Document of The World Bank
FOR OFFICIAL USE ONLY Public Disclosure Authorized Report No. 5477-HU Public Disclosure Authorized HUNGARY
STAFF APPRAISAL REPORT OF
A TRANSPORT(RAIL/ROAD) PROJECT Public Disclosure Authorized
April 30, 1985 Public Disclosure Authorized Projects Department Europe, Middle East and North Africa Regional Office
This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorizaton. CURRENCY EQUIVALENTS (As of July 1984)
Currency Unit = Forints (Ft.) Forint 1 = US$0.0215 Forints 46.5 = US$1.00
WEIGHTS AND MEASURES
Metric System British/US System
1 meter (m) = 3.2808 feet (ft) 1 kilometer (km) = 0.6214 mile (mi) 2 2 I square kilometer (km ) = 0.3861 square mile (mi ) 1 metric ton (m ton) = 0.9842 long ton (lg ton) 1 kilogram (kg) = 2.2046 pounds (lbs)
PRINCIPAL ABBREVIATIONS AND ACRONYMS
CMEA - Council for Mutual Economic Assistance ECE - Economic Commission for Europe ER - Economic Return FYR - First Year Return GDP - Gross Domestic Product GTKm - Gross Ton Kilometer HC - Hungarocamion International Freighting Company IBRD - International Bank for Reconstruction and Development ICB - International Competitive Bidding KTI - Hungarian Institute of Transport Science LIB - Limited International Bidding MAV - Hungarian State Railways MCC - Maintenance Coordination Centers MOF - Ministry of Finance MOT - Ministry of Transport MSC - Maintenance Sub-centre NBE - National Bank of Hungary NPO - National Planning Office NtKm - Net Ton Kilometer PKm - Passenger Kilometer PRD - Public Roads Department of MOT PRMC - Public Road Management Centers RF - Revolving Fund SCD - Supervision and Control Department SDB - State Development Bank SOE - Statement of Expenditures TDD - Technical Development Department of MOT TEM - Trans-European Motorway TU - Traffic Units UIC - International Railway Union UNDP - United Nations Development Programme
FISCAL YEAR
January I to December 31 FOR OMCIAL USE ONLY
HUNGARY TRANSPORT(RAIL/ROAD) PROJECT
Loan and Proiect Summary
Borrower: Hungarian People's Republic.
Beneficiaries: Hungarian State Railways (MAV) and Hungarocamion International Freight Company (HC).
Amount: US$75 million equivalent.
Terms: Repayable in 15 years including three years of grace at the standard variable interest rate.
Relending Terms: US$21 million would be onlent to the MAV for a period of 15 years and $17 million to the HC for a period of 6 years, both at a rate equal to at least the Bank rate plus a 30Z markup which includes a fee for the foreign exchange risk to be borne by the Borrower.
Proiect Objectives and Description: The main objective of the proposed project is to support the Government's policies of increasing the efficiency of the transport sector, conserving energy in the sector and increasing the sector's earnings of convertible currencies. The project consists of: (i) a railway component including a modernization program for the Ferencvaros (East) marshalling yard in Budapest, acquisition of track renewal and maintenance equipment and equipment to upgrade interface facilities between rail and road at five container terminals, training of railway personnel to familiarize them with recent developments in traffic, operations and engineering practices; (ii) a highway component including construction of the first phase (14 km) of a 28 km. four-lane motorway bypass of Budapest including two bridges across the Danube, acquisition of equipment for the maintenance of national roads, pavement management, road safety and road construction quality control, and training of highway personnel in modern developments in traffic safety and pavement management; (iii) an HC component including acquisition of larger capacity, more fuel efficient and longer life freight vehicles together with supporting management information systems and maintenance workshop equipment; (iv) technical studies of (a) the contribution of road users to financing the costs of roads, and (b) modern management systems and operational aspects of international trucking companies.
Thisdomet has a rested distibution and may be used byrecipients only in the performanceof theiro idutie ItscOtents May nototherwie be dbosed without WorldBank autborization. Benefits and Risks: The ultimate beneficiaries of the proposed project would be transport users who, because of the different intensity of use, come from a range of sectors and income levels. At full development, the Bank-assisted components in railways would bring annual cost savings of about US$10 million equivalent while the investments in the HC would yield incremental net revenues of about US$15 million equivalent annually. Net foreign exchange earnings and savings in convertible currencies are estimated at about US$15-20 million annually at project completion. Project risks are considered small as the technical solutions envisaged are based on adequate studies and engineering and Hungarian transport agencies have built up competent management and technical expertise. The impact on the environment would be positive.
Estimated Costs: Local Foreign Total US $ Million Railway Component 29.3 25.0 54.3 Highway Component 38.6 32.8 71.l HC 0.3 31.0 31.3 Total Base Cost 68.2 88.8 157.0 Physical Contingencies 6.1 3.7 9.8 Price Contingencies 21.5 27.2 48.7 Total Project Cost 95.8 1' 119.7 215.5
Financing Plan: Local Foreign Total US $ Million
World Bank - 75.0 75.0 Government/Cofinancing 56.1 9.9 66.0 Railways 39.4 10.8 50.2 HC/Cofinancing 0.3 24.0 24.3 95.8 119.7 215.5
Estimated Disbursements: IBRD FY 1986 1987 1988 1989 1990 1991
Annual 6.7 15.0 14.6 17.2 14.7 6.8 Cumulative 6.7 21.7 36.3 53.5 68.2 75.0
Rate of Return: About 20%.
Appraisal Report: No. 5477-HU dated April 30, 1985.
-i' Includes US$24.9 million of taxes and duties. HUNGARY
STAFF APPRAISAL REPORT OF
A TRANSPORT (RAIL/ROAD) PROJECT
Table of Contents
Page No.
I. THE TRANSPORT SECTOR ...... 1
A. The Transport System. 1 B. Transport Planning, Policy and Coordination 2 C. Transport Sector Issues.. 4 D. Bank Group Transport Sector Operations in Hungary 6
II. RAILWAYS AND HIGHWAYS SUBSECTORS. . . 7
A. Railways .. 7...... -.---7
-organization . 7 -Railway Property ... 7 -Operations ... 8 -Uneconomic Lines and Services .. *.. 9 -Staff and Productivity ...... 9 -Railway Tariffs ...... 9 -The Railway's Investment Plan (1986-90) . . .10 -Financing Plan ...... , .. 11
B. Highways ... 12
-Organization ...... 12 -Planning ...... 12 -Engineering ...... 13 -Construction .... 13 -The Network...... 14 -Maintenance ...... 14 -Equipment and Workshops . . . 14 -Traffic Regulation and Safety .... 15 -The Highway Investment Plan (1986-90) ...... 15
This report is prepared by Messrs. M.K.Ganguli (Transport Economist),- W.S.Matthey (Highway Engineer), S.B.Orlic (Railway Engineer), C.F.de Castro (Road Transport Specialist), and J.McCombie (Consultant) on the basis of an appraisal mission to Hungary during November/December 1984. Ms. N.Mangosing assisted the appraisal mission in the preparation of financial statistics. Table of Contents (Continued) Page No.
