CHANGES OF ROAD ADMINISTRATION IN HUNGARY
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1 CHANGES OF ROAD ADMINISTRATION IN HUNGARY Andras Gulyas Ph.D. Hungarian Roads Management Co. PIARC Seminar 2005 Warsaw 1/25
2 Contents of the presentation Overview of the economic transition and its effect on the road sector General situation of the Hungarian road sector Organisational changes of the Hungarian Road Administration Role and position of the Hungarian Road Administration Experience of changes and lessons sons learned PIARC Seminar 2005 Warsaw 2/25
3 Overview of the economic transition and its effect on the road sector 1 The transition started in 1990 and after some difficulties the country became a developing market economy The membership of the European Union reached in 2004 is very important The economic growth has been recovered from its initial shock There is a rather strong correlation between the development of GDP and road traffic PIARC Seminar 2005 Warsaw 3/25
4 Development of GDP (volume index) and average daily traffic (ADT) ADT pcu/day National public roads Main roads GDP GDP % (1990=100) year 0 PIARC Seminar 2005 Warsaw 4/25
5 Overview of the economic transition and its effect on the road sector 2 The Ministry of Economy and Transport is responsible for management of road transport. Since 1990 were 4 Ministries and 8 Ministers Financial demands are always bigger than possibilities There was a well operating Road Fund between 1992 and 1999 Loans in the middle of 90 s s helped the road sector PIARC Seminar 2005 Warsaw 5/25
6 Road-related budget on 2001 based prices Billion HUF 120 economic transition Road fund maintenance and operation development 100 loans excluding high-speed road network development costs year PIARC Seminar 2005 Warsaw 6/25
7 General situation of the Hungarian road sector 1 Length of national roads including high-speed roads is km in 2005 The level of motorisation in Hungary in 2005 is 285 cars / thousand population Funding is mainly on State budget, 2 earmarked allocations Use of different EU funds, public private partnership (PPP) sources and bank loans PIARC Seminar 2005 Warsaw 7/25
8 General situation of the Hungarian road sector 2 Motorway tolls provide financing for maintenance and operation Presently a widely accepted time-based vignette system is in use Performance-based electronic tolling is planned in the near future The effect of economic transition on society shows itself at unusual ways, for example in road traffic safety. PIARC Seminar 2005 Warsaw 8/25
9 Accidents on national public roads economic transition light serious fatal government changes year PIARC Seminar 2005 Warsaw 9/25
10 Organisational changes of the Hungarian Road Administration Changes at the beginning of the economic transition Changes at the consolidation of the market economy Amendments of tasks within the central Road Administration Various forms of motorway management The upcoming organisational change PIARC Seminar 2005 Warsaw 10/25
11 Changes at the beginning of the economic transition Inn 1991 the powerful Road Management and Co-ordination ordination Directorate became the central organisation unit 19 independent county level road administration units were organised The Motorway Directorate dealt with the high- speed road network Fieldwork has been done by the so-called maintenance sites PIARC Seminar 2005 Warsaw 11/25
12 Changes at the consolidation of the market economy Inn 1996 partly the central unit and all district units have been transferred to non-profit companies owned by the Ministry of Transport Technical and Information Services on National Roads for background activities Too decrease number of State employees Too gradually bring non-profit companies in the market PIARC Seminar 2005 Warsaw 12/25
13 Amendments of tasks within the central Road Administration In 1999 operation and maintenance tasks werew relocated from Road Management and Co- ordination Directorate (RMCD) to Technical and Information Services on National Roads. Financing and development remained at RMCD The motive behind this change was mainly political Inn the beginning of 2004 the division of labour was realigned into its original form PIARC Seminar 2005 Warsaw 13/25
14 Changes of main functional tasks within the Road Administration Central level BUDGET Road Management and Co-ordination Directorate NON-PROFIT Technical and Information Services on National Roads Hungarian Public Roads County level BUDGET 19 County Public Road Directorates NON-PROFIT 19 County State Road Management Companies Financing Development Maintenance Operation Technical background PIARC Seminar 2005 Warsaw 14/25
