Drive in First Class!

STATE MOTORWAY MANAGEMENT COMPANY LTD.

DRIVE IN FIRST CLASS!

SUSTAINABILITY REPORT

STATE MOTORWAY MANAGEMENT COMPANY LTD.

SUSTAINABILITY REPORT 2011

Table of Contents

GREETINGS FROM THE OWNERS ...... 7

ABOUT THE REPORT ...... 11 COMPANY OVERVIEW ...... 13 CHANGES OVER THE PAST TWO YEARS ...... 18 STAKEHOLDERS ...... 23

CORPORATE ECONOMIC RESPONSIBILITY ...... 27 Economic performance ...... 27 Sales ...... 31 Control ...... 34

CORPORATE SOCIAL RESPONSIBILITY ...... 35 Customers are our no. 1 priority! ...... 35 Motorway communication – widespread information service ...... 41 Trafﬁ c safety ...... 42 Electronic devices along the motorways ...... 52 More than just a workplace ...... 58 Sponsoring and donations ...... 64

CORPORATE ENVIRONMENTAL RESPONSIBILITY ...... 67 Environmental protection ...... 67 Water ...... 78 Noise protection along motorways ...... 80 Waste management ...... 82 Energy ...... 85 Air pollution...... 91 IMPRINT ...... 95

7 8 GREETINGS FROM THE OWNERS

One of the key elements of Hungary’s development and future prosperity is a high quality expressway network that provides fast and reliable access to even the most remote regions of the country. This road network is operated at world-class quality standards by the State Motorway Manage- ment Co. Ltd., a company within the portfolio of the Hungarian Development Bank (MFB).

With a workforce of over 1,000 employees, the Company has direct and indirect impacts on the country. It sounds like a cli- ché, but it is true that a carefully maintained and always safe expressway network is like the circulation system of the economy. It stimulates virtually everything: a highly developed infrastructure attracts investors and it is a statistical fact that regions close to an expressway network have a higher rate of employment and a higher rate of income for their municipalities. Hun- gary’s nearly 1,400 km long expressway network not only allows suburban residents access to employment, entertainment and other possibilities but also provides opportunities for those living farther away. Fast transportation is also an indispensable prerequisite to the development of tourism.

The operation-related business strategy of the State Motorway Management Co. Ltd. rests on four main pillars: safety, ef- ﬁ ciency, environmental awareness and customer satisfaction. Safety: even though transportation is inherently dangerous, accident statistics on motorways are actually lower than those for secondary and other roads. Efﬁ ciency: one of the top priorities of the company management is to utilise available resources for business processes without any wasting. Environ- mental awareness: the negative impacts of motorway operation on wildlife and habitats need to be limited by all available means. Customer satisfaction: this is our top priority because the company’s services focus on road users.

Exercising proprietary rights, the Hungarian Development Bank appreciates not only the meticulous and high-quality work exercised by the State Motorway Management Co. Ltd. during the maintenance of its road network, but also the responsible thinking represented by its employees - all of which is amply demonstrated in this latest edition of the company’s Sus- tainability Report. László Baranyay Chairman and CEO MFB Zrt.

9 10 Recommendation

We all travel: whether by car, boat, air, rail or on foot, for short and long distances. One thing is certain, though: we are all on the move. This is how it has been for thousands of years and how it will undoubtedly remain for quite a long time. Transportation means not only discovery, development, industry, commerce and trade, but also culture and free- dom. Ancient Romans, who designed and built the fi rst quality road networks, knew this principle thousands of years ago. It still holds true today in the 21st century that the infrastructural network of a country conveys value and quality and provides a guarantee for development. The expressway network of Hungary is impressive not only in comparison with the size of the country but also because of the key role it plays in European transit transportation. As a result, the State Motorway Management Co. Ltd., as the operator of the majority of Hungarian motorways and expressways, is not only responsible for the quality of the service but also has an impact on the country’s reputation abroad as well as on Hungary's economic and social life at home. This is the approach that defi nes the way we work. Although sustainability has come into fashion recently, it is already a tradition for us. Our company has long exercised economic, environmental and social responsibility. Effi cient, transparent, corruption-free operation is expected not only by our owners but also by society as a whole. Protection of the environment and nature is a priority in our activities, as our motorways and expressways run in close proximity to residential areas and wildlife habitats. Improving traffi c safety and driving culture has virtually become our second nature that determines our fundamental operations. These fundamental principles will be henceforward given high priority in the course of our operation, therefore, these are included in both our short and long term strategies. In order to retain the ‘sustainable company’ title also in the future, we will make additional efforts regarding the quality operation. This short list clearly indicates that our stakeholders represent virtually all segments of society. Travelling on motorways and express roads is no longer a rarity, as this road network has become a part of our everyday lives and is used by the majority of people at least occasionally. On one hand, this imposes increased an responsibility on us, the operator of the road network. On the other hand, as our presence becomes increasingly ubiquitous, many believe that they know us well. I am certain that this report has something new to offer to each and every reader. With a history of over ten years, our company places just as high a priority on stability as on development. For this very reason, we not only use proven methods, but also employ the latest technologies and equipment in Hungarian road operation to ensure that you will have a fi rst-class driving experience. Therefore, in addition to describing our activities, this sustainability report offers a “behind the scenes” insight and provides an overview of all that is not visible from a car travelling at 130 km/h.

Attila Bakó Chief Executive Ofﬁ cer State Motorway Management Company Ltd.

11 12 ABOUT THE REPORT

he State Motorway Management Co. Ltd. is committed to sustainability, Tsustainable development and social responsibility. As the Company places a high priority on regular and credible information and, in compliance with the practice of the past years, it is publishing its sustainability report again, two years after the previous one. In this report, the Company presents its business, economic, social and environmental activities over the past two years as well as its achievements and their impacts. Our goal is to ensure that our report reaches the broadest possible audi- ence, speciﬁ cally those using the Hungarian road network, our business partners, the population and the municipalities of the towns and villages affected by the expressway network, as well as the authorities and non-gov- ernmental organisations. We also trust that our employees will gain much new and useful information from this report with respect to those activities of our companies less known to them. Our publication is printed on recycled paper using energy-conserving print- ing methods. The highlights of the information about the Company are printed on the side, next to the text and they are designed to clear up some misunderstandings and clarify certain information.

The report only contains data for the State Motorway Management Co. Ltd., and does not extend to subsidiaries and other investments. The Company has no information about the materials produced, generated and released by road users; thus the report does not include such global data. Economic data is presented in line with the provisions of the Act on Accounting, while information related to social responsibility and environmental protection is taken from our internal databases controlled by our certiﬁ ed management systems.

13 Key parameters of SMMC Ltd.’s sustainability report:

Reporting period: 2009-2010 Date of previous report 2007-2008 Reporting cycle biennial Our report has been certiﬁ ed by KÖVET Association for Sustain- Certiﬁ cation able Economies, an independent organisation, with the involve- ment of our stakeholders.

The report has been drawn up according to the G3 guidelines published in 2006 by the Global Reporting Initia- tive (GRI). We chose the GRI guidelines because this UN created organisation was the one that developed the most widely known and recognised reporting framework for businesses in the ﬁ eld of corporate social responsibility worldwide. The compliance level of SMMC Ltd.’s 2011 sustainability report is “B+”. For further information about this report and our Company, please contact our colleagues using the contact information given in the imprint.

Domitilla Csohány Editor

14 COMPANY OVERVIEW

stablished on 29 August 2000, the State Motorway Management Com- E pany Ltd. is responsible for the operation and maintenance of the expressway network under its supervision, for the sale of the road-use authorisation, i.e. e-vignettes, and for the electronic collection of data to support the control of road-use authorisation on toll roads (without having to stop vehicles). The Company plays a decisive role in the infrastructural and economic development of our country to provide public road access to Hungary from abroad. By exercising its basic functions (operation, maintenance), the Company provides for the safe trafﬁ c on motorways at a high level of qual-

The quality and environmental policy of SMMC rests on four main pillars: safety, efﬁ ciency, environmental consciousness, satisﬁ ed customer.

15 The Hungarian State owns 100% ity to ensure that all motorists can reach their destinations as of the shares of SMMC Ltd., planned and on time. and as of 1 July 2010, ownership rights are exercised s a state-owned company – under the contracts made with the by the Hungarian Development A Coordination Centre for Transport Development (KKK) – our Bank Ltd. revenues derive from the Road Toll Fund. This agreement, besides ensuring long-term stability for SMMC, with the interests of motorway users in mind, creates a correlation between the services provided by the Company and the revenues of the Company.

Because of SMMC Ltd.’s strategic importance, its new owner is committed to keeping the Company under state ownership in the future. The Company can thereby demonstrate that state operation does not conﬂ ict with efﬁ ciency. Based on its organisational structure and results, SMMC Ltd. measures up to any motorway operating company, even at the international level.

The network

The State Motorway Management Co. Ltd. is responsible for the operation and maintenance of roughly three-quarters of Hungary’s expressway network. In terms of numbers, in 2011, SMMC Ltd.’s Buda- pest central ofﬁ ce, 15 engineering bureaus in the country as well as contractors for motorways M8 and M9 oversaw 739.8 km of motorways, 207.7 km of main roads (routes), 390.5 km of junction branch- es and service area access roads, 125 service areas, and over 1,267 bridge sections.

16 The majority of the Hungar- ian expressway network is operated by the State Motor- way Management Company Ltd. with the following excep- tions: Motorways M5 and M6 (excluding the sections within loop M0) and the entire length of motorway M60.

SMMC Ltd. receives the motorways Out of the motorway sections supervised by SMMC Ltd., for operation from the National a total of 591 km is subject to toll charges for all vehicles, Infrastructure Development Ltd. in a while on 80 km, only lorries with a permissible weight of fully completed state, which means that our Company is not responsible over 3.5 tons are obliged to pay a toll. Vehicles in this latter for determining routes or for designing category are also subject to toll payment on 118.6 km of and building motorways. express roads and main roads (the electronic data collection required for toll payment control on these roads is also taken care of by SMMC).

17 Roads managed by SMMC Ltd. (August 2011)

Motorway M1 (Budapest–Hegyeshalom) Express road M0 (M5 – Route 11) Motorway M3 (Budapest - Nyíregyháza) Express road M2 (M0 – Vác Route 2) Motorway/Route M30 (M3 – Miskolc) Express road M9 (Route 6 – Route 51) Motorway M31 (M0 – M3) Express road M19 (Motorway M1–Route 1) Motorway M35 (M3 – Debrecen) Express road M70 (Letenye (M7) – Tornyiszentmiklós) Motorway M43 (M5 – Makó) Route 700 (city-bound main road of M7 to Budapest) Motorway M5 (Budapest – M0) Express road M15 (M1 – Rajka Border Crossing) Motorway M6 (M0 - Érd / Martonvásár junction) Express road/Route 4 (Vecsés - Üllő bypass section) Motorway M7 (Budapest – Letenye) Route 354 (Debrecen north bypass) Motorway M8 (M6 Dunaújváros Bridge – Road no. 51) Route 403 (Nyíregyháza east bypass) Express road M0 (between M1 and M5)

Total length of roads managed by SMMC Ltd., 2008–2010 (km)

Express roads / Junctions / Motorways main roads service sections 2008 695.6 167.2 363.7 2009 695.6 207.7 379.2 2010 708.1 215.2 386.6

Tasks

The primary tasks for SMMC Ltd. include the operation and maintenance of the majority of the Hungarian expressway network, the sale of road use authorisations and cooperation in the control procedure with the National Transport Authority. In all cases, our activities are regulated by laws and contracts in compliance with laws.

18 Wherever possible, we carry All operations related activities out maintenance activities are carried out by the engineering bureaus, including: employing innovative technologies that prioritise environ- road control mental concerns. dispatch service checking motorway and road accessory elements, bridges cleanup duties for areas under the engineering bureau’s administration garbage collection and removal service area operation Functioning expressways and adjoining pavement cleanup structures are subject to continuous cor- cleaning of traffi c signs, mile markers, barriers, noise-re- rosion, deterioration, and damage due duction fences, concrete and steel dividers to the compound effect of various fac- maintenance of roadside vegetation tors. The wear and tear of through traf- cleaning of motorway structures and drainage systems fi c, the erosive effect of weather condi- maintenance of lightning fi xtures on roads and bridges tions, and the breakdowns resulting from repair work on barriers, noise-reduction fences and extraordinary events necessitate regular bridge railings work, which are called maintenance ac- repair of potholes tivities. Our company performs some of securing diversions these maintenance activities with the help repair of traffi c and directional signs of subcontractors. securing accident scenes In addition to road management tasks, preparation for winter conditions our Company also performs a special protection against icing service to the state by carrying out com- clearing snow mercial and customer service activities installation and removal of snow protection structures. related to road use authorisation.

19 CHANGES OVER THE PAST TWO YEARS

ompared to the previous reporting period (2007–2008), the State Mo- C torway Management Co. Ltd. has implemented a number of key strategic changes over the past two years. In addition to the continuously expanding road network under our management, the ownership and organisation structures of the company were transformed in 2010. In order to increase the quality of its services, our Company has participated in a number of research and development projects over the past years, as a result of which we have deployed new technologies in the Hungarian expressway network. Due to the Connect and Easyway euroregional projects funded by the European Union, we have deployed a number of intelligent transportation systems (ITS) and services in our network. For more information about devices supporting operation and information to motorists, see the chapter entitled ‘Motorway electronics’. In 2009, SMMC Ltd. launched one of its most signiﬁ cant research pro- grammes, also closely related to environmental protection and increasing trafﬁ c safety. In cooperation with Hungarian universities and associations, we have launched a research programme designed to last for a number of years and aimed at reviewing roadkill accidents on motorways and testing wild animal deterrent solutions. For the currently available partial results of the research , see the ‘Wild animal deterrents’ chapter.

Changes in the network In January 2009, fi ve boxes containing two automatic speed cameras were tested along the section of express road M0 connecting motorways M1 and M5. The police regularly switch the speed cameras between the boxes to ensure that even motorists who regularly drive along this section would not know which of the fi ve boxes contain the two cameras. Due to the speed reducing effect of the cameras, the number of accidents have signifi cantly dropped in the south sector of express road M0.