C. Hungarocamion ...... 16
-Organization ...... 16 -Operation and Fleet ...... 16 -Investment Plan (1986-90) and Development Strategy .. 16 -Pricing and Finance ...... 17
III. THE PROJECT ..... o...... 18
A. Objectives ...... o ,...... e....e...... 18 B. Description ...... o ...... 18 C. Cost Estimates ...... O..... 22 D. Engineering ...... o...... 24 E. Financing ...... o...... 24 F. Implementation ...... 25 G. The Loan, the Borrower and the Beneficiaries .*..O... 27 H. Procurement ...... 28 I. Disbursements ...... _...... 30 J. Reporting, Accounts and Audit ...... o ...... 31
IV. ECONOMIC EVALUATION ...... 32...... 32
A. General ...... 32 B. Project Costs and Benefits ...... * ...... g.* 32 C. Economic Return (ER) ...... 33 D. Project Risks ...... 37 E. Environmental Impact ...... o...... 37
V. FINANCIAL ANALYSIS ...... 38
A. General ...... 38 B. Railways ...... 38 C. Hungarocamion ...... 44 D. Highway Component ...... 48
VI. AGREEMENTS REACHED AND RECOMMENDATIONS ...... 49 Table of Contents (Continued)
ANNEXES Page No
1. Scope and Content of Proposed Railway Action Plan (1986-1990) ...... 51 2. Outline of Terms of Reference for Road User's Contributions (RUC) Study.. 53 3. Outline of Terms of Reference for Technical Assistance and Studies for Hungarocamion ...... 55 4. Design Characteristics of Railway Works - Ferencvaros East Marshalling Yard ...... 63 5. Financial Analysis ...... 9o 64 6. Related Dcoments and Data Available in the Project File .... 76
TABLES
1. Freight Traffic by Mode of Transport 1960-83 .. 78 2. Public Passenger Transport 1960-83 ...... 79 3. Number of Motor Vehicles ...... 80 4. Investments for Different Transport Modes ...... 81 S. Railway Investment Plan, 1986-90 ...... 82 6. List of Possibly Uneconomic Lines ...... o...... 83 7. Selected Operating Statistics for Hungarian Railways (1978-83) ...... 84 8. Comparison with Selected European Railways ...... 85...... 9. Goods Transported in Containers by MAV 1970-83 ...... 86 10. Railways Staff and Productivity ...... 87 11. Maximum Acceptable Traffic ...... Volumes ...... 88 12. Principal Highway Design Standards ...... 89 13. Road Network Statistics (1980)...... 90 14. Axle Overload Fee Scale ...... 91...... 15. Past and Projected Road Expenditures...... 92 16. National Road Investment Plan 1986-90 - by Major Work Categories ...... 93 17. Vehicle Fleet of Hungarocamion ...... 94 18. Hungarocamion - Main Types in the Truck Fleet ...... 95 19. Average Annual Utilization of Vehicles ...... 96 20. Selected Operational Statistics of Vehicles ...... 97 21. Hungarocamion - Actual and Planned Investments ...... 98 22. Procurement Plan for Railway Items Eligible for Loan Financing ...... 99 23. Outline of Training Program ...... - ...... 100 24. M-0 Motorway - Principal Characteristics and Construction Quantities .... 101 25. Road Maintenance, Evaluation and Testing Equipment Lists ...... 102 26. Hungaroca'iion-List of Trucks and Workshop Equipment ...... 103 27. Railway Component - Implementation Schedule ...... 104 28. Highway Component - Implementation Schedule .... . 105 29. Hungarocamion Component - Implementation Schedule ...... 106 30.. Estimated Schedule of Disbursement ...... 107 31. Freight and Passenger Traffic Actual 1978-83 and Projections 19S5-90.... 108 Table of Contents (Continued)
CHARTS Page No.
Chart . Organization of Hungarian Railways (MAV) (IBRD 27039) ...... 109
Chart 2 Organization of the Ministry of Transport (IBRD 27038)...... 110
Chart 3 Organization of Bungarocamion (IBRD 27040) ...... 111
MA
IBRD 18773 - Hungary - Transport (Road/Rail) Project. I. THE TRANSPORT SECTOR
A. The Transport System
1.01 Hungary is a landlocked country in east-central Europe. The only waterway giving access to the sea is the river Danube, which flows about 1,465 km from Budapest to the Black Sea; other maritime European harbors can be reached by land. The transport system is diversified, comprising about 8,000 km of rail, 30,000 km of arterial roads, 1,300 km of regularly navigable rivers and canals, one international airport, and a fairly large oil and gas pipeline network. Trunk routes and international connections are of special concern because Hungary has borders with five countries (see IBRD Map 18773) and aims to improve its integration with the world economy. Budapest is the hub of the country's rail, road and airways system, has by far the busiest of its Danube river ports and is also a primary node on the major pipeline system.
1.02 Railways and roads are the backbone of the transport system and together, carry about 751 of total freight traffic and more than 95% of passenger traffic (Tables 1 and 2). The railway network has the crucial responsibility for moving traffic over relatively long distances. Although road traffic is increasing fairly rapidly, it functions mainly as a short-haul mover. Whereas in 1960, the railways carried about 80% of total freight (in ton-km), in 1983 its share had declined to less than 50X (Table 1), with all .other modes registering an increase. Water transport, mainly on the Danube, has retained an important and competitive place as a carrier of bulk materials over long distances (Table 1). The railway's former dominance in public passenger traffic,passed to roads in the early 1970s and the current rail/road share is about 281 and 69Z respectively (Table 2). The railways also carry a sizeable volume of conmmuter traffic, to and from large cities. Public transportation within cities is undertaken by bus, tramway and trolley bus networks. Per capita tram traffic in Budapest ranks amongst the highest in the world and the capital is served also by an underground railway system.
1.03 The most conspicuous transport development during the last fifteen years has been the rapid growth of private transport. The number of privately owned cars has increased more than five-fold from 238.6 thousand in 1970 to 1,258.5 thousand in 1983 (Table 3); and today, every tenth inhabitant in Hungary owns an automobile.
1.04 Hungary's economy has grown rapidly since World War II with per capita income in real terms rising at about 5Z per annum between 1960 and 1980. During the same period, total freight traffic also grew at about 5-62 per annum, public passenger transport at about 2X per arntvm, with the proportion of private transport however, increasing continuously at about 15-20% per annum. The slackening of world economic growth, including Hungary's, slowed the growth of traffic in the early eighties (Tables 1 and 2), however, positive growth is expected to resume. Foreign trade activities are of vital importance for the Hungarian economy and in 1980's, total export/import trade of more than 30 million tons per annum (excluding pipeline traffic) was carried predominantly by rail. Furthermore, the country's location results in considerable east-west and north-south transit movements -2-
(more than 20 million tons per annum). The Hungarian railways rank among the leading transit enterprises in Europe. Road transit traffic is sizeable too with about 170,000 foreign trucks crossing Hungary annually. At present, the principal task for the sector is to develop transport at its most sensitive points and remove crucial bottlenecks, particularly those which affect international and transit trade to which the Government attaches a very high priority
B. Transport Planning. Policy and Coordination
1.05 The Ministry of Transport (MOT) has overall responsibility for transport regulation, and exercises control of public transport through its approval of the annual investment and operating plans of self dependent transport companies, which are also required to submit annual performance and financial reports. The Hungarian State Railways (MAV) are responsible for all rail transport operations (internal and international), similarly the Hungarian Shipping Company (MAHART) is in charge of all river ports and the Hungarian river fleets on the Tisa and Danube rivers. The Hungarian Airline (MALEV) flies solely international routes. By road, freight and passengers are carried by both public transport companies and the "own-account"trucksand buses of industries and cooperatives. Hungarocamion (HC) specializes in international trucking and like MAHART and MALEV competes in international markets. A number of other comon carriers, the largest of which is Volan handle short and medium distance transport within Hungary. Volan operates with 24 branches throughout Hungary, which each set their own rates. The company owns 15S of the truck fleet and performs 252 of domestic road transport. Six other smaller companies (some specialized carriers) together perform about a half of Volan's volume. Most of the remaining road transport is carried by "own-account" fleets which may take haulage work for others once their own requirements are met and which are fully competitive with the common carriers. Tariffs, which are cost based and competitive, are negotiated and favor clients who can assure return loads. Special agencies help locate and assemble loads in order to minimize empty trips and conserve energy. The Government prescribes tariff ceilings to protect customers in outlying areas, but there is no freight allocation in the transport sector. Shippers make their own choice between modes and exporters or importers may choose between domestic or foreign carriers.
1.06 The transport planning structure consists of the National Planning Office (NPO), the planning units of Ministries, local governments/municipalities,and enterprises. Transportation projects included in the Five-Year Plans originate both at the micro-level through the industrial enterprises and county authorities (especially for municipal and local roads) and at the macro-level through NPO. Review and coordination of new investment proposals in the transport sector is the responsibility of MOT which submits its program to NPO. The demands for transport by the economic enterprises and sectors are reconciled by NPO with the existing capacities and expansion plans of the transport enterprises and with the Government's policy objectives. This results in adequate inter-modal coordination. - 3 -
1.07 Hungary's principal transport policy objectives, approved by Parliament in 1968 and updated in 1978 are the efficient provision of services with the complementary development of different modes. Specifically:
(i) developing freight transport in a harmonized manner, in full cooperation with the producing. warehouseing, forwarding units and the users, which implies that the transport technology of bulky goods, as well as the other goods suited for the formation of unit-loads such as palletization, pre-slinging, and containerization,should be modernized;
(ii) encouraging mass transportation by public conveyances and developing private transport in keeping with the demand and the country's economic possibilities;
(iii) emphasizing the development of international transport, principally transit traffic by rail, and exploiting the advantages inherent in the country's geopolitical situation;
(iv) regulating the distribution of traffic among the different transport modes mainly by econiomic means and criteria (e.g. tariff policy, energy efficiency, manpower needs, etc.) and in case of necessity, by administrative measures; and
(v) strengthening the transport companies' self financing capabilities.