15 Various forms of motorway management 1 The development of the underdeveloped motorway network started in 1999 and intensified itself in 2003 by passing the Act on High-speed Road Network In the mid 90 s s concession companies started to build and operate new toll motorway sections A lot of changes in State owned and private companies occurred until 1999 PIARC Seminar 2005 Warsaw 15/25
16 Development of the high-speed road network km Other high-speed roads Motorways government changes year PIARC Seminar 2005 Warsaw 16/25
17 Various forms of motorway management 2 Between 1999 and 2002 the Hungarian Development Bank was responsible for the financial management The Ministry of Economy and Transport got back the ownership and control of Motorway Administration in 2003 Public-private partnership (PPP) is taking part in the development State Motorway Managing Co. Ltd. has got the task of financing in 2005 PIARC Seminar 2005 Warsaw 17/25
18 Changes of main functional tasks within the Motorway Administration Motorway Directorate State Motorway Management Co. State Motorway Managing Co. Ltd. First Hungarian Concession Motorway Co. Ltd. M1 Toll Western Hungarian Motorway Operating Co. Ltd Vignettes (partly free) North-eastern Hungarian Motorway Developing and Operating Co. Ltd. M3 Toll State Motorway Developing and Managing Co. Ltd. National Motorway Co. Ltd. M5 Toll Alföld Concession Motorway Co. Ltd. STATE PRIVATE Financing Development Maintenance Operation Financing Construction Maintenance Operation M6 Duna Concession Motorway Co. Ltd. PIARC Seminar 2005 Warsaw 18/25
19 The upcoming organisational change 1 In 2005 a new merger will result one big central road administration unit including all county level State Road Management Companies The new Hungarian Roads Management Co. is a State owned non-profit company The new organisation provides almost all functions of central Road Administration Centralisation will result considerable savings The new organisation will be capable of receiving loans PIARC Seminar 2005 Warsaw 19/25
20 The upcoming organisational change 2 Goals of the current re-organisation: More efficient use of EU funds Conscious network-related related approach Economical operation, maintenance and development Rationalisation of administrative activities Increased effectiveness of asset management Transparent resource allocation Better supervision of performance 6 units instead of 25 earlier PIARC Seminar 2005 Warsaw 20/25
21 Changes of the Hungarian RA in time Central RA Road Management and Co-ordination Directorate Technical and Information Services on National Roads District RA-s 19 County Public Road Directorates 19 County State Road Management Companies Motorway Administration State Motorway Managing Co. Ltd. M1 M3 National Motorway Co. Ltd. M5 State 40% M6 PPP Financing: Budget Road Fund (+loans) Budget Budget (accentuated) Government: Conservative Socialist Conservative Socialist State State Budget State Non-profit State Co. Ltd. St. Bank Co. Private Private+State PPP PIARC Seminar 2005 Warsaw 21/25
22 Role and position of the Hungarian Road Administration The Hungarian road network is in the Upgrading stage (Cox model) The high-speed network is still in the Growth stage (Cox model) RA is an outputo based management organisation Traditional tasks have been outsourced RA is betweenb the separation and corporatisation phases (Talvitie model) Quality management is an important issue PIARC Seminar 2005 Warsaw 22/25
23 Experience of changes and lessons sons learned 1 The order of external drivers is: economic, social, safety, environmental The main drivers are political objectives: promoting national economic growth, increasing competitiveness, attracting foreign capital, decreasing regional differences The relation between organisational and governmental or financial changes is not clear Too many changes may have an effect against efficient production PIARC Seminar 2005 Warsaw 23/25
24 Experience of changes and lessons sons learned 2 Relations between organisation and tasks are sometimes not adequate Conditional tasks, for example the Final Beneficiary of an EU co-funded project Legislation background is often weak Commercial principles in the leadership Private sector participation is limited but increasing The non-profit public utility model proved to be applicable PIARC Seminar 2005 Warsaw 24/25
25 Thank You for Your Attention PIARC Seminar 2005 Warsaw 25/25 25/25
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