20 In 2009, our company took over the management of express road M2, one of the public roads with the highest accident rates. The SMMC’s Traffi c Safety Group placed the reduction of the number of accidents on this road as a top priority task. In addition to reinforc- ing traffi c signs and road markings, the Company installed repeated warning signs at sections where the express road with two lanes on either side narrows to a bidirectional one-lane road. At four locations, we installed fl uorescent signs to warn about oncoming traffi c and used Klemmfi x road blocking and warning products to divert traffi c to prevent collision with oncoming traffi c. The most spectacular solution was provided by a system previously unknown in Hunga- ry: a double continuous white line with a red painted strip 50cm wide along the most hazardous section of the road. As a result, traffi c lanes became narrower (3.1 m) thereby forcing motorists to slow down. In addition, the central area road section painted red clearly indicates ‘no overtaking’. This measure has yielded the expected results with only one head-on collision on this particular section since then, and even that incident was caused by skidding sideways due to ex- cessive speeding. In June 2009, a new complex service area opened at Motorway M31 in a picturesque setting, km section 38 of express road M0 named the ‘Alacskai running between the hills around Gödöllő. rest area’. The facility features a fuel station and a res- taurant on both sides of the road.

21 Following the opening of motorways M6 and M60, in April 2010 SMMC Ltd. opened a new customer service offi ce in Pécs. Even though these new motorway sections are not operated by our Company, they are also part of the Hungarian e-vignette system. We decided to open this new facility to provide a more convenient, in-person customer service to those living in the southern Trans-Danubian region. In the second half of 2010, the motorway network operated by SMMC Ltd. expanded with two new motorway sections: motorway M31 opened in July and the fi rst section of motorway M43 in October. M31, a part of the European E71 route, offers a new connection between express road M0 and motorway M3. Not only will the new motorway reduce congestion at the M0-M3 junction and the section of M3 between Budapest and Gödöllő but it will also shorten the route for cross-country transit traffi c by 15 km. Also, the traffi c on main Route 3 between Kerepes and Kistarcsa and on express road M0 between Árpádföld and Csömör is expected to be much lighter. The new 12 km section will be open free of charge to all vehicle categories. The new section will be operated by the State Motorway Management Co. Ltd’s Motorway Engineering Bureau at Gödöllő. In October 2010, the section of motorway M43 bypassing Szeged was opened. The section of motorway M43 that stretches from the junction with Route 5 and the junction with Route 47 will have limited availability until it is fully opened (scheduled for April 2011). Motorway M43 is operated by SMMC Ltd. and for this reason Engineering Bureau no. 15 of Makó was built, which, for the time being, works on a Szeged site.

Changes in control procedures

As of 1 January 2009, based on Article 33/B Section (8) of Act no. I. of 1988 on the Transport on Public Roads, the National Transport Authority (NKH) is responsible for controlling road use authorisations. Since then, SMMC Ltd. has been performing certain support tasks in the control process such as creating a list of differences among databases and the administration of ﬁ nes. For more information on our control activities, see the ‘Control’ chapter.

Organisational changes

Ever since the foundation of the State Motorway Management Co. Ltd., 100% of the shares have been owned by the Hungarian state. In comparison with the previous reporting period, however, the authority exercising proprietary rights over the Company has changed a number of times. In 2008, our Company belonged to the Ministry of Transport, Telecommunication and Energy then to the Hungarian National Assets Management Ltd. Since July 2010, proprietary rights have been exercised by the Hungarian Development Bank (MFB). As a member of the MFB group, our Company’s goal is to ensure high quality, seamless performance of our tasks and efﬁ cient and economical operation. The highly qualiﬁ ed professional staff at SMMC Ltd. are key in achieving this. 22 The new operating structure of SMMC

Supervisory Board

Chief Executive Ofﬁ cer

Central Business Branch Technical Branch controlling bodies

Business Sales and control Management Operation and Controlling Directorate

Engineering Customer Service Bureaus

Corporate governance

In 2010, the Board of Directors of SMMC Ltd. was recalled by the owner. By law, the top The Supervisory Board supervises and evaluates the management of the Com- management body pany on behalf of the entity exercising the shareholder’s (proprietary) rights. The of SMMC Ltd. is the Supervisory Board for the Company consists of at least three but no more than six Supervisory Board natural persons. Two-thirds of its members are appointed by the entity exercising headed by the Chief the shareholder (proprietary) rights; the remaining one-third of the members, i.e. Executive Offi cer. the employees representatives, are delegated by the works council from among the employees of the Company for a term of three years, after obtaining the opinion of the trade union operating at the Company. Pursuant to Act C of 2000 on Accounting, the Company is required to commis- sion an auditor who is appointed by the entity exercising the shareholder’s (proprietary) rights. In accordance with the relevant provisions of law, the auditor shall carry out the audit of the books as laid out in the Act on Accounting, and during the audit he/she shall verify that the annual report of the Company drawn up in line with the Act On Accounting conforms to statutory regulations and provides a reliable and true account of the Company’s assets and fi nancial standing and a showing of its profi ts/loss. The CEO manages and controls the operating structure of SMMC, within the framework of the Articles of Association and the Organisational and Operational Rules, and in accordance with the resolutions made by the entity exercising the

23 shareholder’s (proprietary) rights. The Chief Executive Ofﬁ cer supervises the personal performance assessment system operating throughout the Com- pany through the managers directly reporting to him. In order to ensure practical implementation of the transparency principles of corporate governance, SMMC Ltd. has its own internal audit system. To ensure the Company’s efﬁ cient and effective operation and for the management of the risks related to the Company’s operation, this complex internal audit system includes management control, control integrated in the work process, internal inspections conducted under the professional supervision of the Supervisory Board, the external inspections carried out as ordered by the owner as well as the control system audits analysing appropriate and standard operation. The Internal Audit group regularly analyses the complete range of risks relate to business and operating processes and presents the key risks in its reports to the Company’s CEO and Supervisory Board. By implementing a regulated rules of procedure, it examines operating areas and procedures and presents recommendations to implement changes. The group performs an objective examination of the various activities, checks compliance of the Company’s activities and its bookkeeping.

Changes in the business control system

Meeting customer needs is fundamentally important in the operation of the The operation of SMMC State Motorway Management Co. Ltd. We control our business operation to Ltd. is controlled ensure that they meet the expectations of both our customers as well as our by a process based owner. For the purpose of sustainable growth, we carry out our services with- control system. in the framework of the occupational health and safety criteria system to keep the related environmental emissions under our control and even lower whenever possible. To facilitate effective work, we have implemented the following control systems: MSZ EN ISO 9001:2009 on quality control, MSZ EN ISO 14001:2005 on environmental control and MSZ 28001:2008 on occupational health and safety. The above systems are integrated into our corporate governance system.

24 STAKEHOLDERS

he State Motorway Management Ltd. has a wide range of stakehold- Continuous communi- Ters. Our company considers all partners and customers ever in any cation with stakehol- contact with us our stakeholders. ders is a basic criteria Organisations enforcing regulations are often accused of being authori- for meeting expecta- tarian. This can only be avoided if we treat interest groups, communities tions. living along the motorways, and road users as equal partners. Regular and two-way communication with stakeholders has been a top priority for SMMC since the very beginning. This allows us to present an image of being a quality service provider to road users, a problem-free solution to the owner, a fair business partners to our suppliers, a profes- sionally competent management body to our professional partners and NGOs, and a workplace offering a long-term career opportunity to employees.

Key stakeholders:

Road users Authority Owner Employees Communities located along the motorways Legislators Suppliers Interest groups Professional organisations Partners NGOs Media

25 s a responsible company, we maintain regular and mutual UP-TO-DATE TRAFFIC IN- Atwo-way communication with all our stakeholders, and we FORMATION VIA TEXT MES- keep them informed about our current professional activities. In SAGE: +36 70 777 4636 doing so, we rely on various channels, including personal and business meetings, annual and mid-year publications (sustain- Our SMS service helps road users. By sending ability report, fi nancial statement, internal newsletters, other in- a standard fee text message to the number formation materials, etc.), company and media events (press above with the number of a given specifi c conferences, sport day, conferences, seminars, etc.), press re- motorway (e.g. M3 or M7), you can obtain leases, variable message signs (VMS) and the web (Internet, in- up-to-date information on events and data tranet). regarding the particular motorway. It is especially important to provide travellers and organisations dealing with traffi c management, logistics or information pro- vision with up-to-date information. For that reason, our website (www.motorway.hu) features an interactive map to provide continuous information about current diversions, construction works, accidents and fuel stations. In addition, our Call Centre (at phone number +36 40 40 50 60) offers a 24-hour service to not only answer questions but also to receive information from callers. Commercial radio stations are highly valuable partners, as our company is legally bound to keep the travelling public ade- quately informed. Our dispatchers provide live traffi c information about motorways on various commercial radio stations several times a day.

26 Our stakeholders can also meet us in person. Currently we op- We are members of the following organisations: erate 11 wheelchair accessible customer service ofﬁ ces. • Hungarian Association of Internal Auditors • International Association of Internal Auditors In the course of our activi- • GRSP Hungary Road Safety Partnership Association ties, we of course cooperate • KÖVET Association for Sustainable Economies (The Hungarian Associa- with various professional or- tion of Environmentally Aware Management) ganisations. This is realised • Hungarian Innovation Association through long-term partnerships • Association of Hungarian Security Managers or relationships established for • Makadám Engineers’ Club only the duration of individu- • Hungarian Road Association al projects. Due to the nature of • Hungarian Concrete Association our activities, we cooperate on • 3R Hungarian Remix Association a regular basis with the Trafﬁ c • ASECAP , the European Association of Companies with Concessions for Directorate of the National Po- Motorway, Bridge and Tunnel Tolls (indirect membership) lice Department, the National • ITS Hungary Association Accident Prevention Committee • Information Systems Audit and Control Association (ISACA) (OBB), the Hungarian Nation- • Hungarian Association of Information Technology Companies (IVSZ) al Ambulance and Emergency • Hungarian Association of Logistics, Purchasing and Inventory Manage- Service and the Disaster Man- ment agement agencies.

27 28 CORPORATE ECONOMIC RESPONSIBILITY

Economic performance

he economic performance of the State Motorway Management Co. Ltd. Tis primarily based on the profi t realised by carrying out activities in a cost-effective way, the profi t on services for customers on the market as well as the revenues on the investments of the Company’s liquid assets. Since 2009, the Company’s main activity for the state has been carried out for a fi xed service fee with no profi t included.

The most signiﬁ cant revenues of SMMC come from the commissioned sales of e-vignettes and the payment of ﬁ nes. These revenues are managed separately and transferred to the state treasury each month.

The majority of our operating revenues come from the service fee for our main activity, the payments for the maintenance/repair works and revenues from services for market players. Our company receives no state funding.

Coordination e-vignettes Centre for Transport Development

Revenue from the sale of e-vignettes is not a revenue proﬁ ted by SMMC as we transfer these amounts to the Coordination Centre for Transport Development supervising the Road Toll Fund.

29 SMMC revenues (thousand HUF)

2008 2009 2010 Revenues transferred to 45,535,254 43,746,604 42,864,806 other entities Operating and other 26,998,493 22,328,121 21,950,202 revenues Revenues from own 23,701,684 2,684,895 2,330,874 ﬁ nancial investments Extraordinary revenues 376,264 2,930,727 3,312 Total revenues 96,611,695 71,690,347 67,149,194

Compared to the previous years, in 2008 the Company generated exceptionally high revenues from its own fi nancial investments. This was due to the sale of our nearly 40% share in AKA Holding Zrt. that year. As a result, the Company realised HUF 19,261,760,000 as an exchange gain from the transaction. In 2009 and 2010, this item included interest income on liquid assets. SMMC was granted HUF 374 million in 2008 and HUF 2.8 billion in 2009 in EU funding the Connect and Easy- way projects. Even though these were accounted for as extraordinary revenues, they do not impact the fi nancial performance of the company and we have transferred these sums to KKK. The amounts transferred to other entities discussed on the section of revenues above play a signifi cant part in operating costs and expenditures.

SMMC’s operating costs and expenditures (thousand HUF)

2008 2009 2010 Revenues transferred to 45,535,254 43,746,604 42,864,806 other entities Operating and other 24,865,777 20,224,263 21,545,583 revenues Extraordinary expenses 467,087 2,880,126 6,691 Total expenses 70,868,118 66,850,993 64,417,079

Extraordinary expenditures are those investment projects completed in 2008 and 2009 and handed over to KKK within the framework of the Connect and Easyway projects. The pre-tax result for 2008 is much higher compared to both the 2009 and the 2010 results. The favourable pre-tax result is caused by the signiﬁ cant increase in the other incomes from ﬁ nancial operations.

30 SMMC revenues (thousand HUF)

2008 2009 2010 Pre-tax result 25,743,577 4,839,354 2,732,115 Proﬁ t per balance sheet 0 724,228 2,132,522

Our Company paid dividends to the owners in the year 2008 to the accounts of earnings and accumulated proﬁ t reserve of that year, while in 2010 to the accounts of the earnings of 2009.