1.08 Transport policy goals are implemented through annual and five-year plans which are enacted by Parliament. The cornerstones of transport policy will continue to be competition between transport agencies in the market (Para. 1.05) and conservation of energy with the main policy instruments being pricing measures.
1.09 Transport investments during the last two decades accounted for about 14X of total investments. This is slightly lower than 151-25% in many other countries which tends to reflect both the emphasis placed on modernizing and upgrading existing infrastructure, and the lower costs of construction in Hungary's generally flat terrain. Table 4 shows the 1980-1984 investments for the different transport modes and the investment forecast from the draft 1986-1990 plan. Investments in the road and rail sub-sectors accounted for 85-90 of the sector total during 1980-84, the balance being made up of river port, shipping, aviation and pipeline investments, and this pattern is expected to continue through the next plan period. The transport sector investment plan appears to be generally need-based and operationally sound. A review of sector investments will be part of "he ongoing dialogue between the Borrower and the Bank. -4-
C. Trans8ort Sector Issues
1.10 Hungarian railways (MAV) are characterized by high volume operation on a limited part of the railway network with 30S of the kilometerage carrying about 702 of freight traffic while the balance of the network, particularly branch lines, is relatively under-utilized. This has two important implications: (i) that railway investments in Hungary should be focused primarily on main lines with particular potential for improved services, thus avoiding dispersion of effort over a large national network; and (ii) that, following appropriate studies, uneconomic services should be closed and the personnel surplus that would arise be reduced over a reasonable period of time. Detailed examination of the investment proposals in the draft Railway Investment Plan (Table 5) shows that the plan is responsive to the country's needs (paras. 2.14-2.17). About 1,400 km (about 15Z of the railway network) of uneconomic lines were closed during the last fifteen years and staff reduced by 18,000 (about L2X of total staff). A recent study has been made of the future of a further 600 km of relatively low density lines (Table 6). During negotiations, confirmation was obtained that not later than December 1986 the Government would have made decisions relating to the measures to be taken, in respect of those lines out of the 600 km studied, which would be closed by 1990; and that the Bank would be informed of these decisions soon thereafter.
1.11 The present share of road traffic in international trade (about one million tons) is conspicuously low compared with the railways' (more than 30 million tons), despite the fact that the country exports a considerable. quantity of agricultural and animal husbandry products, textile, leather and other high-value goods all of which in other countries are usually moved by road transport. This anomaly leads to the question whether the transport market is functioning effectively in Hungary. Hungarocamion (RC), competes with other European carriers and is operationally efficient. However, insufficient fleet size and structure, lack of modern, fuel efficient, competitive, commercial vehicles and inadequate support facilities are creating severe constraints to the achievement of a better inter-modal allocation in the shipment of foreign trade goods. HC is now undertaking a major expansion and overhaul of the truck fleet engaged in long haul traffic and the proposed project is designed to assist this expansion (Paras. 2.33 and 3.12).
1.12 Energy has become a critical sector for the Hungarian economy. About 45Z of Hungary's energy consumption, including about 80X of oil needs are covered by imports. Transport, public and private, accounts for roughly 14% e' total energy consumption (about 70X of the total gasoline and 28Z of diesel and fuel oil used). Based on 1980-81 reforms, tLiedomestic price of petroleum products are now wr-e aligned to the import price in convertible currency trade. Gasoline (!PZ octane) is sold in Hungary for 20.0 Ft/liter (US$1.63 per US gallon) and diesel oil for 9.8 Ft/liter (US$0.80 per US gallon). The energy costs of transport come to about 60 billion forints (about US$1.3 billion) per annum. At present, within the transport sector, the share of energy consumption by rail and road stands at about 10X and 80% respectively and the balance is accounted for by other modes of transport. In recent years a main feature of railway development has been the modernization of the traction fleet. Consequently. the railway's share in energy consumption has declined from about 25Z to lOZ during the last ten years. Specific energy - 5 - consumption in railways declined primarily due to the steady decline in the number of steam locomotives, but the overall decline in the railways' share of energy consumption is also influenced by its relatively lower traffic growth. The rapid development of road transport is demanding a steadily increasing share of total energy consumption. The Government is pursuing energy conservation in road transport through such actions as better vehicle operation and maintenance, drivers' training, raising the average payload of trucks, more efficient utilization of vehicle fleets, shifts of traffic to less energy-intensive modes and improved urban traffic management. The proposed project supports the Government's policy and addresses transport energy conservation through rationalization of railway operations, improvement in the fleet composition of HC (paras. 3.01-3.02) and by facilitating a more efficient road traffic flow by means of the Budapest by-pass (para. 4.12).
1.13 Encouraging competition to ircrease efficiency has been a feature of Hungarian government policy during the last decade. Recently, local competitive bidding for contracts has started to be introduced but the procedure and practices are still in a formative stage. The possibility and practicality of using International Competitive Bidding (ICB) for civil works was carefully examined with MOT staff, consultants and contractors. After reviewing the current organization and practi',esof construction in Hungary (Para. 3.23), and with due regard to country needs, the Government agreed that ICB procedures would be followed for the higeway civil works component included in the proposed project.
1 14 The method of recovery of infrastructure costs differs between rail and road transport.- The railways maintain the track, but it is not clear Viether road users, who contribute indirectly towards road expenditures in the _.orm of tax on fuel, turnover tax, and fees on heavy axle loads, make an Adequate contribution. The proposed project includes a technical study by Hungarian experts/consultants, (para. 3.14 and Annex 2) of contribution of road users towards road expenditures, to be completed by December 31, 1987, designed to evaluate the present status and appropriateness of road users' contribution.
1.15 Currently, one of the principal objectives of the Government, approved by the Parliament, is to strengthen the transport companies' self financing capabilities. As part of a review of the transport sector, the Government agreed to maintain a dialogue with the Bank on key transport sector policies with special emphasis on the progress of:
(i) step-by-step modernization planned by the railways;
(ii) improvement in the inter-modal allocation of traffic in international trade; and
(iii) gradual reduction of subsidy in the transport sector.
The preliminary draft of the transport sector memorandum (February 1983) already circulated and discussed with the concerned agencies of the Government will be expanded on the basis of the latest developments for further dialogue with the Government. D. Bank Group Transport Sector Operations in Hungary
1.16 The proposed project will be the first in the transport sector. It addresses critical transport bottlenecks and will contribute significantly to improvement of foreign currency earnings, modernization of transport operations and energy conservation. II. RAILWAYS AND HIGHWAYS SUBSECTORS
A. Railways
Organization
2.01 Hungarian State Railways (MAV) is a "Self-dependent Enterprise" (para. 2.13) headed by a Director General who is appointed by the Minister of Transport. While management of the Railways is by a Management Council, Government approval is required for major matters such as large investments, tariff changes, or foreign loans for railway development. MAV is organized into six regions, headed by Regional Directors, which are further divided for traffic control, commercial and other purposes into 38 territorial units. The Director General, assisted by four deputies (Chart No. 1), is responsible for the efficient management of MAV, for planning its development and is Chairman of the Management Council. This Council consisting of the Deputy Directors General, Regional Directors, Division Chiefs and Trade Union representatives, is responsible for determining railway policy and establishing five-year development plans within the framework of the state plan. The Council meets one or two times per month for overall control of policy and operations.
Railway Property
2.02 Track - MAV operates 7,612 km of line of which 97Z is standard gauge, 14.71 double tracked, and 21% electrified (IBRD map No. 18773 and Table 7). Rail traffic density in the country is relatively high but is concentrated on about 30Z of the network which carries 70% of freight traffic, with the heaviest traffic in the northern industrial part of the country. The track is maiuly 48-54 kg/m rail with welded joints, laid on monoblock reinforced concrete sleepers (64Z) or wooden sleepers (35Z), all with crushed stone ballast. About 651 of the network (standard gauge) is suitable for axle loads of abovc 20 tons per axle, and 38Z is suitable for speeds of 100 km/hr and more. Average rail life is about 22 years. Track is generally in good condition, although the very high traffic density limits the time available for maintenance and track overhaul; shortage of heavy duty track maintenance equipment compounds the problem.
