Ownership and control in the bus industry: the case of Hungary

Abstract

In Hungary, the impending expiry of existing operating licences for both urban and interurban bus services is leading to considerable pressure for change in the current system of ownership and control. Furthermore, the transport sector in Hungary faces several endemic problems. Consequently, this paper analyses the experience of the public transport sector in Hungary with respect to the current situation noting changes after 1990. At the national level, reference is made to both road-based transport (including car ownership and use) and (briefly) to railways. The situation in Budapest is then considered in detail. Next, the structure of the public transport sector in Hungary is discussed both before and after 1990 when the move towards a free market economy received new impetus. The paper examines, as a case-study, the recent experience of private bus operators in Hungary. Finally, drawing on experience elsewhere with possible models for privatization and deregulation in the case of bus operations, suggestions are offered on lessons to be learned by the governments of countries in Central and Eastern Europe as they assess the possibilities for alternative methods of ownership and control.