LISTED IN THE TOP 100

For years, the State Motorway Management Ltd. has ﬁ nished high on the TOP200 list of the largest corporations. The Company’s management is aware of the responsibility that comes with its position and thus prioritises professional, environmental and economical considerations in the course of performing its activities. Based on its net annual revenue of 2009, the Company placed 99th on the TOP200 list of Figyelő, and 93rd the previous year. The ofﬁ cial ranking appeared in the publication entitled ‘Figyelő Top200’ issued in October 2010

Indirect economic effects

The expressway network has not only direct, but also indirect economic ef- The highly deve- fects in the affected regions, areas and settlements. The most important of loped infrastructure those effects is that motorways contribute to the development of the local attracts investors economy and offer more opportunities for the suppliers in the region to mar- and, statisticaly- ket their products and services. ly speaking, the Totalling close to 1,400 km in length and covering the entire country, the Hun- regions close to the expressway garian expressway network signiﬁ cantly reduces “distance” between places network have a hig- in remote corners of the country. By reaching their destinations faster, people her rate of employ- living farther from large cities can better utilise the employment, leisure and ment and a higher other opportunities provided by those large population centres. rate of income for The expressway network also plays a signiﬁ cant role in the development and the municipalities. promotion of tourism. Tourists can reach Hungary’s famous places quicker

31 SMMC Ltd. provides a and more comfortably by using the motorways, thus increasing the revenue from signifi cant contribution tourism in the given regions. By using this quick method of transport, Hungarians to the operating reve- can also travel more easily to other European counties. nues of the affected settlements: In 2010, Due to its geographical location and the expansion of the European Union, the over 400 municipa- majority of our main roads are part of the international road network experiencing lities benefi ted from above average transit traffi c day after day. Prior to the opening of expressways, the total of HUF 253 million of local busi- those living along those routes used to be exposed to heavy noise and air pollu- ness tax paid by the tion due to the continuous fl ow of heavy lorries passing right in front of residen- Company. tial homes. As the roads managed by SMMC Ltd. always bypass residential areas, they indirectly provide a quiet and healthy environment for a large number of towns and villages by eliminating transit traffi c passing through them. Motorways, of course, also pass near settlements that previously had no signifi - cant motor vehicle traffi c. This higher level of traffi c may cause higher noise pollution and may reduce the value of local people’s residential properties. SMMC Ltd., as the public road operator, continuously monitors noise pollution and takes appropriate action when needed. These negative impacts only affect a very small fraction of the population that live near motorways while the benefi ts of the expressway network are enjoyed by large segments of society.

Overall, the direct and indirect economic and social impacts of motorways are viewed as positive.

32 The increasing attention to global warming has an indi- SMMC Ltd. spends an increasing amount on rect economic impact on the performance of the Com- research and development each year pany. Climate change made its effect felt in Hungary during the 2009 winter operating period. The amount of Amount (million HUF) salt used for de-icing the roads was far below the aver- 35 age of the previous years. This may be an extraordinary 30 25 short-term phenomenon, but, unfortunately, it might in- 20 dicate a long-term trend due to climate change. 15 The State Motorway Management Co. Ltd. performs 10 5 its tasks primarily based on its own resources while di- 0 rectly contributing to society by paying taxes and con- 2008 2009 2010 (Year) tributions and using locally available workforce and domestic services. As indirect impacts, the contracts in effect with the state urge efﬁ cient operation and the stable team of experts provide signiﬁ cant know-how to the Company and the transportation industry as a whole.

Sales

E-vignettes – road use authorisation

The price of e-vignettes is not Motorways, express roads and specifi c sections of the main roads in Hunga- determined by SMMC Ltd. but ry can be used only after paying a road toll, i.e. by purchasing an e-vignette. specifi ed by Decree 36/2007 The State Motorway Management Company Ltd. (SMMC) sells motorway vi- of the Minister of National Development. gnettes on the basis of a contract (Vignette Contract) with the Coordination Centre for Transport Development (KKK). Czech, Slovakian, Slovenian and Austrian motorway vignettes are also available in our customer service offi ces. In order to facilitate fast and convenient administration, e-vignettes can be purchased at a number of locations and at any time of the day. Sales points

33 include SMMC’s customer service ofﬁ ces, our ofﬁ cial retail partners, fuel stations, and can also be purchased through text messages, over the Internet or by telephone. Between 2008 and 2010 road tolls did not change even though the total length of toll roads increased every year.

Total length of the toll road network (km)

Toll expressway Toll expressway Toll transit Year (category D1, D2, D3 (category D2, D3 (category D2, D3 Total and D4 vehicles) and D4 vehicles) and D4 vehicles) 2008 727 225.3 470.2 1422.5 2009 727 233.3 470.2 1430.5 2010 875 236.3 470.2 1581.5

E-vignette prices between 1 January 2008 and 31 December 2010 (HUF, VAT included)

Toll categories D1 D2 D3 D4 1-day - 2,760 2,760 2,760 pre or post- 1,170 / (585*) 4-day season --- high-season 1,530 / (765*) Weekly 2,550 6,600 10,200 13,200 Monthly 4,200 12,600 18,000 22,500 Annual 37,200 106,500 159,000 198,000 *Motorcycle e-vignettes are available for 50 percent of the price of a D1 category 4-day vignette.

Vehicle categories :

D1 ≤ 3,5 t 3,5 t < D2 ≤ 7,5 t 7,5 t < D3 ≤ 12 t 12 t < D4 3,5 t < Bus ≤ 12 t 12 t < Bus

E-vignette sales ﬁ gures 2008-2010

2008 2009 2010 Number of units 17,441,186 17,298,740 17,732,504 Gross revenue 51,600,000,000 50,051,445,405 50,853,519,075 from sales (HUF)

34 The revenue from the Falling sales revenues in 2009 were clearly the result of the world economic sale of e-vignettes does crisis. In 2010, sales began to increase again, but in terms of revenues still not serve to fi ll the coffers of SMMC, as all lagged behind 2008 fi gures. This is partly due to the fact that the VAT content sales revenue is transfer- of road use authorisations grew from 20 to 25% in July 2009. red in full to the Road Toll Operability of the e-vignette sales system is one of the top priorities of the Fund. State Motorway Management Co. Ltd. In this spirit, we implemented signifi - cant IT improvements in October 2010, which did not cause any interruption in our dealings with sales partners and customers. The new mirrored servers have now reduced the time that it takes to inspect and fully register road use authorisation to less than 0.25 seconds. In addition, the system also allows for the full availability of all required resources SMMC’s new sales during periodic extra loads, primarily experienced at the beginning of the system can process year and before long weekends. up to 10,000 road To be prepared for any problems - as temporary interruptions can occur with use authorizations any IT system - we have a backup solution in place that enables the system per hour, which cuts to accept and confi rm sales requests even when the database is down. We down e-vignette will continue to improve this system with our partners to ensure that travellers purchasing time to can purchase their e-vignettes under any circumstances. a few minutes even during peak peri- ods.

LOYALTY BENEFITS

Procuring the annual road use authorisations can be a complex task for companies with large fl eets of vehicles. The colleagues at the Toll Collection and Customer Relations Directorate continuously improve our services to make service to road users as simple, convenient and fast as possible. This is why we send out a letter to our regular business customers at the end of each year and in addition to providing them with general information, we also offer them the option to make group purchases. This service has a number of benefi ts to our customers because they do not need to remember to purchase their road use authorisations, they get fi rst-hand information about the latest changes and rules and they do not have to go out and purchase e-vignettes in person. Instead, they can return their reply by mail or validate their e-vignettes immediately via a special web interface. While in 2008 these letters were all mailed to our regular customers, in 2009 we began to use electronic communications. In order to reduce paper use and associated costs, we sent close to 90% of our DM letters by email in 2010.

35 Fixed cameras check road use authorisations at 12 road sections of our network. Our colleagues ﬁ nd unauthorised road users by comparing the recorded vehicle registration numbers with the those in the database.

Control

Controlling the payment of road use authorisation has changed over the past years. As of 1 January 2009, based on Article 33/B Section (8) of Act no. I. of 1988 on the Transport on Public Roads, the National Transport Authority (NKH) is responsible for controlling. Since then, SMMC Ltd. has been performing certain support tasks in the control process such as creating a list of differences among databases and the administration of ﬁ nes.

Purchase of e-vignettes may be checked by three methods: • ﬁ xed, installed cameras (EFER visual checking); • mobile inspections with cameras installed on vehicles, at variable locations; • mobile inspection teams halting trafﬁ c and carrying out inspections in person. The State Motorway Management Co. Ltd operates the cameras required for the control procedure and processes the images while in full compliance with the provisions on privacy laws.

Motorists cannot get away with unauthorised road use because – in addition to the ﬁ xed cameras – vehicles equipped with mobile cameras check road use authorisation.

36 CORPORATE SOCIAL RESPONSIBILITY

Customers are our no. 1 priority!

ustomers are at the very centre of the services provided by the State C Motorway Management Company Ltd. Our customer is the Coordina- tion Centre for Transport Development (CCTD), which subjects the proper performance to a set of detailed criteria. It monitors the fulﬁ lment of the criteria through our network on a weekly basis, and in the case of discrepan- cy it imposes so called penalty points. The penalty points directly decrease our Company’s revenue. This system ensures our Company’s interests to corres pond substantially to the customer’s interests by meeting the detailed expectations set out in our contract. Important evidence of our contractu- al operation is that in the last three years of our operation the occurrence of errors, for which penalty points are imposed, have been in the thousandth order of magnitude, these are actually not appreciable in statistical terms. However, we are aware that CCTD purchases our services for the travelling public, thus they are certainly also considered as our customers. We do our best to satisfy our customers - i.e. road users. Clients visiting our of- ﬁ ces with complaints always receive prompt, polite and precise service. When communicating with clients – be it through personal, written or telephone correspondence – our customer service representatives provide courteous service as they perform their tasks with the utmost care and polite service. We offer a wide range of customer services to ensure simpler, faster and more convenient administration.

Customer service ofﬁ ces – services in person

Our Company’s Toll Collection and Customer Relations Directorate operates 11 customer service ofﬁ ces along motorways M1, M3, M30, M35, M5, M6,

37 M60, and M7, which primarily perform traditional customer service functions. In addition to sales activities, our staff at these offi ces can perform the following administrative tasks: - Transfer; - Vignette purchased twice by mistake. - Licence plate change; - Theft / write-off; - Theft / write-off; - Incorrect toll category / change of category; - Incorrect toll category / change of category; - Incorrect licence plate number; - Incorrect licence plate number; - Certifi cation of authorisation; - Certifi cation of authorisation; - Vignette purchased twice by mistake.

Contact information for customer service ofﬁ ces:

Opening hours *Motor- Motorway Km Town Location Mon-Tue, Wednes- way side Sat-Sun Thu-Fri day M1/M7 9 Budaörs Service area Right 7–19 7–19 8–16 M1 158 Lajta Service area Left 8–16 11–19 – M3 12 Budapest Service area Right 0–24 0–24 0–24 M30 6 Emőd Engineering bureau Left 8–16 11–19 – Hajdú- M35 24 Engineering bureau Right 8–16 11–19 – böszörmény M5 67 Lajosmizse Service area Right 8–16 11–19 – M5 159 Szeged Damjanich u. 28 Left 8–16 11–19 – M6 67 Dunaújváros Market place Left 8–16 11–19 – Árnyas Street, Ár- M60 30 Pécs nyas Liget Residen- Right 8–16 11–19 – tial Park II. 47 Székes- M7 59 Service area Right 8–16 11–19 – fehérvár M7 150 Fonyód Engineering bureau Right 8–16 11–19 – * right side: from Budapest, left side: towards Budapest

Call Centre – telephone customer service

Our “blue” number is a “live” information line that can be called at local rates, Call Centre phone day or night. The headquarters of our Call Centre, located at the Motorway number Engineering Bureau at Kál, employs 16 staff members in a rotation based (local rates apply): shift system and provides public information about current diversions, road +36-40-40-50-60 closures, trafﬁ c conditions, road conditions, and even about motorway tolls

38 Number of emails answered

Year Number of calls 2008 203,397 2009 215,728 2010 205,412

in neighbouring countries. The operation of the call 2220 incoming calls in a single day! – This is centre is supported by an electronic client administra- the record number of calls received by our Call tion system, channelling the calls through a specifi ed Centre. At times of extraordinary events, phone traffi c increases exponentially. menu system. This enables us to make and receive thousands of calls a day. This very central offi ce is directly connected to the Central Dispatch Service.

Incoming calls can be divided into three main categories. Some of the calls concern requests for information on sales and services, while some are about trafﬁ c information and accident reports. The third group of calls consists of those related to inspections and the handling of complaints.

[email protected] – electronic administration Number of complaint letters In addition to phone calls, the Call Centre also hand- Year Number of letters les customer contacts by email at [email protected]. 2008 26,686 One of the key beneﬁ ts of electronic administration 2009 31,660 is that it is much faster than regular mail and more 2010 30,873 convenient and simpler than using the phone.

Complaint management – customer correspondence

Of course SMMC’s customer service also receives regular letters sent by mail. Staff members at the customer correspondence group primarily focus on responding to complaint letters, where 17 employees are responsible for processing and handling of close to 30,000 letters per year. Many believe that complaint letters are a negative aspect of a company, and are something to be ashamed of. What we believe is that these cases provide valuable feedback on what our customers like and what they do not like about us. Complaints show where our internal systems need improvement or what comments and

39 recommendations we should make in connection with the enacting of new laws or the modiﬁ cation of The majority of SMMC’s mail trafﬁ c goes existing legislation. through its customer service. This department alone accounts for approximately one-third of all company correspondence by mail.

On the basis of our experiences and the statistical Number of complaint letters data, most of the customer contacts are related to Year Number of letters camera-based inspections. The fundamental reason 2008 26,686 for this is that these electronic inspections constitute 2009 31,660 the most efﬁ cient way for identifying unlawful road 2010 30,873 users. The largest number of mistakes are made at the time of the purchasing of the e-vignettes, where the underlying problem is usually a simple mistyped character or mistake in license plate data. In order to reduce the frequency of this type of mistake, we continuously train our retail partners as well as our own sales staff to call the attention of customers, in each and every case, to the importance of checking the license plate number at the time of purchase.

EXCELLENCE IN CUSTOMER SERVICE

In October 2010, the customer service staff of SMMC Ltd. received a valuable recognition. In the second annual Ex- cellence in Customer Service contest organised by Client Consulting Kft., our Company won in the Personal Custom- er Service enterprise category and placed second in the Phone Customer Service category. The 20 companies participating in the contest represented various industries of the Hungarian economy: participants included representatives of the sectors of public service, telecommunications, retail, real estate trade, ﬁ nance and even a library. The State Motorway Management Co. Ltd. was unique among them in that it was the only fully state- owned company operating in a well regulated legal environment and having a separate contract that speciﬁ es its service level (even for its customers). As part of this contest, “mystery shoppers” made test purchases and test calls and the organisers prepared customer satisfaction surveys among real customers.