2.03 Signalling and Telecommunications - About 30Z of the open lines are equipped with automatic-line-block signalling, although only 31 of the lines have centralized traffic control. The telecommunications system on main lines is modern and adequate for present needs. There is also radio communication with most main line locomotives and automatic train stops on many main lines.
2.04 Traction and Rolling Stock - The proportion of traffic hauled by electric traction rose from 27S of gross-ton-km (GTKm) in 1970, to 57% in 1983, while diesel traction rose from 371 to 391 during the same period. Steam traction which in 1973 hauled 331 of total GTKm, in 1983 hauled only 1% and will be phased out completely by the end of 1985. Locomotive maintenance facilities are relatively good and the standard of repairs is high. For the improvement of locomotive availability, a very important need exists for imported spare parts, for additional workshop equipment and skilled staff. Total capacity of the wagon fleet was increased by intensive reconstruction completed in 1980. More than 79% of the fleet is less than 20 years old, 20.51 is between 20 and 40 years old and only 0.51 of the fleet is over 40 years old. The fleet is in relatively good condition. - 8 -
2.05 Marshalling Yards - There are 17 marshalling yards, four of which are major mechanized yards but with obsolete equipment. Even in the three large yards which comprise the Budapest junction and handle 80% of the total traffic volume or about 5,000 wagons a day, skids are used instead of secondary retarders. The brake systems in the yards are frequently defective leading to damage from runaway waggons and accidents. The marshalling yard Budapest-Ferencvaros,a part of this junction, has a key role in the Hungarian railway transport system. It will be improved by the proposed project while the role of the other two yards will be minimized (Para. 4.09).
Operations
2.06 The operational efficiency of MAV is generally high and in 1982, its traffic density, 8.95 million gross-tons per route-km, was one of the highest in Europe (Table 8). Staff productivity (para. 2.12) is also high. In certain respects however, principally utilization of freight cars, MAV's performance has declined in recent years and, as part of the Bank project, all aspects of operational performance are therefore to be addressed by an Action Plan (Annex 1) which would be carefully monitored during supervision of the project (para. 3.29).
2.07 MAV's availability figures for traction and rolling stock, which give an indication of maintenance efficiency, are satisfactory. Availability in 1983 was: passenger coaches 93%; wagons 90%; diesel locomotives 79% and electric locomotives 82%. The Action Plan is expected to provide for raising this last figure. The comparatively low availability of diesel locomotives results from a policy of overhauling only part of the diesel fleet, much of which is nearing the end of its useful life, while retaining it as a strategic reserve. Utilization of electric locomotives, measured by engine-km per engine-day, has risen during the 1978-83 period from 462 to 480 for passenger and from 319 to 353 for freight traffic, while for diesel locomotives, eng4-.-km per engine-day dropped from 345 to 332 for passenger and 229 to 219 for freight traffic. The lower diesel utilization is due to the elimination of diesel traction on long haul main trunk routes, while it continues to be used on shorter and lower density secondary routes and for stand-by purposes.
2.08 Average wagon capacity rose by 8% during 1978-83, performance was 73 km/day in 1983. However, turnaround time for wagons increased from 3.65 days in 1978 to 4.35 days in 1983. Analysis shows that while this increase stemmed in part from longer times in marshalling yards due to shortage of yard capacity, the principal cause was longer terminal times which increased by approximately 50% during 1978-83. The proposed project supports marshalling yard investments that will improve yard handling time. Increased wagon holding times at terminals (for loading and unloading operations) resulted both from legislation shortening the working week in Hungary, which reduced weekend loading and unloading, ana from a lack of adequate equipment and facilities in major stations and terninals. The government has now started to implement measures to remedy this situation by authorizing bonus payments for weekend loading and unloading, also heavier penalties for wagons which are held over for more than permissible periods. This is expected to improve wagon turnaround time during the project period. 2.09 Container Traffic - The development of railway container traffic started in 1969 and, to date, MAV has 30 railway stations suitable for receiving and loading containers. Container traffic in 1983 comprised about, 353,000 units (Table 9) carrying 2.1 million tons of the most expensively rated goods. MAV places great emphasis on the expansion of container traffic in conjunction with other transport modes and plans to increase traffic volume carried by container to about four million tons by 1990. Container handling equipment is included in the proposed project (para. 3.06).
2.10 Ma_ntenance Equipment - Track is generally well maintained but a lack of modern track maintenance and renewal equipment makes it increasingly difficult to maintain this standard. About 70% of MAV's track machinery has outlived its normal useful life. The proposed project would provide equipment (para. 3.05), including staff training by the manufacturers, to help overcome the problem.
Uneconomic Lines and Services
2.11 MAV, having closed 1,400 km of uneconomic lines during the last 15 years, is aware of the need to concentrate on those services which it can provide efficiently and which are financially more profitable. A major review of another 600 km of possibly uneconomic lines has been completed from which decisions regarding either total closure, cost reduction measures or phasing out passenger services are expected not later than December 1986 (Table 6 and para. 1.10). The methodology and criteria used for review of uneconomic lines are sound.
Staff and Productivity
2.12 The management and staff of MAV are technically well-qualified and competent, but there is a shortage of qualified semi-skilled staff and technicians. The number of staff has been reduced by about 12% from 150,000 in 1970 to 132,200 in 1983. Productivity measured by traffic units per employee declined during the period 1978-83 by about 5%, principally because of the reduction in passenger traffic during this period, but the figure of 259,700 traffic units per employee in 1983 still compares favorably with other railways. The modest increases in traffic forecast for the project period together with planned staff reduction are forecast to bring about a 10% increase in productivity by 1990 (Table 10).
Railway Tariffs
2.13 MAV is considered a "Self Dependent Enterprise" with the responsibility to recover costs from revenues. Nevertheless its charges are subject to the approval of the Governments Board of Pricing. Revenues from freight traffic cover all related costs. The shortfall on passenger fares is met by a subvention as the Government does not want to raise suburban passenger fares to a level which would cover full costs because of the implications of transferring passengers to road transport with the additional costs of urban congestion (para. 5.02). MAV is primarily a hauler of freight. - 10 -
The Railway's Investment Plan (1986-90)
2.14 MAV's 1986-90 draft Investment Plan (Table 5 and IBRD Map 18773) is primarily a rehabilitationplan which concentrates on operating cost reduction and on safety oriented investments, rather than on investments in capacity expansion, traction and rolling stock. Railway investments are expected to account for 427 of the total investments in the transport sector during the next plan period. Emphasis is initially on early completion of ongoing projects, while only later in the plan period will new projects, mostly track renewal, signalling with telecommunications,and electrification of main lines with heavy traffic density, be undertaken.
2.15 The principal components of MAV's 1986-90 Investment Plan are also given in sunmuaryin Table 2.1. Investment cost estimates are based on prices of manufactured goods in Hungary and border prices (1984) for imports. Costs include a physical contingency allowance of 10% for infrastructure items and price contingencies based on official escalation factors of 5% per annum. Unit prices for infrastructure items are generally in line with international prices but prices for rolling stock, all of which will be procured from eastern European countries, are lower than world prices, by 30Z or more.
