoming prohibitively high, and, unless some method of increasing efficiency is sought, there is a danger of rapidly contracting services and the drastic cutting of governmental fimding. As indicated in Table 3, the cost recovery rates are low and the level of subsidy is equivalent to 16% of the Municipal budget. A particular issue in Budapest is the shit\u27c in emphasis of the remit of the public transport operators. In the past, service output targets were the main goal but now the move away from a centrally planned to a market based economy has lead to a desire to control costs across the economy, including public transport. The new focus for public transport operators is one aimed at increased cost recovery whilst maintaining levels of services and ultimately public transport modal share