40 Letter addressed to our Company

From: András Kapus To : State Motorway Management Company Ltd.

Dear State Motorway Management Company Ltd, The other day I wanted to transfer my annual motorway vignette to another vehicle. Since I was not fully aware of the necessary steps to follow in order to administer the issue properly, I called your central number, and a polite, prepared and well-informed female colleague of yours advised me, in less than fi ve minutes, on what to do and what I need. When I told her that I might have problems with visiting the customer service offi ce during opening hours, she immediately offered other options. Afterwards it took me fi ve minutes at customer service to arrange the necessary documents, and I could continue with my other business. I was pleased to discover that offi cial issues can be managed this way too. I think that my problem was solved in admirably, in a way that is right for the 21st century, and I could arrange the transfer effectively, simply and quickly. Congratulations! I wish you good luck and that you keep up your great work in the future as well!

Yours sincerely, András Kapus

Administration of ﬁ nes

Driving without valid road-use Data on unauthorised road users are received from the camera systems. Af- authorisation on a toll road ter the computer control system compares the license plate numbers with section qualifi es as unauthorised road use, which results its own database and thereby identifi es unauthorised road users, our col- in a fi ne. leagues visually inspect the photos recorded by the cameras before they make their offi cial decision and impose a fi ne. This manual step is needed because the currently used license plate recognition software is not 100% effective. Therefore, we would like to • ensure that SMMC only sends payment notices to those road users who have been unequivocally identifi ed; • avoid later and more expensive administration of complaints; • avoid the emergence of a negative image of SMMC among the general public.

41 After a visual verifi cation, our colleagues use a software to locate the contact data (name and address) to the case from the central vehicle registration. Under the contract between our Company and the state (the Coordination Centre for Transport Development), we have 60 days after the time of the inspection to mail the letter calling upon the customer to pay the fi ne. If payment is not received within 30 days after the fi rst notice is delivered to the customer, another notice deman- ding the payment of the higher fi ne, as specifi ed in the relevant decree, is then mailed.

Number of excess charge payment notices mailed by SMMC

Year First notice Maximum ﬁ ne notice 2008 198,491 59,930 2009 198,380 53,992 2010 172,938 45,466

If an incorrect car registration The decrease in the number of fi rst notices sent clearly indicates improve- number is registered, the cor- ments in terms of the willingness to pay the toll and the decrease in unau- rect number may be registered at the customer service offi ces thorised road use. The cases of those who do not pay the fi ne even after of SMMC, by changing up to the second notice are forwarded to law fi rms for collection. two digits. SMMC is often criticised for not exercising equitable treatment in certain cases. It is our contract with the Hungarian state that requires us to exer- cise such a strict and consistent policy, which however does not allow us to take aspects of fairness or equity into consideration. At the same time, we also need to keep in mind that this system ultimately contributes to the low rate of unauthorised road usage, which is also low even compared to international fi gures (in European vignette-based systems, the average rate of unauthorised road users is between 1 and 2%).

In the process of assessing ﬁ nes, an important factor is the information on the ownership of the vehicle. This is why it is crucial to deter- mine who the owner (operator) of a vehicle was at the time of the inspection. Transferring the vehicle title is required whenever you sell you vehicle or purchase another one.

42 Motorway communication – widespread information service

The State Motorway Management Co. Ltd. places top priority on informing The Communicati- motorists, road users, residents and the general public. In addition to issu- ons Offi ce employs ing publications, information materials and fl iers, the Communications Offi ce integrated commu- regularly launches large-scale communication campaigns primarily on the is- nication designed to sues of traffi c safety and road use authorisation. In addition, this offi ce main- support the reali- tains and operates the offi cial website of the Company at www.motorway.hu sation of business where all important news and information are displayed immediately and objectives as well as to formulate and made available to the public. preserve the good reputation and uni- form image

The SMMC website was restructured in 2009 to create a more transparent, easier to use interface and present news and information in a structured way.

For the purpose of widespread information service, SMMC has traditionally maintained a good working relationship with the press and journalists. Our company issued 24 press releases in 2009 and 23 in 2010. We also regularly hold press conferences, public press events and gives hundreds of press interviews each year. As a result of efﬁ cient and proactive press activities, an annual average of over 2,000 articles, news stories and reports are published about SMMC in the Hungarian media.

43 An emergency situation developed in 2010: a section of motorway M1 became impassable due to the sudden ﬂ ooding of the Cuha creek. In addition to immediately repairing the damage, the company issued a press release and held an on-site press conference to provide the public with timely information. SMMC Ltd. repaired the extraordinary damage in 2.5 days and, due to its successful crisis communication, the company’s reputation was not tarnished at all.

In addition to external communication, SMMC also employs a number of communication channels to inform its employees. The Intranet hosts a number of professional forums and a news column for employee related developments. “Pályán Vagyunk”, the Company’s internal magazine, is published bimonthly and electronic newsletters are sent out on a regular basis.

Trafﬁ c safety

A special eye camera test has Our Company registers and evaluates all motorway incidents on a continu- shown that only 20% of all ous basis. In terms of the statistical measurements most commonly used motorists pay attention to all traffi c signs. in the fi eld of traffi c safety, as well as our own collected data, we can clearly state that the motorway is the safest of all road categories. However, if a motorway accident does occur, it tends to be more severe as the average vehicle speed is signifi cantly higher than in other cases.

The risk of accidents is three times lower on motorways than on any other type of road in the Hungarian national network.

44 “Despite all its beauties, use and comfort, traffi c is József Óberling, dangerous. To ensure that driving remains a positive police colonel, experience, we need law abiding motorists and a high Head of the quality, properly operated road network. As we our- National Police selves use motorways, I can speak from experience Department’s Traffi c Directorate: that the expressway network operated by SMMC Ltd. meets those high expectations and that the Compa- ny’s employees responsible for traffi c safety do their best to prevent accidents. The rest depends on us as road users.”

Weighted relative accident index in the Weighted relative accident index in the Statistical data of past years indicate expressway network operated by SMMC Ltd. expressway network operated by SMMC that between 2008 and 2010, despite (number of accidents with personal injuries Ltd., weighted accident for 1 million per 1 million vehicle-kilometres) vehicle kilometres (weighted numbers: the expansion of the road network, Fatal=130, Severe=70, Light=5, Involving the number of accidents resulting in property damage=1) 0,08 2,5 personal injury has dropped on the 0,07 roads operated by SMMC Ltd. Not- 2,0 0,06 withstanding the measures taken to 0,05 1,5 0,04 improve trafﬁ c safety, our general ex- 1,0 0,03 perience shows that Hungarian driv- 0,02 0,5 0,01 ing culture is slow to develop. Even 0,00 0,0 though severe accidents are publi- 2008 2009 2010 2008 2009 2010 cised more frequently, motorists still frequently disregard the law and there are many cases involving reckless driving. These causes are primarily responsible for a slight increase in the number of fatal accidents. In addition to speeding, rear-ending and falling asleep, new accident types have appeared on the Hungarian expressway network, including hitting pedestrians (statistically these are all are persons who were outside the vehicle at the time of the accident for any reason, e.g. repairing their vehicle) and head-on collisions on 2x1 lane sections, which have greatly contributed to the rise in the number of fatal accidents.

In accordance with its practice established over the past years, the State Motorway Management Company Ltd. will continue to do its utmost in the future as well to reduce the number and severity of traffi c accidents and to contribute to a change for the better in Hungarian driving culture. In order to achieve our goals, the Company formed a separate Traffi c Safety Group in 2005. To avoid repetitions, you will fi nd descriptions of the key traffi c safety systems such as VMS’s, the alarm system of the Kőröshegy Viaduct and the automatic incident recognition system in the chapter entitled Motorway electronics.

45 Measures to increase trafﬁ c safety

Increasing the safety of express roads

Unfortunately, even the road network that we operate has some road sections considered high accident risk sections based on the statistical data of the previous years. These include express road M2, managed by the State Motorway Management Company Ltd. since 1 January 2009. In order to increase traffi c safety, we developed an action plan in cooperation with the police and installed custom-made warning signs at high accident risk locations and yellow fl uorescent signs in both directions to warn motorists about oncoming traffi c where applicable. We also reviewed road sections where overtaking is prohibited, and installed a number of traffi c safety billboards along these roads.

In the autumn of 2009, for the ﬁ rst time in Hungary, we began using a double continuous white line with a painted red strip between them, in order to reduce the number of crossings of the continuous white line and the number of head-on collisions. This new method has proven successful as it has reduced accidents by 30%.

Following the opening of the east sector of express road M0, traffi c became heavier in the south sector. In spite of all this, we were able to improve our accident indicators there in 2009: the number of accidents resulting in material damage was reduced by half from 510 to 256. A crucial factor in suc- cess was increased police presence in the area. Another important development was that in January 2009, we installed fi xed speed cameras at fi ve locations.

46 The area around the 28.8 km section of the south sector of M0 (the Soroksár terminal junctions) continued to be a high accident section. To reduce accidents due to changing lanes on the left (M1/M7 bound) side of the motorway, we installed custom-made signs, a double continuous white line and a set of light-emitting prisms.

Protection for solid obstacles

Motorists often leave the road surface or smash against our structures due to high speed and careless driving. Our Company continuously increases protection for noise protection walls, public lighting columns and valuable tree lines and installs trafﬁ c signs imposing more stringent restrictions near these structures.

Keeping a safe following distance

25% of all fatal accidents are caused by rear-end collisions. These are typical for road sections with heavy trafﬁ c when there is a collision in the column of vehicles due to an unexpected manoeuvre, as well as on low-trafﬁ c sections where an incorrect estimation of distance due to high speed differences causes accidents. To prevent these rear-end collisions, we have painted road markings (a line of arrows) at a number of locations to warn motorists of the safe following distance. In addition, we also launched a billboard campaign to urge motorists to keep the right distance between vehicles.

Maintain a 2-second following distance!

Congestion signs

Road sections with heavy trafﬁ c may experience congestion in the event of trafﬁ c diversions or accidents. In such cases, the vehicles at the end of

47 the line in the congested area are We hope to re- at great accident risk without know- duce the number ing it or willingly contributing to it. To of rear-end colli- reduce the number of rear-end col- sions with con- lisions, we have installed yellow ﬂ u- gestion signs. orescent signs warning motorists about possible congestions.

Improving seat belt use rates

Safety on Hungarian public roads is compromised primarily by to the severity of road accidents. Analyses uncovered a number of causes, including the fact that many persons travelling in passenger cars fail to use their safety belts, despite being obliged to do so under Hungarian law. According to an expert study ordered by SMMC Ltd., a large number of the fatal accidents on motorways could most probably have been prevented by Only 20% of the victims of the use of the seat belt. In 2010, our Company’s trafﬁ c safety experts deci- fatal accidents were wearing their seat belts at the time of ded to launch a new type of billboard campaign based on deterrence re- the impact. garding safety belt use, which they hoped would better resonate with the target group.

Deterring billboard: In Hungary, most people fasten their seatbelts on motorways, but the national average is still far below the international average.

48 THE ENEMY OF ROAD SURFACE WATER: GROOVE CUTTING

Groove cutting is a little-known phenomenon that plays an important part in trafﬁ c safety. In areas where the road’s longitudinal inclination is negligible or the side inclination changes, water may leave the surface at a slower rate during heavy rains. Water collected on the road surface may throw the car or cause aquaplaning, i.e. skidding on water, especially if the quality of the tyres is inadequate. Aquaplaning occurs when the tyres running at high speed cannot force water from their grooves. If the treads in the tyre cannot splash the water backwards and sideways, the tyre runs on a water layer, losing its grip on the road and begins to skid on the water. This can even result in a loss of control of the vehicle. To avoid such situations, our staff members made groove cuts at approximately 10 locations in 2010. Essentially, 15 pairs of cutting discs make grooves 8mm deep running at a 60° angle to the length of the road. These grooves help maintain physical contact between the road and the tyres.

Rumbling optics to prevent drivers from falling asleep

Long, monotonous hours of driving on motorways, especially among professional drivers, unfortunately often results in accidents when the driver falls asleep. In order to reduce accidents due to falling asleep, we have replaced the optical markings between the hard shoulder and the right trafﬁ c lane with ‘rumbling optics’ on our motorways over the past years. Experience has shown that the strong audible effects of the ‘rumbling’ markings call the driver’s attention to the fact that the vehicle is about to leave the trafﬁ c lane. If this restores the driver’s attention, there is still time to correct the vehicle’s direction.

The number of accidents has dropped by 40% on motorway sections equipped with rumbling optics.

49 5 IMPORTANT TRAFFIC SAFETY RULES: Avoid the situations that cause the most accidents!

1. Speeding: The speed limit for passenger cars in Hungary is 130 km/h on motorways and 110 km/h on express roads. These speed limits for lorries are 80 km/h and 70 km/h, respectively, unless otherwise indicated by a speed limit sign. Rear- end collisions are often the result of speeding and not allowing enough distance between vehicles. Always follow the speed limit. 2. Staying on the hard shoulder: No vehicles may stop or park on the hard shoulder on motorways. If you are forced to stop due to some technical problem, always use your emergency warning lights, wear a visibility vest, set up the warning triangle and move with your passengers behind the crash barrier as soon as possible. Statistically, people staying on the hard shoulder survive only for a period of 20 minutes on average. 3. Head-on collisions: Overtaking is one of the most dangerous manoeuvres on the road. Do not start overtaking unless you have made sure that the road ahead of you is clearly visible for an appropriate distance, there is no oncoming trafﬁ c, and no other nearby vehicle has started overtaking. A bad estimation of speed and distance may have fatal consequences! 4. Maintain a safe distance between vehicles: Always keep a distance between your vehicle and the vehicle in front of you that gives you enough room to stop your car if the vehicle in front suddenly brakes. HGV’s are expected to maintain a following distance between one another that allows at least one passenger car to return to the lane safely after overtaking the truck behind. 5. Not driving in accordance with weather conditions: Wet road surface, fog, snowy, slippery roads all require increased attention and a different driving style. Always take into account current weather conditions and choose your speed and following distance accordingly.