2.16 Track rehabilitation and junction reconstruction represents about 40Z of the total planned investments. Track to be rehabilitated includes ten high priority lines. These have an average age of superstructure of 22 years and have carried a cumulative total gross-tonnage (since the last track overhaul) of 100 to 370 million gross tons. This work is essential for the efficient utilization of traction and rolling stock. Proposed investments for the modernization of signalling and telecommunications, which represent about 8% of the Investment Plan, will eliminate serious bottlenecks by replacing equipment which is obsolete and inadequate for the efficient operation of important stations and junctions. Proposed investments in railway electrification comprise about 3% of the investment plan and include a significant portion of the. main line from Budapest to Gyekenes (near the Yugoslav border) where traffic density is about 30 million gross tons per year with, during summer months, about 50 pairs of passenger trains per day. Other short sections proposed for electrificationhave been selected to maintain the integrity and continuity of the electrified network, thus avoiding uneconomic changes of traction. Less than 16% of the total investment costs are for traction and rolling stock. Capacity expansion investments, consisting of line doubling on short stretches (111 km) and by-pass and cut-offs (39km), represent 9X of the proposed investments and will relieve congestion on main lines. The proposals are economically and operationally sound. - 11 -
Table 2.1: Summaryof RailwayInvestment Plan (1986-90) Ft mill. US$ mill. 2 of Total
(1) Rehabilitationof Existing Network -Track Rehabilitation(1,039 km) 11,933 256.6 23.6 -Electrificationof Lines (304 km) 1,785 38.4 3.4 -Signallingand Telecommuni- cation (372 km) 3,883 83.5 7.7 -Reconstructionof Junctions and Stations 8.150 175.3 16.1 -Bridges,Sidings, Substructure, and Other 3,491 75.1 6.9
29,242 628.9 57.7
(2) New Lines (39 km) 1,788 38.5 3.5
(3) Line Doubling(111 km) 2,620 56.4 5.2
(4) Tractionand RollingStock 7,913 170.2 15.6
(5) Other CapacityImprovement. (Workshops,Loco-Depots, MaintenanceEquipment, etc.) 9,087 195.3 18.0
TOTAL 50.650 1,089.3 100.0
2.17 The railwayinvestment program is responsiveto the country's needs. The Governmentrecognizes the benefits to be gained,in future investmentplan design,from a thoroughstudy of MAV's future needs, particularlyin the light of emerging patterns of freight traffic. The study should be coupled with a study of requirementsin terminalfacilities. The Bank and the Government have agreed to continue to maintain a dialogue on the subject during implementationof the proposedproject.
FinancingPlan
2.18 Except for a small Governmentgrant and the proposedBank Loan, funds for MAV's investmentsthrough the period 1985-89will be provided from MAV's internal resourceswith 70% of these resources generated from deprer-ation provisions(para. 5.09). - 12 -
B. Highways
Organization
2.19 The Ministry of Transport (MOT), whose organization is shown in Chart 2, has overall responsibilityfor all transportmodes and is directly responsiblefor the National Road Network infrastructure.The Public Roads Department (PRD), has responsibilityfor operationand maintenance of all national roads, bridges and motorways. It sets standards, approves and coordinatesregional work programs and assigns work to various specialist organizations. Detailed engineeringand constructionsupervision for major PRD force accourt work (mostly road maintenanceand operationactivities) is managed by nine Public Road Management Centers (PRMC) which control nineteen Maintenan:eCoordination Centers (MCC). Seven of the PRMC's have quality controlsections whose responsibilitiesinclude quality control of all work on national roads as well as of constructionwork on local roads. The Budapest PRMC is also responsiblefor maintenanceof motorways (Motorway Management Section). Funds for maintenanceare releasedby The NationalBank of Hungary (NBH) which maintains the accounts.
2.20 Infrastructure investment proposals are evaluated by the Technical Development Department (TDD) of NOT which makes recommendations to MOT management. TDD works closely with the NPO in providingtechnical assistance and planning inputs to MAV and road transport companies in preparation of five-year and annual programs which they subsequently review. TDD also eontracts engineering design firms for new roadworks and a road investment company (para. 2.24) to manage and supervise construction contracts. Capital investment funds are channeled to TDD through the State Development Bank (SDB) which opens a separate account for each contract, effects payments and maintains project accounts.
Planning
2.21 Highway planning takes into considerationthe road transportdemands which would result from the Government's five year plans as well as measured traffic growth and periodic origin-destination census results. Traffic censuses were started in Hungary in the 1950's with about 100 census stations operated regularly to provide classification and hourly, weekly, and seasonal variation data. Formerly, each five years a larger census was conducted at 4600 census points, to cover all roads. Since 1980, more modern equipment has been introduced and a rotation system of counting on a third of the network each year has been adopted. Traffic forecasting and assignment is performed on a computer model which is multi-modal, using growth assumptions which are realistic. An important basic planning input comes from a road inventory and sufficiency survey which was first taken in 1979 and which hp' since been regularly updated and improved. This has served as the basis of a program of road rehabilitation/widening/pavement-strengthening which together with road maintenance, accounts for the greater part of road expenditure. Other road improvements are part of long term development programs, the fourth of which is under preparation. The rationale underlying the total plan is to support energy conservation by (i) providing adequate capacity on the existing roads - 13 -
(adding new traffic lanes and constructing bypasses at larger villages and towns), (ii) constructing high speed motorways on routes carrying international traffic (once traffic volumes justify such construction), and (iii) constructing some "short-cuts" where there is sufficient traffic demand. Capacity is calculated in terms of passenger car units (pcu) with heavy vehicles assigned a weight of 2.5 pcu's. Maximum acceptable traffic volumes are given in Table 11. Design traffic is taken as the 50th or 1OCth highest hour of forecast weekday traffic, depending on the importance of the road. More frequent weekend traffic congestion is considered acceptable. The motorway construction program, including the M-O motorway (Budapest ring road) which is supported by the proposed project, is a high priority improvement in this latest long-term plan.
Engineering
2.22 For over 20 years, all motorway and highway bridge engineering in Hungary has been performed by UVATERV under contract to'MOT, The quality of its highway engineering work is up to international standards and the company, which does about 40% of its work volume outside Hungary, has considerable experience in bridge design in Hungary and abroad. A number of smaller highway design offices tiroughout the country deal with local roads. Table 12 presents main geometric standards used in Hungary which, for motorways, conform to or surpass requirements established by the council for the TransEuropean Motorways (TEM). Pavement design methods are up to date and bridge design loadings conform to European practice. Interchanges for limited access highways are conventionally designed in accordance with western European practice to minimize land acquisition. Technical specifications for construction and materials are part of a 17 volume set of national specifications. A single set of specifications for road works and bridge construction is being assembled for the proposed project.
Construction
2.23 Major roads and bridges in Hungary have been constructed by five state-owned contractors which recently have been competing for jobs outside the country against international competition. Operation of the companies is fully detached from MOT control. For minor road projects, local competitive bidding between these companies and 12 smaller contractors was only recently introduced and experience with the Bank's ICB procedures will have an important impact on evolution of the local bidding systems. The contractors may purchase locally manufactured equipment but exchange control requirements limit imports from western countries. Contractors' work quality is satisfactory. Contractors are required to issue a work quality certificate upon completion of a contract and are responsible for repairing or replacing defective work for a defined period after completion.
2.24 MOT contracts management and supervision of large construction projects to UTIBER, an investment management company which specializes in transportation projects. UTIBER's responsibilities include all fieldwork in connection with expropriation and land acquisition, control of conformance with plans specifications, measurement of work quantities and approval of contractors' invoices for payments. UTIBER also provides financial management and is responsible for keeping project cost under a stipulated limit (102 contingency). Within this limit, it is authorized to make minor design changes. - 14 -
The Network
2.25 The total Hungarian road network (Table 13) is divided by maintenance responsibility into: (i) the National Roads, which are maintained by PRD (about 30,000 km, mostly paved); (ii) Local Public Roads, which are maintained by county councils (about 58,000 km and 70% paved); and (iii) Agricultural and Forestry Roads, which are maintained by state farms, agricultural cooperatives and forestry organizations (about 50,000 km and 301 paved in 1980). The main roads of the national road network radiate from Budapest (IBRD Map 18773), the most populous city and principal traffic generator. Six of the eight bridges across the Danube are within the city and the steady growth of highway traffic (including transit traffic) across the river has led to rapidly growing congestion (para. 4.12). The Motorways M-1, M-5 and M-7 which the M-0 ringroad (IBRD Map 18773, inset ) will eventually connect (bypassing Budapest), are important links in the TEM system, which will eventually connect western and northern European countries with the Balkans and Middle East. The Bank is providing financial assistance for construction of other sections of the TEM network in Yugoslavia, Turkey and Romania. For international traffic using the network, passage through Budapest is considered to be one of the most critical bottlenecks.