Those who see it all – motorway dispatch service

Before you start your trip, it is always worth checking whether there is any traffi c restriction, blocking or congestion along your route. Operators working at the company headquarters and the engineering bureaus provide round- the-clock traffi c news to travellers via the Internet, through the variable message signs (VMS) built into the motorway network and through regional radio stations. In addition, they readily provide information over the phone about other questions related to road use. Key information provided by the dispatch service: traffi c conditions on motorways, diversions in force, lane closures, congestion, accident-related traffi c situations, events affecting traffi c on

50 the motorways, border crossing traffi c and crossing times, road conditions, weather and visibility condition, fresh snow layer in the winter season, working machines, snow barriers, blizzards and blocked roads. Dispatchers are in continuous contact with the associates of the Traffi c Information Service (Útinform), the Na- tional Meteorological Service, and the media (various radio and television stations). In addition to traffi c information, they provide assistance to those needing technical recovery services. In the event of an accident, they notify the ambulance service, the police, the fi re department, the disaster relief authority and other authorities and organisations as necessary.

Thanks to its state-of-the-art technical system, SMMC’s dispatch service can provide real-time information about the trafﬁ c conditions of the road network it operates.

Our dispatchers watch the road network nonstop and thus they are the ﬁ rst to be informed about events on motorways.

When accidents happen – facilitating accident recovery

As a result of the cooperation between the Hungarian National Ambulance and Emergency Service and the State Motorway Management Company, on selected sections of the Hungarian expressway network, ambulance motorcycles operate in the summer season. This new service integrates well into the emergency service system, as it provides a means for reaching accident victims in the fastest possible way. Ambulance motorcycles can make a difference when other ambulance units cannot get to the accident scene on a motorway or can not get there fast enough. These motorcycle ambulance units are located at a number of sites in the country with two bases at the Motorway Engineering Bureaus at Szigetszent- miklós and Gödöllő. As part of this cooperation, SMMC Ltd. provides the motorcycle ambulance service with a medical room, a computer and Inter- net access.

51 Due to their short response times, motorcycle ambulance units increase survival rates by 50-60% in accidents when resuscitation is required.

“Between April and October we maintain a 12-hour on- call duty at the SMMC engineering bureaus and we are the fastest within a 50km radius. We have established a very good working relationship with the staff members at the engineering bureaus. Everyone focuses on the mission and we help each other in every way we can. Between Zoltán Varsányi – May and October 2010, we responded to 649 emergency paramedic, Hun- calls, the majority of them (201 calls) in Gödöllő. I am re- garian Nation- al Ambulance ally glad that the largest motorway operating company of and Emergency the country has recognised the need for motorcycle ambu- Service: lance units and has provided support for us basically from the very beginning. I hope we can increase the number of motorcycle ambulance sites in the future.’

Planned trafﬁ c safety measures

In 2011 SMMC Ltd. plans to continue its installation of the ‘forgiving environment’ with roads and their ﬁ xtures designed to mitigate the severity of accidents caused by driver errors. One of the most common accident types on expressways is driving off the road, in which a vehicle departs from its lane or collides with a roadside ﬁ x- ture. Causes include inappropriate choice of speed, relative speeding, neg- ligence, falling asleep and sudden movements of the steering wheel. To prevent these accidents, we install crash barriers at locations otherwise not

52 required by law and, wherever needed, we increase their height or reinforce them. Over the past years, we have started a traffi c safety review of trees and tree lines along the roads. Wherever the Company evaluated the locations of trees and tree lines near the roads as accident risks, they were removed or protected with crash barriers. We will continue this project in 2011 as well. Although very rare, entering the motorway on the wrong access ramp, i.e. from the wrong (opposite) direction, may have severe consequences. These drivers typically lose their self-control or enter the motorway on the wrong side on purpose and thereby risk the lives of innocent road users. The traffi c safety professionals at SMMC are now working on a new concept that involves repeated no entry signs and fl uorescent warning signs to minimise the number of cases when motorists enter on the wrong side unintentionally. The lack of physical separation on 2 by 1 lane express roads typically combined with high speed has caused fatal head-on collisions over the past years. Speed limits and restrictions on overtaking at these high-risk road sections are currently being reviewed and we are also examining the option for physical or optical separation of the two driving directions. In 2011, the most concentrated traffi c safety review will be carried out on express road M70. In addition to technical measures, our Company also places great importance on prevention, as well as widespread awareness and information measures. In 2011 we plan to carry out two high-profi le traffi c safety promo-

Survival time on the hard shoulder of motorways is only 20 minutes on average!

53 tions accompanied by a communication campaign. The two national campaigns are designed to reduce the number of accidents on the hard shoulder and the number of rear-end collisions. Both types of accidents occur because of non-compliance with or disregard for the applicable trafﬁ c codes and reckless driving. As a result, integrated communication and marketing tools can help make these campaigns successful.

Electronic devices along the motorways

While in earlier times we listened to the weather forecast on the radio, or per- haps looked up at the sky when trying to fi nd out what road conditions we could expect, and we made calculations using our heads when trying to fi nd out how heavy the traffi c there would be on the roads that Friday afternoon, today we have much more modern tools for the same. The supporting of motorway operations with electronic tools is actually a mixture of diverse activities, the joint common purpose of which is to ensure safe and civilised transport at all times on the roads managed by our Company, taking weather, traffi c, and other conditions into consideration. The work of motorway operators and travellers is supported by a number of high quality electronic systems monitored by our staff 24 hours a day.

The internal artifi cial Traffi c control system – the integrator intelligence of the traffi c of road operation support electronic systems control system can alert the operator and recom- The Traffi c Control and Information Centre partially or fully automates detec- mend specifi c actions tion of motorway incidents and the related interventions. (e.g. messages displayed The system uses a self-learning principle, which means that it can be taught on VMS’s, sending a text message, information using an intelligent module. It can add a new strategy to the ones already displayed on the website, used and select the most appropriate strategy from those available. It also etc.) after receiving data monitors cases when the operator rejected a recommended strategy and ex- from the detection units. ecuted a different one. In addition, the system can monitor tendencies and thereby provide advance warnings about certain potentially risky situations.

54 Our employees can see virtually everything: Our colleagues decide when to inform the the electronic trafﬁ c counter detectors installed public and implement anti-skid surface inter- in the road surface and the continuous ventions based on the data received from me- operation video cameras provide our teorological stations. monitoring staff with real-time information.

Electronic system Units VMS signs 190 Meteorological stations 124

Trafﬁ c counter stations 174

Video cameras 310

Emergency stations 868

The objective of SMMC’s Trafﬁ c Control and Information Centre is to increase automation and reduce the number of live operators. The integrated graphical user interface of the system allows control of basically the entire motorway operation support electronic system of SMMC from any of our sites and also to display information received from the ﬁ eld.

55 Automatic trafﬁ c counter stations

Traffi c counter devices provide the road operating company with basic data SMMC Ltd. operates that enables the optimal phasing of maintenance works, the retrieval of va- 58 web cameras rious statistical traffi c assessments, and control over the traffi c control sys- whose images are tems. publicly acces- SMMC Ltd. has improved these stations to enable remote troubleshooting, sible. Before you which not only makes our work more effi cient, but is also very cost-effective. start your trip, it is worth checking them out at www.motorway.hu.

Trafﬁ c monitoring cameras

The various traffi c situations are monitored and analysed by our engineers and dispatchers using video cameras in order to properly plan the required measures. The closed-circuit video system facilitates rapid detection of accidents and traffi c jams, and the detection of the causes of traffi c congestions. An advanced version of the video systems is the automatic incident detection (AID) system consisting of 51 units in our network. Due to its artifi cial intelligence, the system automatically detects congestion, driving in the wrong direction or on the hard shoulder, vehicles stopping or any foreign object on the motorway.

The automatic incident detection system is unequivocally a great asset in improving trafﬁ c safety.

56 DATA PROTECTION – Video monitoring on motorways

SMMC’s camera systems were designed and deployed in compliance with the statement and under the supervision of Hungary’s data protection commissioner. The systems are closed in terms of data protection and work only on the appropriate authorisation, responsibility and regulatory level. The data protection commissioner has inspected the trafﬁ c monitoring system and concluded that “(...)no privacy data are handled during the recording, storage and transmission of camera images(...)”

Emergency telephone system

As mobile phones have become ubiquitous and vehicles become more modern, a long queue at the emergency phone would be a rare sight in- deed. Nonetheless, these devices continue to be an important means of communication serving the safety of motorway users. This system provides a direct connection to the operator service overseeing the section in the event of an accident, mechanical breakdown, or other circumstances hazardous to transport safety.

VMS’s and meteorological stations – factors supporting safe travel

Providing accurate information to travellers in due time can prevent accidents, while the maintenance of the road surface in an appropriate state is a basic requirement in all weather conditions. However, these information systems require measuring devices capable of providing continuous accurate motorway information in a completely automatic manner, without any human intervention. It was with attention to the above requirements that we established the meteorological stations along the motorways, thanks to which our staff involved in operations can always receive reliable and up-to-the-minute information about the condition of the road surface, as well as the most important meteorological parameters characterising the specifi c area. Measured data speed up and facilitate the decision-making process of road operators, while their use results in signifi cant fi nancial savings, and effectively contributes to the protection of the environment.

57 VMS’s, i.e. variable message signs are of great assistance to motorists.

Lorry parking area monitoring system

The parking area monitoring system is designed to ensure balanced utilisa- Lorry drivers have no information about where along the tion of the service areas along motorway M1 affected by serious transit traf- Hungarian motorways they ﬁ c. Quite frequently, the problem is that while certain parking areas run out of can spend their mandatory parking capacity, some other nearby areas have unused capacity. rest period and what services the place has to offer. More As part of the project, a parking area monitoring camera system is used at often than not, they stop at a the Arrabona service area at the 119 km section of motorway M1, which sys- certain location out of habit tem can see the whole vehicle parking area and determines its occupancy or because they have to, sometimes even in violation rate as well as the number of parking places still available. of the rules.

Lorry drivers are informed about the number of empty parking spaces by a dynamic display sign 15 km ahead.

58 Expected travel time display system

Congestions of even over 10 km in length are quite frequent on express road M0. This is particularly true for the south section, where 2x2 lanes serve the heavy volume of trafﬁ c without an emergency lane. The expected travel time display system (VUK) calculates the average travel time from actual vehicle data and informs motorists whether taking M0 is worthwhile or whether they are advised to take alternate routes. The VUK system works on the east and north section of M0 where the system calculates travel time from the average speed data provided by the traf- ﬁ c counter stations along the express road. The system can display these values on any of the many VMS portals installed along M0.

The system uses the average speed measured by the trafﬁ c counter stations of express road M0 to calculate the expected travel time. If the average speed reaches a critical low value, the message CONGESTION appears on the display instead of the time value.

Electronics of the future

SMMC Ltd. is committed to creating conditions for safe trafﬁ c and to continuously maintaining the high level of its services. Accordingly, we make a conscious effort to deploy technologies that increase trafﬁ c safety and the level of services provided to our customers.

59 The systems currently used already reduce the period from the time of an accident or the beginning of a severe congestion and the time it is detected. As a result, we can warn motorists about the risk of accident, instruct them to reduce their speed or even recommend a detour. SMMC Ltd. intends to continue in its pioneering role in domestic road operation and thus plans to employ a number of intelligent transportation systems (ITS) and services in its network. We would not be able to achieve all this on our own. However, the European Union has provided funding to establish a unifi ed trans-European transport network (TEN-T) with the same technical and service quality level. To accomplish this objective, the EU has launched fi rst CONNECT, then EA- SYWAY - two euroregional (international) projects in which SMMC Ltd. takes part as well. Our Company hopes that the project will continue and that we can continue to participate in it, and have accordingly already set our project goals for the coming years. We plan to improve the information systems of M2 and M4, improve the traffi c control system on M3, expand the parking area control system of M1 and improve the SMMC website.

More than just a workplace

One of the key elements of SMMC’s corporate philosophy is respect, appre- ciation and recognition of its employees. The business and economic suc- cess of a company greatly depends on its corporate culture and the attitude

SMMC staff are on duty at the 15 engineering bureaus of the country 24 hours a day, 7 days a week. They control, operate and maintain an expressway network of over 1,300 km in length, they are out on the motorway in the scorching summer heat and in the freezing cold of the winter to ensure that motorists can travel fast, safe and under top quality conditions.

60 of its employees. This is particularly true in cases where employees carry ex- There has not been tremely high responsibility, where operation never stops and where the same a single case of quality of work is expected even under extreme weather conditions. negative discrimi- nation at SMMC Ltd. This is why our Company strives to make work conditions pleasant and fa- and we do eve- mily-like for its employees, and offers both moral and ﬁ nancial recognition rything we can to keep it that way. for employee efﬁ ciency and loyalty to the company. We would like to comply with the spirit and expectations of a modern company while maintaining our old, “public road” traditions.

Employees

SMMC Ltd. employs approximately 1,000 persons. Over the past years our workforce has shrunk even though our responsibilities and the total length of the expressway network have increased.

Diversity and equal opportunities

When recruiting, and in its relations with current employees, SMMC Ltd. is an equal opportunity employer in all respects. Our company has adopted an Equal Opportunity Plan, which includes the basic principles of equal opportunities, the objectives, tools and measures necessary for achieving these objectives, as well as an analysis of the employment situation and the measures to be used in the event of a violation of the requirements of equal treatment.

The number of SMMC employees, broken down by gender

1200

1000

800

600

400

200 2008 2009 2010 Headcount Men Women

61 Due to the nature of the activities we perform, the majority of our employees are men. Most of those working at our engineering bureaus perform tasks related to road inspection, road operation, maintenance, mechanical engineering and assembly. As a result, the overrepresentation of men is most visible among our physical workforce where women make up less than 5% of the team on average. Nonetheless, every single engineering bureau has female employees working in business and administrative positions.

Safe and healthy work environment

SMMC Ltd. strives to create a safe and healthy working environment at all its sites and workstations. Our employees receive regular trainings on fi re safety, occupational health and safety that are concluded with an exam. Each of our site has a fi rst-aid station equipped with a defi brillator device. These fi rst-aid stations are located in the dispatch service rooms because our colleagues are on duty there and available 24/7 due to their nonstop work shifts. In order to facilitate fast and professional intervention, our dispatchers participate in fi rst- aid trainings. In certain jobs, special work clothes and personal protective gear are required and provided to all affected employees. Employees subjected to increased

WHY IS THERE SUCH A LONG DIVERSION ON THE MOTORWAY?

Many motorists ask why the road operator closes down a lane for a section of several km long when - for example - the hedge is only being cut in the middle of the closed section or the repair work on the hard shoulder is only being carried out for a stretch of a few metres. All these measures serve the safety of the people working there. Due to the high speed of vehicles passing by on the motorway, the speciﬁ c lane needs to be closed down hundreds of meters ahead of the actual location of the works to ensure the safety and physical health of road inspectors and road operators working there. In all those, cases speed reduction is mandatory and temporary speed limit signs are installed well ahead. Our colleagues work only a few metres from the cars passing them at high speed and it only takes a single wrong move or a second of distraction (from the worker or the driver) for a collision to occur. In order to avoid such occupational accidents, our engineers responsible for trafﬁ c control develop and deploy new technologies and methods (location and distance of signs, direction of diversion arrows, light signals, etc.).

62 levels of health risks (tick bites, risk of infection) receive inoculations. We also have a pandemic plan in place in case an epidemic breaks out.

Motorways are hazardous places. Employees working on the motorway are exposed to the greatest risk because even though appropriate diversions, signs, speed limits and light signals are employed, some careless drivers may drive into the SMMC work area, which - at high speeds - may result in serious accidents.

Motorway Academy – SMMC’s training system

In order to increase our efﬁ ciency, SMMC Ltd. provides regular training for its employees to ensure that they use their knowledge and skills in their jobs in the most appropriate way. There is an increasing need among both managers and their team members for professional development and updating skills that can later be used to expand their work related activities.

Our special machinery may be used only by those who regularly take part in the related training. The theoreti- cal and practical training is concluded with an exam.

63 In order to implement our strategic objectives, we improved the SMMC training system and regulation in 2008 and have been using it successfully ever since. Our primary aim is the development of individual capabilities and skills in accordance with the demands of each of our employees, by providing a more ﬂ exible, individualised and efﬁ cient effective system of training. The supported forms of staff development include professional training required for the given position, further education with the purpose of expanding the scope of professional knowledge, conferences, skill- and abilities development trainings, IT and language classes. Our Company provides an opportunity for employees to participate in state approved higher education programs by signing an education agreement.

Beneﬁ ts and recognition

The State Motorway Management Co. Ltd. provides competitive salaries around the average for the sector and benefi t packages proportional to the tasks performed. Our system of remunerations consists of the basic salary and fringe benefi ts. Fringe benefi ts change from year to year, depending on SMMC’s economic situation. On the basis of the principle of equal opportunity, SMMC pays the same salary for the same performance. Each employee is entitled to a key staff reward depending on the length of time with the Company, after 5, 10, 15 and 20 years. Employees are also entitled to the ‘For Public Roads Service’ award after 25, 30, 35 and 40 years with the Company and its legal predecessors.

SMMC Ltd. rewards loyalty: after an employment period of 5 years, the employee automatically becomes a key staff member and is rewarded.

After working hours

Despite the large workforce and the great distances between its sites, the State Motorway Management Ltd. is a family-like and family-friendly workplace where employees like to spend their leisure time together.

64 SMMC employees at sporting events and get-togethers with family and friends:

A sporty company: The SMMC team successfully completed the Mara- thon distance at the 25th Budapest International Marathon and Running Festival.

The SMMC’s women’s team won ﬁ rst place in the 11th National Pub- lic Road Small Team Football Cham- pionship.

SMMC ﬁ shermen hold an annual competition at Örspuszta to measure their skills – and their catches. The ﬁ shing competition is of course fol- lowed by a cooking contest.

65 The Sports Day in September is an old tradition where hundreds of our employees compete individually or in teams in traditional and newer sports.

Children are active participants in the life of SMMC. On Children’s Day, the Dunakeszi and the Hajdúböszörmény Engineer Bureaus organise their own events for the families of SMMC employees.

High-performing employees recognised at the year’s-end celebration.

Sponsoring and donations

As a responsible company, the State Motorway Management Co. Ltd. places high importance on sponsoring non-proﬁ t organisations and foundations that provide beneﬁ cial public-interest services. Our company has provided the following public-interest donations to foundations and state organisations:

66 Value of grants provided by SMMC Ltd. (thousand HUF)

2008 2009 2010 Asset value 0 150 50 Money grants 68,457 8,533 5,060 Total: 68,457 8,683 5,110

The amount of grants in 2008 was especially high because SMMC Ltd. pro- As a state- owned vided signifi cant fi nancial and material funding to the police and to municipali- company, we ties along express road M0. always make sure In 2008, our Company provided the National Accident Prevention Department that the available of the National Police Department with 2 speed cameras and 5 installation budget amount is boxes in the amount of HUF 23 million. In 2009, we provided schools and spent for the right foundations in need with IT equipment in the amount of HUF 644,000. place and for the In 2009, we sponsored a number of organisations to improve and popularise right purpose. traffi c safety: GRSP Hungarian Association (HUF 4 million) and the Hungari- an Automobile Association (HUF 1 million) for their campaign “Drive Safe for a Lifetime”. SMMC Ltd. sponsored a high-profi le non-profi t organisation (Tech- nical and Scientifi c Society) with a grant of HUF 2 million. On 4 October 2010, the most devastating industrial disaster in the history of Hungary happened when the wall of the red sludge storage reservoir in Ajka broke. The State Motorway Management Co. Ltd. offered a grant of HUF 5 million to disaster victims and paid to the bank account of the Hungarian Disas- ter Recovery Fund. The motorways we manage provide the fastest means of travel in Hungary between remote points in the country. The majority of these road sections, however, may only be used with the appropriate road use authorisation, i.e. by purchasing the e-vignette. There are many, however, who cannot afford to do so although they have to receive medical treatment at locations far away from their homes on a regular basis. As the majority of these people in need have a medical condition, the fastest and most secure - and in certain cases the only - option to get to the healthcare facilities is by car. In these cases, our Compa- ny, out of equity considerations, allows them to use these road sections free of charge.

67 68 CORPORATE ENVIRONMENTAL RESPONSIBILITY

Environmental protection

aintaining a liveable environment and protecting the existing environ M mental and natural values is becoming increasingly important. Many believe that motorways are not really environmentally-friendly installations. However, if you consider the increase in the volume of transit goods and personal trafﬁ c, everyone would prefer to have such vehicles use our motorways and not the roads passing through our towns and villages. The same applies to those who want to cover great distances by car in a fast, economical and safe way. For this very reason, expressways are now criss-crossing all of Hungary We need to keep in mind that and the State Motorway Management Co. Ltd. is responsible for the main- SMMC Ltd. takes delivery of tenance and operation of a network of 1,300 km in length. Our company the motorways and express roads in a ready state and manages and protects this vast network with maximum attention given to thus can only perform envi- environmental concerns and the protection of wildlife habitats. Of course an ronmental protection functi- operating motorway directly impacts its environment, wildlife, the air quality, ons only in the management phase. quality of surface and underground water quality as well as noise load and the generation of various types of waste. In compliance with the requirements of authorities, SMMC Ltd. regularly performs environmental and wildlife monitoring tests to continuously monitor the environmental impacts of the motorways in operation. In the monitoring report we evaluate the examinations related to air pollution, noise pollution, pollution of surface and underground water, and ob- servations related to the protection of wildlife. Based on the results, we take further actions for the protection of our environment, if necessary. Under normal operating conditions, motorways do not create signiﬁ cant environmental pollution. Operating experience so far has demonstrated that the limit values required by the authorities are exceeded only in terms of

69 noise, which we always try to solve in each and every single case. (We will provide details when describing the various areas.) In some accidents and emergency situations, hazardous materials may be released into the environment. In this cases damage control is carried out by a contracted partner with the competent engineering bureau. If the type and concentration of the pollution requires, the competent Directorate for Disaster Management and the Environmental Inspectorate. To be prepared to manage such cases as fast and as expertly as possible, we organise biannual disaster control practices.

Nature protection

Protecting the natural environment is in the interest of all of us. Consequently, the environment is an increasingly important factor when building and operating motorways. The engineers are doing their best to plan the routes of newly constructed and still-to-be-built motorways in such a way that they do not even come close to protected wildlife and Natura 2000 areas. Where this was not possible, we use animal overpasses and underpasses, as well as bird protection walls and other methods to minimise our impact on wildlife. Of the existing expressway network, 165 km are bordered by Natura 2000 areas, and of this length, approximately 15km are also the boundaries of nature conservation areas. These areas are primarily located along the old sections of the old motorways such as M3 at Gödöllő and M1 in the Tata/Tatabánya area. Environmental protection includes the protection of man, as a natural crea- ture. This is ensured by the protective fence installed over the past years designed to prevent wild animals and wandering pets from ﬁ nding their way to the motorway. Environmental protection also means mowing and spraying the green areas of the motorway with herbicides (against ragweed and other allergenic weeds).

LIFE NEAR MOTORWAYS The areas near motorways are typically rich in wildlife. Therefore, it is important for SMMC Ltd. to preserve biodiversity. Accordingly, we carry out our operating tasks with special attention. As the slopes of motorways form an enclosed, untroubled area, a number of protected plant and animal species have ‘moved’ there. Along motorway M7, for instance, the protected marsh tortoises found favourable conditions to lay their eggs. Fortunately, when the eggs hatch, the baby tortoises follow their instincts towards the water and thus avoid the motorway.

70 The protected crowfoot butterfl y only lives off of the bladder senna plant, whose natural habitat has been reduced signifi cantly over the past years. In order to maintain the biological cycle, we have planted such shrubs at the Kőröshegy section of Motorway M7 to provide the butterfl ies with their food and thereby increase their numbers.

Planting

You can see a number of planted forest belts and densely plated areas along A number of protec- the motorways. Plants play crucial and multiple functions along express roads. ted plant species First of all, the green cover attempts to create a more natural scenery, but also such as adonis and serves to reduce traffi c noise, dirt and exhaust gas emission and - last but not feather grass like least - satisfy certain aesthetic considerations. to ‘move’ to the The authorities always prefer planting indigenous species. However, the built slopes because environment is often unsuitable for the planting of these species. Decades of their natural habitat experience have shown us that fast-growing, hardy plants able to endure ex- has been taken over by residential or cessive environmental conditions are the best for planting along motorways. industrial parks. Those indigenous species that can endure this special microclimate should be preferred when designing the landscape along the motorways. In addition to the planted vegetation, very often we fi nd that the tree and shrub species of the surrounding area ‘migrate’ to occupy the slopes of motorways (aspen, acacia, elder, etc.). When building the parks of service areas, we specifi cally try to avoid planting shrubs and trees that are allergenic, produce lots of waste with its fl ower or crop and that are thorny. We prefer fast growing, indigenous plants providing large shades. While there is an expectation to plant a diverse fl ora along the motorways, ageing plants in the separator lanes are now being replaced with plastic, anti- glare net to increase traffi c safety.

71 Animal passageways

Wild animals, regardless of the speciﬁ c species, habitat or food supply, can Persons using tractors, cover an area of several square kilometres in a single day. The infrastructural off-road vehicles or quads network (road, railroad, etc.), however, creates a virtually impassable obstacle in the animal passageways between the feeding and breeding sites on the two sides. As a result, various despite the prohibitions to this effect will scare the animal passageways are built into motorways (for amphibian animals, reptiles, animals from using them. small mammals, wild animals) to ensure the passage of animals from one side of the road to the next.

Our Company regularly inspects the effectiveness of animal passageways. Our experience shows that big game passages are mainly used by smaller animals (dogs, foxes) and by humans. Large wild animals are, by nature, very suspicious and have difﬁ culty adjusting to changes. In addition, the paths leading to the passages are too open, the planted vegetation takes time to grow and often the location of the passageways are not ideal. As animal passageways are not built by SMMC but by the motorway developer, our Compa- ny can only operate the ﬁ nished facilities.

Beaver tracks were found at the animal passageway at express road M70 and golden jackal tracks were found at a number of passageways of motorway M7.

72 Reptiles and amphibians require a different type Maintenance of the animal passageways and of passageways: these are “pipes” 2 m in dia- the paths leading up to them is the responsi- meter running under the motorway. Unfortunate- bility of the competent hunters’ association. ly, experience shows that the target species do not use them. The reasons are many: the pipes are very long (26-40 m), which presents an im- Types of animal passable distance for a frog, for instance. In ad- Units passageways dition, there is a strong draft in the pipe, which Big game passages 43 animals do not like and the majority of amphib- Ecological passages 213 ians tend to ﬁ nd a suitable habitat for feeding and breeding in the water drainage ditches of Total: 256 the motorway.

Protective fence

Motorways are lined by a protective fence in their full length to prevent animals from wandering onto the road. The fence fulﬁ ls a dual purpose: it protects animals from wandering onto the road and it also protects motorists from a severe accident likely to be caused by a roadkill.

Unfortunately, In order to reduce the the access of likelihood of animals wild animals ﬁ nding their way onto to motorways the motorway, our road cannot be comp- inspectors check the letely restricted, condition of the protec- as we cannot tive fence twice eve- seal off road ry day. access at ramps and exits.

73 We have installed bird protection walls along the main passages of birds to reduce the number of roadkill accidents. These fences are made from wire with a specifi c mesh size and from wood. A number of motorways have fi breglass walls with shadows of birds of prey painted on them. These paintings are specifi cally designed to scare away small and mid-sized songbirds and keep them away from the road. Every year, hundreds of dogs wander out onto our motorways. Most of them get on the road by walking across junctions but many of them are simply thrown out of cars or are intentionally left at parking lots by their irresponsible owners who want to get rid of them. This kind of behaviour not only seals the fate of these poor animals but can also lead to serious accidents. In order to protect these aban- doned pets and reduce the risks of accidents, we contact animal shelters to col- lect any strays.

Sometimes pets wander out onto the motorway. We have a special road sign installed near Érd to warn motorists about this danger.