Maintenance
2.26 Maintenance of National Roads is effectively organized and well managed. Part of the technical assistance under the proposed project would serve to familiarize PRD technical staff with state-of-the-art progress in pavement management and recent developments of improved maintenance techniques. On the Motorways, providing for safe vehicle operation is stressed and patroling inspection vehicles keep constant radio contact with a motorway maintenance center. One inspection trip per day is used to note tasks which then become part of daily work programs of crews and equipment assigned for minor repairs. Other crews work on pre-planned preventive maintenance or major repair works. There is a similar but less intensive program of regular inspections of other public roads. Each maintenance sub-center has a standard group of equipment and there is a heavy dependance on machines from western European countries to deal with disruption caused by winter weather conditions, particularly on the more densely travelled roads and motorways. Because of serious winter traffic disruption in recent years, PRD proposes to acquire higher-powered machines, stationed at several strategic locations, capable of moving quickly to provide emergency ice and snow removal assistance. Purchase of this equipment would be financed under the proposed project.
Equipment and Workshops
2.27 MOT's equipment inventory lists about 9000 units of equipment, plant, vehicles, attachments and tools of which about a third are road vehicles and another third are equipment and attachments used for road maintenance and improvements. The average age of the equipment is about seven years but due to convertible currency constraints, which have affected regular renewal of this equipment, a major part of the multi-purpose truck fleet (102 west - 15 -
European units which with their attachments serve as a main-stay of paved road maintenance activities) averages over ten years old. MOT records indicate that 11-12 year old machines are requiring an average of 380 workshop hours annually, compared to 170 hours for units two to three years old; at four times the annual costs. The workshop system supporting the maintenance and repair of equipment is based on different levels of repair by progressively larger and better equipped workshops. Each of 96 Maintenance Sub-centre (MSC) has its workshop and mobile service trucks for preventive maintenance and minor repairs while each MCC has larger workshops capable of heavier repairs.
Traffic Regulation and Safety
2.28 MOT operates weight control stations at points of entry into Hungary and on motorways as well as having mobile weight control teams. Allowable axle loads are ten tons for single axles and 16 tons for double-axles, while maximum allowable truck weight is 38 tons. This conforms to the TEM Council requirements, and constitutes the loading for which new motorway pavement and pavement strengthening on older roads are dimensioned. Trucks operating with higher axle loads pay a fee and are restricted to assigned routes (Table 14). Maximum vehicle dimensions conform to European council standards. MOT collects and analyses accident statistics and is the author of the Hungarian highway code. A comparison of accident rates shows Hungary to be at about the halfway mark for a group of European comparator countries (close to United Kingdom figures) but with total accidents substantially above the best road safety records. One part of the technical assistance in the proposed project provides for Hungarian specialists to review measures bejng taken by other countries to reduce accident rates.
The Highway Investment Plan (1986-90)
2.29 Table 15 compares past and proposed expenditures on roads in Hungary while Table 16 shows a breakdown of proposed expenditures during the Seventh Five-Year Plan period (1986-1990). Average total expenditure for roads is slightly less than US$300 million per year during the 1981-85 period with about 55S going For National Roads (30,000 km) and 45% for local council roads (58,000 km), a proportion which would be essentially maintained during the 1986-1990 period. The proportion of funds allocated to new construction and improvement of national roads (30Z), compared to road maintenance and pavement reinforcement (70%) is reasonable and provides an adequate allowance of about $4,000 per kilometer each year for the maintenance/pavement-reinforcement operations. Well maintained roads play an important role in keeping fuel consumption low.
2.30 The effect of financial constraints during the 1981-85 period is --parent in the sharp reduction of investment which took place in new road construction, including motorways. In the 1986-1990 period the Government proposes to resume investment in the motorway system while keeping other road improvements at a rather low level until 1989-1990 when a number of new bridges would be constructed and approach roads upgraded. The motorway program will result in completion of the M-1 section between Budapest and Gyor in 1986; opening of one roadway (four-lane, half-motorway) of the M-5 as far - 16 -
as Orkeny (52 km from Budapest) by the end of 1985 with the next section to Kecskemet (km 75) completed to the same standard by 1987. By 1988, the 45 kilometers section closest to Budapest of the second roadway of the M-5 will be opened to traffic followed in 1990 by the remaining 30 kilometers to Kecskemet. Meanwhile construction of the first phase of the M-O bypass with the major bridges across the two channels of the Danube, which is included under the proposed project, is expected to be completed by 1990, with the full connection to the M-7 and M-1 programmed for construction during the subsequent five-year plan period (1991-1995).
C. Hungarocamion
Organization
2.31 Hungarocamion (HC) was established on January 1, 1966, for the purpose of satisfying the demands of home and foreign customers with quick, efficient and reliable international road transportation. The company is headed by a General Manager and the organization of the company (Chart No. 3) is functional in character. The General Manager, as part of his normal duties, directly controls the department of international relations and the legal section. A computer center was established in 1980 in order to introduce computerized control of movements of cargo and vehicles and to apply computer techniques to other processes. The company has two affiliates in Europe, namely, the Pelkar Transport GmbH in Austria, and Eurocar Spa in Italy, nine offices at different Hungarian border crossing points and maintains representatives in 20 big cities of 16 countries.
Operation and Fleet
2.32 HC has gone through a dynamic development period during its 19 year life. At the time of its establishment HC possessed only 357 small capacity vehicles (Skoda, Csepel, Saurer). Today, the truck fleet has more than quadrupled (Table 17) and its capacity has increased six times during this period by adding to the fleet higher capacity modern units (Table 18) suited for international freighting. The average annual vehicle utilization is high and has shown a gradual improvement over the years (Table 19). Selected operational statistics indicate that the road safety co-efficients of the company are commendable. Staff productivity has been rising and average travel distance has fluctuated between 1400 and 1600 km (Table 20). HC's load factors per return journey on Western Europe routes are between 90 and 95%; on Middle East routes 50%; on North African routes about 65%. Average vehicle utilization is about 225 days/year. The load factors and vehicle utilization indicators are above average when compared with current Western European operational statistics.
Investment Plan (1986-90) and Development Strategy
2.33 Investment policy of HC in recent times is primarily aimed at achieving two main objectives which are to increase foreign exchange earnings through the development and modernization of its vehicle fleet and to increase operational efficiency by making urgently needed infrastructure improvements, - 17 - namely, electronic information and control systems, maintenance shop modernization, inventory control system and additional container handling equipment. The investme.t plan (Table 21) for augmenting the vehicle fleet and infrastructure facilities takes into account market structure, likely growth of Hungarian exports (especially food stuff, live animals, clothes and furniture), unfavorable road cunditions especially in the Middle East, fuel efficiency and optimum utilization of loading capacity. HCs' draft investment proposals are task oriented, realistic and responsive to the critical need for improving inter-modal balance .n international trade.
Pricing and Finance
2.34 HC is an enterprise whitn is free to fix its rates according to market forces without upper or lower limit. As a result, HC competes successfully in the international freight haulage market with export/import traffic comprising about 80Z of its ton-km in 1983 and transit traffic about 20%. Actual costs of most regular journeys are calculated at least quarterly, by the Financial and Costing Department, taking into account weight and distance, the type of load, standard of roads traversed, frontiers crossed (with consequent waiting time), international charges to be met, terminal times, etc. Rates are determined by the Commercial Department and are varied by back-haul possibilities or agreements, while back-haul rates themselves are carefully calculated to keep empty running to a minimum and to take advantage of any suitable traffic which may be available. Much of the transit traffic carried by HC from Western Europe to the Middle East originates as back-haul.
2.35 HC is responsible to MOT for the operation of its business and its proposed annual business plan is approved by the Undersecretary of State of MOT (para. 5.12) to whom HC must report annually upon the outcome of its plan, both operationally and financially. HC's internal resources are adequate for the financing of their replacement vehicles and for other capital expenditure needs, including local delivery vehicles, but for the development element of their investment plan - 550 modern, fuel efficient, high capacity vehicles - they will rely entirely upon the proposed Bank loan and co-financing arrangements. Net internal resources will finance 61% of HC's investment needs during the plan period (para. 5.16 and Table 5.9). - 18 -
III. THE PROJECT
A. Obiectives
3.01 The selection of project componentshad as objectivesthe provision of support to the Government'spolicies aimed at increasingthe efficiencyof the transport sector, increasing convertible currency foreign exchange earningsand conservingenergy. At the same time the proposedBank financing would provide strong support for the highest priorityneeds of the transport sector as a whole, while bringing to the forefrontimportant institutional and policy matters such as user contributionsto road expendituresand optimum utilization of the road network, future trends in cargo transport (containerization,palletization, road-rail interface) and improvement of inter-modaldistribution of internationaltraffic. The project would also provide for technology transfer, and all the elements taken together would stronglyinfluence the futuredevelopment of the sector.