In spite of the protective fences and animal passages, and although there is a downward trend in such cases, pets and wild animals killed by cars remains a serious issue on our motorways. As the number of roadkill accidents involving larger wild animals is still high and actually collision with wild boars have risen by close to 40% over the past years, SMMC Ltd. has launched a campaign to keep wild and domestic animals away from motorways.

74 Number of roadkill accidents:

Species 2007-2008 2009-2010 Roe-deer 152 150 Wild boar 43 60 Red deer 52 Badger 199 230 Fox 1483 1272 Dog 785 642 Cat 1464 1117 Otter 27 23 Owl 276 366 Diurnal birds of prey 137 185 Total: 4571 4047

Deterrents for wild animals

In order to protect motorists and wild animals, our Company launched a re- The currently search project in 2009 to test various wild animal deterrent products and used wild animal equipment but also explored the area surrounding animal passageways and deterrents are not frequent roadkill spots to ﬁ nd a more successful protection measure. The re- always effective. search and development project is contracted to a road ecology group com- SMMC Ltd. is exposed of the Zoological Taxonomy and Ecology Department of ELTE Univer- perimenting with new methods to sity, the Wild Game Biology Institute of NyME as well as the Bükk Mammal keep wild animals Research Association. away from motorways. Roe-deer in front of the active wild animal deterrent device (image cropped from a picture taken by an infrared camera).

75 “Anyone who ever been involved in a collision with an animal knows János Farkas, how important it is to keep wild animals away from roads. The main biologist and difficulty is that the various species behave and react differently and Assistant Professor even individual members of a population may behave differently. There at the Zoological is no technical solution that would work equally well for all species. Taxonomy We welcome the tender announced by SMMC Ltd. because the long and Ecology research period helps develop really effective solutions and support Department of safe travel, which is the top priority of SMMC. Our promising partial re- ELTE University: sults received a lot of attention at the European Mammal Conference held in Paris.”

The research phase will end in February 2012; thus currently we do not yet have any ﬁ nal results. What we can clearly see even now is that traditional animal deterrents like reﬂ ective prisms and ultrasound devices did not work in practice because animals soon get used to their presence. The research has also pointed out that wild animals typically do not break though fences but rather walk across junctions and then are trapped on the motorway because of the fence.

Black in white: The need for salt spreading and its beneﬁ t

The winter season is the most complex and most dangerous period for road operators. The cold, wet weather is the nightmare of all motorists. However, life cannot stop on the motorway even in such weather conditions. The winter operations of the State Motorway Management Company Ltd. (SMMC) are focused on maintaining the safe fl ow of traffi c, even in extreme weather. The Company spends months each year preparing for the winter period of early November to mid-March. As the last step of this process, each engineering bureau holds an inspection of their winter machinery in the fi rst half of November. We keep over 1,300 km of roads free from ice and snow during the winter season. The work of the engineering bureaus is facilitated by motorway equipment to support winter operations, regular road monitoring, perma- nent engineering services and the necessary machinery and tools, as well

76 as well-established, well-proven technologies and work organisation tech- niques. Beginning November each year, our engineering bureaus have extra staff on hand to ensure quick response during the winter season when, for instance, icing or snowfall affect the motorways. The efﬁ ciency of winter interventions is highly dependent on the reliability of the weather forecasts available to road operators. In addition to the meteorological stations along the road network, weather forecasts as well as satellite and radar images are received from the National Meteorological Service.

Winter inspection – when snowploughs come out to dance

SMMC begins preparing its fl eet and machinery for next winter’s operations immediately after the end of a winter season. The fi rst step is corrosion removal and inspections for any damage. The more intensive preparation of the fl eet and machinery for the winter begins at the end of August and ends with the fi nal inspection of the equipment when our staff make sure that all parts and elements are prepared, free of corrosion and that all the equipment supporting winter operations works fl awlessly. After all the vehicles have passed the fi nal inspection, they begin their dance of joy together. This is when 8–10 gigantic snowploughs raise their ploughs at the same time and circle around.

Vehicles can only Trafﬁ c on motorways cannot stop even under critical weather conditions. Our remove a mini- goal, therefore, is clear: we need to provide travellers with a ‘black’ road sur- mum of 3 cm thick face. This is why SMMC Ltd. places a priority on prevention and preventive snow layer from the road.

Each vehicle is ﬁ lled with enough salt to de- ice a 50 km road section. When you see a vehicle not spreading salt, it means it is heading back to the Engineering Bureau for a reﬁ ll.

77 Trafﬁ c code: spreading. As we spread the salt before the precipitation hits the ground, once it Vehicles driving next does fall, it melts immediately and cannot freeze up on the surface. In other cas- to one another clearing the road from snow es of anti-skid protection, in compliance with the National Road Management with their warning Regulations, SMMC Ltd. must commence spreading operations within 30 mi- lights on may not be nutes to one hour of learning of the situation, and complete the process within overtaken. 2 to 4 hours. Snow removal by snowploughs may begin when the snow layer is at least 3-5 cm thick. After the snow stops falling, it must be cleared off the road within 5 hours, meaning we must provide a ‘black’ road surface for the trafﬁ c.

Salt

Safe winter driving requires de-iced roads. SMMC Ltd. uses a so-called wet salt technology. This essentially means that, depending on the temperature, we spray a special solution on the road salt that helps the salt stick to the road surface. This is considered to be a very efﬁ cient solution in terms of trafﬁ c safety and it also causes less environmental pollution.

+20 +20

0 0

-7 -7

-20 -20

sodium-chloride calcium-chloride hydro solution solution below DERYHPLQXVÝ& PLQXVÝ&

We have seen that the practice of surrounding neighbouring countries, which have a melting and freezing periodicity and climate similar to Hungary, is also based on the traditional salt-spreading technology. The total amount of salt spread during the

78 winter season primarily depends on the weather. In addition to temperature, the amount, intensity, form and geographical distribution of precipitation, air humidity and current wind conditions also inﬂ uence the amount required.

Number Days with NaCl use NaCl use Total cost Year of snowy avg. temp. 2 (metric tons) (metric tons) (‘000 HUF) days under 0˚C

2007/2008 11 59 14,410 327 253,644 2008/2009 14 60 20,316 470 358,274 2009/2010 30 67 31,777 587 549,280 2010/2011 17 80 24,439 527 341,700

During its road operation, the State Motorway Management Co. Ltd. also takes into account the condition of the vicinity of roads, for which purpose we regularly carry out environmental protection monitoring and other special tests. We pay special attention to examining the impact of the salt used in winter operations on the environment (water, soil). In 2010, all samples taken from the monitoring wells near the road sections of the expressway network received the following expert opinion: ‘The measured values did not exceed category “B” pollution limits.’ This sentence means that the samples examined did not reach the concentration of harmful substances set as the limit value. No harmful effect of the salt used can be detected in the surroundings of the Therefore, it cannot be motorways, neither in the soil nor in the water. This is further corroborated by claimed that salt spread as the fact that the vegetation right along the road surface also needs to be cut antiskid agent on the motor- three times a year, and that the hedge in the dividing strip also needs trim- ways is harmful to roadside vegetation. ming each year. The chloride content of the soil is not higher in spring - after winter operations - than it is in the autumn.

79 Water

Water is the transparent treasure, one of the very basic necessities for life on Earth, an indispensable element of our planet. Used in many different ways, water is a part of our everyday lives and can rightly be described as our vital element. Water is also indispensable to the operation of the State Motorway Management Co. Ltd. Therefore, we pay close attention to protecting water sources and water quality, conserve water consumption and reduce the release of waste water to a minimum during our operation and services. Paying close attention to environmental and economical considerations, the ma- We cover close to jority of the engineering bureaus, the motorway service areas serving travellers’ half of our water needs and the customer service ofﬁ ces have a supply of drinking water from the needs by our own drilled wells public network and/or from our own wells. We can signiﬁ cantly reduce our drinking water consumption by using our own drilled wells and collected rainwater to perform activities requiring a large amount of water such as salt solution mixing, vehicle washing and sprinkling.

Annual water consumption by SMMC Ltd. (m³ per year)

80000 78 292 70000 73 070 72 463

60000

50000

40000

30000

20000

10000

0 200820008 20092009 20102010 drilled wells potable water network

The motion detector (photocell) water taps installed in the washrooms of engineering bureaus, rest places and customer service buildings also serve the purpose of optimising potable water use. The increased water consumption of our company is related to the increase of the road network as well as the establish- ment of new engineering bureaus and service areas.

80 Due to the various technical and technological procedures during road operation, wastewater is generated, which is then always treated in full compliance with the applicable environmental regulations. At all engineering bureaus of the Company, vehicle washing and oil changes take place inside the service shop of the facilities. Oil separation equipment is used for the treatment of wastewater contaminated with oil generated by various technological processes. The quality of discharged wastewater meets the criteria laid out in the relevant statutory regulations, which is evidenced by our regular sampling results. We use a large part (one-third on average) of the industrial water of our sites for washing our vehicles. We run the discharged wastewater through a water-oil separator device. A part of the cleaned water produced by the oil separator equipment with parameters under the threshold limits is recycled (e.g. for salt solution mixing). Except for the Dunakeszi site, all our engineering bureaus can recycle the industrial water. SMMC Ltd. considers it one of its top priorities to preserve and protect the water supply and monitors its water use accordingly. An unfortunate side-effect of the expressway road networks is that oil pollution can be released from motor vehicles to the immediate surroundings of the road surface, which is then washed down from the road surface primarily by rainwater. To prevent this from happening, during the construction of the motorway, the developer (not SMMC Ltd.) installed treatment and trap structures such as deposit, oil and sludge traps to minimise the pollution level of rainwater ﬂ owing into the drainage system and living waters.

BIO OIL FILTER: THE BIOFILTRATION TRENCH

For the newly constructed road sections, we now use the so-called biofi ltration trench to fi lter oil and other pollutants. This more effi cient and more environment friendly procedure involves the following: the fl ow rate of the drained rainwater is slowed down by cross dikes made of stone to allow pollutants stuck to fi ne grains to settle. The remaining deposit is bound by the planted special vegetation. As opposed to the traditional deposit and oil trapping structures, this method can fi lter out contamination of even the smallest grain size and no hazardous waste is generated as no fi lters and linings are used.

81 The latest research show that oil trap equipment that meet the relevant require- Experience and ments only fi lter out the special oil emulsion in the rainwater fl owing from the mo- measurements torway’s road surface to a certain extent. The methods used so far cause addi- indicate that tional economic and environmental problems because the linings and the oil fi lters with normal have to be regularly cleaned and replaced, which means further fi nancial and en- operations, vironmental burdens. Current tests indicates that the best solution at present is the pollution of the system the biofi ltration trench, which is used over a 16 km stretch of our network. of expressway network managed by us is Environmental impact studies generally low and is far below Since 2002, the State Motorway Management Co. Ltd. has performed regular envi- prior expectati- ronmental monitoring tests in compliance with regulatory requirements. Sampling ons. and testing primarily analyses the impacts on the environmental elements of motorways including testing of soil, groundwater and vegetation along motorways.

Tested samples prove Expert opinions: that no hydrocarbon or ‘The results of the groundwater monitoring tests performed by the State Motorway heavy metal pollution Management Co. Ltd. in 2010 along motorway M7 comply with the requirements of is found in the soil and plant samples taken in the Authority and do not exceed the pollution limit values for category “B’”. the vicinity of motorways. ‘The results of the soil monitoring tests performed by the State Motorway Manage- Based on the measured ment Co. Ltd. in 2010 along motorway M0 comply with the requirements of the Au- values, the plants in our green areas could be thority and do not exceed the pollution limit values for category “B”. Any heavy metal used as fodder. (Zn, Pb, Cu) components found in the soil samples are present in the area as back- ground concentration.’

The faster you drive, the more noise you make – noise protection along motorways

Both motorisation and road trafﬁ c generate noise. There may be many types of noise, which depends on a number of factors. Many are enthusiastic about the typical roaring engine sound of the automotive sport, some even prefer if their vehicle sounds ‘better’. However, noise level near residential areas ideally should be

82 kept as low as possible. Many factors contribute to noise pollution: trafﬁ c density, vehicle speed, the ratio of heavy lorries and road inclination. No expansion of residential Since trafﬁ c noise has a direct impact on the people living in the areas around areas can (nor should) be the motorways, noise protection is a priority both when designing new motor- designed in the vicinity of ways and operating existing ones. When new motorways or express roads existing or proposed motorway sections. are planned, the relationship between the routes and settlements are taken into consideration by the designers. A 15-year forecast is drawn up on the expected noise load, and then the required noise protection solutions are designed for the areas where the noise load is expected to exceed the limits.

The noise shielding wall is more than a simple fence because its special design prevents the transmission and return of sound at the same time.

The road network operated by SMMC Ltd. has 78 km of noise shielding walls installed.

WHEN THE ENGINE ROARS

The noise emission of motor vehicles consists of a number of factors: the noise emitted by the engine, the gearbox, the driving gear and the exhaust system, as well as and the fractional friction between the wheels and the road surface as well as the air-dragwind resistance. In addition, the noise level is also inﬂ uenced by environmental factors such as the degree to which the area is built up and the type and condition of the road surface. Few people are aware that fractional friction and the wind noise are more important factors in the noise load than the noise emission of the engine; meaning that the faster you drive, the more noise you make.

83 In the course of issuing permits for newly-built residential buildings and industrial facilities near existing motorways, the responsibility belongs to the designers and the local building authorities. They are required to design facilities and locate them in such a way that the noise would not exceed the approved noise load threshold limits. If the building permit is issued notwithstanding the above, the permit issuing authority is required to take action for noise protection. During our operations, we monitor the changes in road noise and always inves- tigate any reported complaints. Problems most often arise when those living in the vicinity of the motorway are disturbed by the noise of the trafﬁ c, yet the noise loads do not justify any action. Nonetheless, we make conscious efforts to solve noise issues in a way acceptable to all parties, even when the limit value has only been exceeded slightly.

We check the noise level with continuous measurements and the effect of the noise shielding wall has a quantiﬁ able impact.

Waste management

Long trips on motorways and road operating activities generate waste. The waste management activities of SMMC Ltd. therefore concentrate on the collection and transportation of these two main types: waste produced

84 during operational activities and the waste left by travellers at service areas SMMC Ltd. pla- and along the road. ces an especial Based on the amount of waste generated each year, our Company has a le- importance on gal obligation to prepare a Waste Management Plan. The Waste Manage- reducing waste ment Plan has separate chapters on managing hazardous and non-hazard- production and ous waste types. The plan describes the current situation of the Company’s proper waste management. waste production and waste management activities, compliance with the law, priorities for a 6-year period, objectives for reducing the amount of waste to be dumped/incinerated, to reach the highest possible level of recycling and to ensure that the waste management activity of the Company is harmonised with regional and national waste management plans.

Key objectives of the Waste Management Plan, 2010–2015:

Goal Action programme

Limiting the amount of haz- A review of the ingredients used for ardous waste generated. hazard categories; recommendations for alternative materials. Limiting the amount of com- Maintaining the selective waste collecti- munal waste generated. on system at least on the current level. Optimising the use of materi- Limiting the NaCl salt spread to 1 kg/m²/ als that are harmful to the winter season, if possible. environment.

Motorway service areas are The Company has the waste recycled/disposed of by contracted partners who not waste dumping sites! hold the permits speciﬁ ed by law. Collection of the generated waste until delivery to a contracted partner; waste separated by types and hazard category.

Quantity of waste transported (t): 2008 2009 2010 Hazardous waste 382.6 340.5 348.8 Non-hazardous waste 43,131.1 40,371.9 35,768.5

85 The waste generated by motorway users are usually waste generated during travel such as plastic drink bottles, packaging materials and leftover food. These are sorted at a number of service areas for recycling.

GO SELECTIVE FOR RECYCLING 50 motorway service areas are equipped with a selective waste collection is- land with 2 storage boxes for plastic, 1 for glass, 1 for metal and 1 for paper. Transportation of the waste collected to an appropriate processing factory is arranged by the appropriate engineering bureau.

Selective waste collection is one of the positive examples where the population is actively involved in environmental protection. However, there are excep- tions to this rule as well. Illegal waste dumping sites have appeared along the motorways where people not committed to environmental protection dump waste that is clearly not related to travel. In rest areas, our staff have found trashed beds, construction debris and unserviceable electronic equipment. Another general phenomenon is that motorists who have a ﬂ at tyre leave it on the roadside after changing it - these need to be collected and disposed of by our Company with all the costs associated.

The annual drawing contest is very popular among the children of our employees. One of the regular topics is the environmentally-friendly motorway, to help raise a more environmentally conscious generation.

86 Energy

Reduction of electricity use

By using these devi- Good visibility is fundamental to safe ces, SMMC Ltd. saved travel: lighting of roads not only helps 464,000 kWh of electri- fi nd your way around but based on the city in 2010 alone, which principle of ‘see and be seen’, it also indirectly translates to a plays a major role in accident prevention. reduction of 280 metric As a result, certain short sections of our tons of CO -emission. 2 motorway network are fully lit at night. As the high-power lamps used to illuminate junctions and the city-bound sections of motorways consume a considerable amount of power, energy saving solutions used at those locations can signifi cantly reduce the environmental impact and also has serious economic benefi ts. In 2007, on the joint section of the M1-M7 motorways, we had a pilot project testing the so-called lighting current control system optimising the energy used for lighting. After successful tests, we installed By using these current control devices on the joint sec- devices, SMMC Ltd. tion of motorways M1-M7 in June 2009 saved 464,000 kWh and at two locations at the Megyeri of electricity in 2010 Bridge in December 2009. In 2011, we alone, which indi- plan to roll out this technology at other il- rectly translates to a reduction of 280 luminated motorway junctions.

metric tons of CO2- emission. The lighting current control system on the Megyeri Bridge cut down electric power consumption by 23%.

87 Cost savings realised by bay of current control at public lighting locations (2009 and 2010)

400 000 350 000 300 000 250 000 200 000 150 000 100 000 50 000 0 0.LVWRNDM 00FLW\ERXQG 00FLW\ERXQG 00FLW\ERXQG 00FLW\ERXQG 0%S;;,,'y]VD*\ 00FLW\ERXQGNP 00LVNROFVRXWKMXQFWLRQ 00FLW\ERXQG9DV~WX 0FLW\ERXQG3XEOLFOLJKWLQJ 0+iURVL%ULGJHRYHUWKH'DQXEH 0QRUWKHUQEULGJHRYHUWKH'DQXEH3HVW Power consumpation in 2009 (kWh) Power consumpation in 2010 (kWh) 0QRUWKHUQEULGJHRYHUWKH'DQXEH%XGD

In 2010, our experts examined the possibility of using the current control system for the internal lighting of the engineering bureaus. Test results indicated signifi cant savings of approx. 30%. The precondition for using this technology is that the existing fl uorescent lamps need to be replaced with more modern ones and appropriate lamp trigger mechanisms are needed. In De- cember 2010, we were able to replace the lamps and introduce the current control system at four engineering bureaus (Bicske, Martonvásár, Sziget- szentmiklós, Emőd). As a result, we now spend 30% less energy for lighting at those locations. In another pilot project launched at the Martonvásár engineering bureau in December 2010, we reviewed the option of additional energy saving by using so-called LED light sources at public lighting locations (e.g. lighting for engineering bureau sites or service areas). According to preliminary results, signifi cant savings of between 40 and 80% can be expected by way of using

88 these light sources. Decision on the deployment of the new technology is expected in 2011 after the ﬁ nal test results and the return on investment calculations based on the investment cost.

SMMC’s electricity consumption (GJ)

30 000 25 000 20 000 15 000 10 000 5 000 0 2008 2009 2010 Used for the motorway line Used by the engineering bureaus

SMMC’s electric power consumption greatly depends on the length of the road network it manages. Whereas power consumption of our engineering bureaus the same year after year, there are signifi cant differences on the motorway line use. It has to do with the signifi cant expansion of our road network in 2009. The diagram also shows that the increased electric power consumption in 2009 due to the increased length of our network was somewhat reduced in 2010 by the power saving measures of the engineering bureaus and the abovementioned power saving development projects. Due to the opening of new motorway sections in 2010 (M43, M31), we expect some consumption increase in 2011 again. We need to point out, however, that with a power consumption of this magnitude, even savings of a few percentage points can mean a signifi cant reduction in quantities.

Lower natural gas consumption

The heating and hot water needs of the engineering sites of the State Motor- way Management Co. Ltd. are provided for by natural gas. In 2009, we deployed gas vaporisation improving devices at suitable sites, which helped op- timise the operation of our existing boilers. Due to the deployment of this new system, our gas consumption was reduced by over 10%.

89 Average annual gas consumption of motorway engineering bureaus (m3 ) Gas consumption prior 120 000 to deploying the technology 100 000 Gas consumption 80 000 after deploying the 60 000 technology 40 000 20 000 0 1 2 3 4 5 6 7 8 9 10 11 12 Service period (month)

The use of renewable energy sources

Our Company continuously reviews available options for the use of renewable en- SMMC Ltd. also ergy sources. These new solutions may prove economical primarily to provide heat- uses renewable ing energy to the buildings of the motorway engineering bureaus to complement energy sources the existing natural gas based energy supply. for the purpose Complementing or partially replacing the existing systems with technologies based of environmental protection on renewable energy, however, is only economical if the existing system needs re- and cost effecti- furbishing or maintenance. In such cases we prepare detailed ROI calculations to ve operation. examine the option of deploying renewable energy based technologies.

The building of the Szigetszent- miklós Engineering Bureau equipped with solar panels: De- pending on the weather and the level of utilisation, the technology can cover up to 30% of the annual energy use for hot water.

90 The company provided apartments of the Szigetszentmiklós Motorway Engi- neering Bureau receive the hot water also from a natural gas operated boiler, which means signiﬁ cant energy consumption. In 2009, the hot water system was complemented with solar panels using the thermal energy of the sun.

Energy supplied by solar panels

Our company continuously improves its network resulting in some of the latest technological developments deployed on our motorways, including the use of solar panels in road operation. For economic reasons, we use these units at locations where it is absolutely crucial to have a continuously operating road operation support device with low electric power consumption. These devices include traffi c counters, meteorological stations and traffi c monitoring cameras. Unfortunately, practice did not fully confi rm the viability of this concept. Even though the solutions are successful in technical terms, regular thefts - and sometimes even vandalism when the device cannot be stolen - signifi cantly impair device availability.

If a solar panel is stolen from the motorway, a webcam may not be visible for long.

91 Fuel use

Our Company uses passenger cars and lorries to carry out its duties. In addition to our own cars, we also use passenger cars provided by a fl eet management company within the framework of a leasing contract. As the road network expands, we need to increase our vehicle fl eet because carrying out road operating tasks clearly requires a certain size of a special purpose vehicle fl eet.

SMMC’s lorry ﬂ eet (vehicles)

Own lorries 2008 354 2009 373 2010 393

The mileage of our motor vehicles is registered by a road administration pro- gram to monitor their fuel consumption. The most fuel-intensive activity is de- icing in the winter. Therefore, the amount of fuel used by our Company greatly depends on how cold and wet the winter season is in any given year.

When procuring its vehicles, SMMC Ltd. pre- fers automobiles with lower emission levels than legally required.

92 Air pollution

SMMC Ltd. maintains accurate records of the fi xed air pollution point sources located at its motorway engineering bureaus, and also fulfi ls its annual reporting obligation to the competent environmental protection inspectorate. Our engineering bureaus have a total of 52 air polluting point sources with environmental operating permit, which are part of the heating, electric power supply, emergency power supply and vehicle maintenance technolo- SMMC Ltd. uses 52 gies. fi xed point sources to The air pollution measurements of our fi xed point sources are reviewed measure its own air by an accredited laboratory every 5 years. Currently all of our point sour- pollution. ces have valid measurement readings. In 2011, the engineering bureaus of Szigetszentmiklós, Bicske, Gödöllő and Balatonvilágos will have to have their air quality protection measurements. On the basis of the measurement data, we can state that the concentration of the pollutants in the emitted gases did not reach the threshold and/ or limit values specifi ed in the relevant decrees. Carbon dioxide emission impacts the Earth’s atmosphere, climate change and air quality. In order to keep the level of global warming below 2 de- grees Celsius, carbon dioxide emissions have to be reduced. Depending on their model and year of manufacture, motor vehicles produce signifi -

cant CO2-emissions. SMMC therefore places high priority on using motor

vehicles with lower CO2-emission levels.

ENVIRONMENTALLY FRIENDLY AIR CONDITIONING State-of-the-art air conditioning equipment of manufactured by LG, Mitsubishi and Daikin is used at the Engineering Bureaus. The primary concern upon their selection was environmental impact and energy conservation in operation. Therefore, the majority of those units operate with industrial gas that do not harm the ozone layer. The key characte- ristic of these air-conditioning units is that they do not contain any freon or chlorine coolant.

93 SMMC Ltd. has no inﬂ uence on The relatively high difference compared to the emission data of 2008 comes the CO -emission of the vehicles 2 from the fact that over the past years, the total length of the road network using the road network it manages. However, the Company we manage has increased considerably; therefore, the engineering bu- continuously makes efforts to reaus now have to cover signiﬁ cantly larger areas several times a day. lower the emission levels of its own vehicles. CO2-emissions of the lorries and passenger cars used by SMMC

CO2-emission (t) 2008 2009 2010 8,125 9,347 8,920

Within the European Union close to 20% of the total

CO2-emission is caused by passenger cars and light lorries. Consistent observation of the speed limits would signiﬁ cantly lower

CO2-emission.

94 95 96 IMPRINT

Published by: Attila Bakó Editor: Domitilla Csohány Contributors:

Tibor Balogh Dávid Á. Németh Tamás Bankó Tünde Nyíry Gyöngyi Béni Jenő Patonai Károly Berger Dóra Pelsőczi Károly Boromissza Edit Rajki-Németh Eszter Czeczidlowszky Dóra Rostás Tamás Cseh Miklós Sándor Sallai Ferenc Fóris László Sánta Edit Grausz-Koczka dr. Ervin Schromm Márta Horváth-Szabó Márta Somodi Tibor Illés Krisztián Szabó Csaba Juhász János Antal Szakál Ernő Kiss Edina Sztaskó András Korom Tamás Urbán Dóra Lehotai

Please send any comments or questions about this sustainability report to the following email address: [email protected]

State Motorway Management Company Ltd. (SMMC Ltd.) Registered ofﬁ ce: H-1134, Budapest, Váci út 45/B. Telephone: +36-1-436-8200 Fax: +36-1-436-8210 www.motorway.hu Customer Service: +36-40-40-50-60 [email protected]

Graphic design: László Nádler Prepress preparation: HVG Press Kft. Photos: András Láng-Miticzky

97 Environmentally friendly publication

Cover: 250g SHIRO Alga Carta Ivory

Shiro Alga Carta is made from algae which would otherwise clog up the Venice lagoon. The seaweeds are harvested annually and combined with FSC pulp. Made with Energia Pura that supports the development of electrical energy production coming from renewable sources.

Inside: 150g Revive Pure Natural Matt

Fibre source 100% post-consumer waste Blue Angel Blue Angel products are made of 100% post-consumer waste without chlorine bleaching EU Flower EU Flower products comply with the requirements regarding the responsible utilisation of forest resources as well as the rules concerning the overall production process Bleaching Fibre pulp is bleached in a 100% chlorine-free process (TFC) Treatment system Made in a paper factory that complies with the environmental protection standard ISO 14001 and is EMAS-certiﬁ ed Waste management Waste treatment through recycling or energy-generating incineration

Recycled content 100% chlorine-free Made in an ISO Fully recyclable 14001-certiﬁ ed and biodegradable paper factory

Blue Angel EU Flower STATE MOTORWAY MANAGEMENT COMPANY LTD.

Call Center: +36-36-587-500 +36-40-40-50-60 (available only from Hungary) E-mail: [email protected] Internet: www.motorway.hu

Have a safe and pleasant journey!