3.02 To achieve these broad objectives,the proposed multi-modalproject would specifically seek to:
(i) ease critical transport bottlenecks on Hungary's princ-- pal highway and railway networks, vital to international trade, export earningsand energy conservation;
,(ii) increase efficiency and cost-effectivenessin having timely, essentialmaintenance performed on the arterialroad and railway networks, to sustain the developmentof all sectors of the economyand conserveenergy;
(iii) assist in the modernizationand expansion of road transport engaged in internationalfreight traffic and improve road/rail interface facilitiesto stimulate efficiency,fuel conservation and exportearnings;
(iv) direct attention to crucial transport issues as the basis for continuingconstructive dialogue between the Bank and responsible transportauthorities; and
(v) help familiarizethe railwayand highwayorganizations staff with recent developmentsand expected trends in transport related technology,transport operations and monitoringmethods.
B. Description
3.03 The proposed project's componentscover railways,highways, and the international trucking company HC. The project also includes two major studies and training programs. All are of high priority and are either already included in the 1981-85 Investment Plan or the proposed 1986-90 Investment Plan. The data used in the preparation of the project and the - 19 - source material are listed in Annex 6. The components are summarized below and described subsequently in more detail, they are:
Railway Components
Ci) A modernization program for the out-dated Ferencvaros (East) marshalling yard in Budapest;
(ii) Acquisition of track renewal and maintenance equipmentz
(iii) Equipment acquisition to up-grade interface facilities between rail and road at five container terminals; and
(iv) Training of railway personnel to familiarize them, inter alia, with recent developments in traffic operations and engineering practices;
Highway Components
(i) Construction of the first phase (14.2 km) of a 28 km new, four-lane by-pass (Motorway M-0) of Budapest city.
(ii) Acquisition of equipment for (a) maintenance of national roads, including motorways, (b) pavement management, (c) road safety, and (d) road construction quality control; and
(iii) Training of personnel to familiarize them with reeent development and trends in traffic safety and pavement management.
HC Components
(i) Acquisition of lighter, larger capacity, fuel efficient, and longer life vehicles;
(ii) Acquisition of supporting, information systems and maintenance workshop equipment.
Technical Studies
(i) A study of the present system of contribution by the road users towards road expenditures; and
(ii) Studies related to modernized management and operation of international trucking operations.
Railway Components
3-04 Modernization and reconstruction of Ferenevaros-East Marshalling Yard. Budapest's-Ferencvaros marshalling yard is a key Hungarian railway transport facility handling about 80% of the total freight traffic volume passing through Budapest. The proposed modernization and reconstruction would
I - 20 - consist of ti) reconstruction of 29 existing and construction of 3 additional tracks in the distribution group, including a second exit track; (ii) installing a new braking system allowing continuous wagon speed control, signalling and teleconmomications equipment; (iii) reconstructing a track tower and constructing overhead contact line for electric traction; and (iv) reconstruction of the existing hump and Ilatos bridge. Bank assistance would cover direct foreign exchange cost of the distribution groups secondary continuous braking and speed regulating equipment (Table 22). The modernization is expected to increase the capacity and efficiency of the marshalling yard (para. 4.09).
3.05 Track renewal and maintenance equipment (Table 22). To maintain the required track standard, MAV needs sufficient capacity to renew 260-300 kilometers of track annually. About 70Z of MAV's equipment, used for this type of work, is over ten years old and has outlived its normal useful life. Replacement and modernization of the low-efficiency, limited-capacity track equipment is a high priority item in the next five-year plan period. Bank assistance will cover the direct foreign exchange cost of a group of ballast cleaning and profiling machines, tamping and levelling equipment, sleeper changing and small machinery.
3.06 Container Handling Equipment (Table 22). MAV's capacity to meet container traffic demand is severely constrained by inadequate facilities and container handling equipment in its terminals. Five container terminals (IBRD Map 18773) have been selected on a priority basis for a program of improvement t9 give better inter-modal transport coordination by, specifically, quicker turnaround, reduced damage of goods and improved quality of service. The equipment which would be financed under the proposed loan would include front and side loading trucks, self-loading saddle-tractors and mobile container cranes with. grips.
3.07 Training Program (Table 23). Tc ensure the objectives of improved marshalling yard and terminal operations, management of track renewal and maintenance, and traffic control, complementary training and technical assistance will be needed. The Bank assistance provides for about 27 man-months of railway middle management and specialists training, estimated to cost about US$90,000 through "twinning" arrangements with other European railways engaged in similar work.
Highway Components
3.08 Civil worKs: construction of the first phase (14.2 km) of a future 28 km section of motorway M-0, (IBRD Map 18773) which would interconnect the radial motorways M-1, M-7 and M-5 while bypassing to the south of Budapest. Two major, four-lane bridges across the main channel (950 ~meters)and Soroksari channel (500 meters) of the Danube river would account for about 40X of the estimated cost of the works which would also include construction of five interchanges and six grade separations. The section would extend from a junction with the M-5 motorway to a junction with Route 6, which runs just west of, and roughly parallel to, the Danube River. Caly one roadway of the future divided highway, paved to carry four-lanes of traffic, would be constructed at this time. The project would include construction of the M-0 motorway maintenance center on the island between the two river branches. Principal characteristics and construction quantities for the project are given in Table 24. - 21 -
3.09 Road Maintenance Equipment (Table 25). MOT has recently replaced a number of its older multi-purpose trucks purchased from convertible currency countries, however, additional replacements will be needed in 1988 and 1989. Also, in order to avoid repetitions of serious traffic disruptions of unacceptable durations which have occurred in recent years, due to heavy snowfalls in unexpected areas of the country, PRD is proposing to equip four special groups with faster, higher-capacity equipment capable of providing emergency assistance from strategic locations. The Bank loan would cover the direct foreign exchange cost of this equipment.
3.10 Equipment for Pavement Management, Road Safety and Quality Control (Table 25). MOT tries to keep abreast of technological developments, particularly in the western world countries. After familiarization of Hungarian technical staff, as part of the training program (para. 3.11) with systems in operation in other countries, the tentative list of equipment would be reviewed with the Bank (para. 3.33). The goals sought are (i) to improve pavement management by acquiring a specially equipped vehicle to inventory and record road and pavement characteristics and condition; (ii) to obtain state of the art equipment for forecasting freezing conditions on bridge decks and determining permeability of deck slabs to water and road salt solutions; and (iii) to obtain non-destructive testing equipment for construction quality control.
3.11 Training Program (Table 23). The proposed training would provide technical staff with familiarization with recent developments and equipment in the fields of traffic safety, pavement maintenance, renewal and management. MOT is also interested in improving its knowledge of such diverse fields as competitive bidding procedures, organization and supervision of construction, decision-making techniques and consulting engineering activities. The Bank loan would finance direct foreign exchange costs (about US$260,000) of sending Hungarian technicians abroad (about 80 man-months) for short programs of study. In addition, the project would finance about five man-months of foreign consultancy assistance (about US$50,000) to help produce suitable English language, technical specifications for ICB (para. 3.20).
Hungarocamion (HC)
3.12 Fleet Modernization and Expansion (Table 26). In spite of technical shortcomings of about 48% of HC's fleet, good operations management gives the company an edge in the highly competitive Western and Eastern European markets. HC's program of fleet replacement (Table 21) would be self-financed. The proposed Bank loan would finance about 40% of the direct foreign exchange cost of the fleet development program consisting of: acquisition of increased carrying capacity (from 15% to 20%), improved fuel efficiency (about 15%) and longer life (about 30%) trucks.
3.13 Supporting Information Systems and Workshop Equipment (Table 26). To maintain the expanding truck fleet and increase HC's management and workshop efficiency, additional equipment would be acquired. The Bank loan would finance the direct foreign exchange cost. - 22 -
Studies
3.14 User Contributions to Road Expenditures. The project would include a study of the present system of contribution by the road users towards road expenditures and optimum utilization of the road network, to be carried out by the Hungarian Institute of Transport Science (KTI) and local consultants. This study would throw light on factors contributing to the inter-modal traffic pattern, which is currently skewed in favor of railways, with a view to investigating subsidies, user charges and pricing policy. The management and staff of KTI are technically well qualified and competent. Terms of Reference (Annex 2) for the study were discussed during negotiations and agreement was reached with the Government that the study would be initiated not later than January 1, 1986 and completed by December 31, 1987.
3.15 Trucking Management Systems Studies and Related Training (Table 23). Studies for HC by Hungarian consultants supported by foreign experts would cover the following management related aspects of international trucking operations, namely: (i) information system requirements (hardware and software); (ii) international marketing; (iii) development of container services; and (iv) development of truck terminal facilities, near Budapest. It was agreed with the Government during loan negotiations that these studies would be initiated before January 1, 1986 and completed by December 31, 1987 using Terms of Reference (Annex 3) satisfactory to the Bank. The Bank loan would cover the cost (about US$115,000) of an estimated 6 man-months of international consultancy assistance including software acquisition, as well as a provision (US$35,000) for technical visits abroad by HC staff in connection with these technical studies
C. Cost Estimates
3.16 Project costs by component are summarized in Table 3.1. Cost estimates were prepared by the agencies concerned, and consultants to MOT, on the basis of quantity estimates from substantially completed detailed engineering. Unit prices were based on quotations and experience on similar works, updated to mid-1984 prices. The direct foreign exchange component for civil works was estimated at 35Z of contract cost on the basis of direct imports at international prices. This is consistent with estimates for similar works on projects in neighboring countries. The total foreign exchange component (direct and indirect) of civil works was estimated at about 45%. The total estimated project cost (including all contingencies) is US$215.5 million with an estimated foreign exchange component of about US$119.7 million, including physical contingencies of 13X of the costs of modernization of the Ferencvaros marshalling yard and 10 of the costs of highway civil works and c-nstruction supervision. Price contingencies are based on cost escalation as shown in footnote to Table 3.1. With contingencies included, the railway component was estimated at US$71.2 million; highway component at US$103.0 million and road transport (HC) component at US$41.3 million, all including a total of US$1.2 million for training and technical assistance. Taxes and duties were estimated to amount to about 20% of total project cost consisting principally of duties on imported equipment. - 23 -
Table 3.1; Project Cost Estimates (Mid 1984Prices) 1/
BankLoan Forints(Millions) US$ (Millions) FECS US$ Local Foreign Total Local Foreign Total of Total Million Railway CoMponent a. Modernization of Ferencvaros Marshalling Yard 798.3 347.0 1.145.3 17.2 7.5 24.7 30 4.8 b. Track Renewaland Maintenanceequipment 220.0 515.0 735.0 4.7 11.1 15.8 70 7.7 c. Container Handling Equip. 339.6 288.0 627.6 7.3 6.2 13.5 46 3.8 d. Training Program 4.7 5.7 10.4 0.1 0.1 0.2 _50 0.1 Subtotal 1,362.6 1.155.7 2.518.3 29.3 24.9 54.2 46 16.4
HighwayCswoonent a. CivilWorks M-0 Motorway (Km 13.9- Km 2B.1) 1.646.1 1,343.9 2.990.0 35.4 28.9 64.3 45 22.5 b. Construction Supervision 111.6 18.6 130.2 2.4 0.4 2.8 14 0.1 c. MaintenanceEquipment 18.6 106.9 125.5 0.4 2.3 2.7 85 2.3 d. Testing & Evaluation Equip. 4.6 41.9 46.5 0.1 0.9 1.0 90 0.9 e. TrainingProgram 9.3 13.9 23.2 0.2 0.3 0.5 60 0.3 f. Studyof RoadUsers Contribution 4.7 0.0 4.7 0.1 0.0 0.1 0 0.0 Subtotal 1,794.9 1,525.2 3,320.1 38.6 32.8 71.4 46 26.1
HungarocauiOn a. Vehicles - 1,395.0 1,395.0 - 30.0 30.0 100 12.0 b. WorkshopEquipment - 41.6 41.6 - 0.9 0.9 100 0.9 c. ManagementStudies & Training 14.0 4.6 18.6 0.3 0.1 0.4 25 0.1 Subtotal 14.0 1,441.2 1,455.2 0.3 31.0 31.3 99 13.0
TotalBase Cost 3,171.5 4.122.1 7.293.6 68.2 88.7 156.9 56 55.5
PhysicalContingencies (10S-13%) Railway 111.6 41.9 153.5 2.4 0.9 3.3 - 0.6 Highway 172.1 135.0 307.1 3.7 2.9 6.6 - 2.2 Total 283.7 176.9 460.6 6.1 3.8 9.9 38 2.8
Price Contingencies2/ Railway 358.0 279.0 637.0 7.7 6.0 13.7 - 4.0 Highway 641.9 520.9 1,162.8 13.8 11.2 25.0 - 8.7 Hungarocamion 0.0 465.0 465.0 0.0 10.0 10.0 _ 4.0 Total 999.9 1,264.9 2,264.8 21.5 27.2 48.7 55 16.7
Total 4,455.1 5,563.9 10,019.0 95.8 119.7 215.5 56 75.0
1/ Exchangerate US$1.0- Forints 46.5 2/ Basedon the following annual inflation rates of (in percentageterms): 1984 1985 1986 1987 1988 1989 1990 Local Costs 8.5 8.0 7.0 7.0 7.0 6.5 6.5 Foreign Costs -2.8 5.0 7.5 8.0 8.0 8.0 8.0
Taxesand Duties: Railway ComponentAverage 251: Braking Equipment21%; Track MaintenanceEquipment, 32%; and Container Handling Equipment15%. HighwayComponent Average 17%; Civil Works17%. Equipment 15t-40%. Project Total: about 201.
43850 - 24 -
3.17 The proposed Bank loan of US$75.0 million would cover the direct foreign exchange cost of the railway equipment and training, (US$21.0 million). It would cover 35% of the highway civil works cost, and the full direct foreign exchange cost of the highway maintenance, quality control and pavement management equipment and of training, (US$37.0 million). Also about 401 of the direct foreign exchange cost of HC's vehicle component and the entire foreign costs of workshop equipment, management studies and training (US$17.0 million) would be financed by the Bank's loan.
D. Engineering
3.18 Detailed engineering for both railway and highway works is substantially complete and is satisfactory. Designs for the railway marshalling yard were prepared by the railway planning institute, which prepares all detailed engineering and studies for MAV, to Hungarian Railway Standards (Annex 4), which conform to International Railway Union (UIC) international standards and are satisfactory. The planning institute is well staffed by competent professionals. Detailed engineering for the M-0 motorway and bridges was prepared by WVATERV (para 2.22) and has received official approval from MOT including the 2.8 km section closest to the junction with the M-5 motorway which, at the Bank's suggestion, was added to the project at the time of appraisal. During negotiations cost estimates were discussed and confirmed with the Government.
E. Financing
3.19 The estimated costs of the project together with proposals for Bank financing are summarized in the table below.
Table 3.2: Project Cost Financing
Balance Total Local Foreign Bank of Funds Project Component Cost Cost Cost Loan Required - --- US$ million --
Railways 71.2 39.4 31.8 21.0 50.2 Highways 103.0 56.1 46.9 37.0 66.0 Hungarocamion 41.3 0.3 41.0 17.0 24.3
215.5 95.8 119.7 75.0 140.5
The balance of funds will be provided as follows; the whole of the US$50.2 million required for the railway component of the project, consisting of US$39.4 million in local costs and US$10.8 million in indirect foreign costs will be met from railway's own internally generated resources. No financing - 25 -
gap exists, therefore,for this component of the project. For the highway component, the Bank loan will finance maintenance equipment, technical assiLtance,and the direct foreign exchange element of the cost of civil works. A financinggap remains of US$66.0million, comprising the local costs (US56.1 million) and indirect foreign costs (US$9.9 million) of the civil works. The HC componentof the project consists almost entirely of direct foreign costs, being the cost of procuringvehicles and equipmentabroad, and after allowing for the Bank's loan of US$17.0 million a financing gap of US$24.3 million remains. The total additional financing required for the project (US$90.3million) is being providedunder B-loan co-financingarranged in conjunctionwith the HungarianFine Chemicalsand Livestockprojects, in an amount of US$420million.
3.20 Retroactivefinancing for professional(foreign) assistance, in an amount of not more than US$50,000, to assist in preparationof technical specificationsand other bid documents for civil works and equipment is included in the project. This will ensure that a complete set of English language technicalspecifications are availablefor the proposed ICB. During loan negotiationsthe progress made in preparing sample bid documents was reviewed by the Bank and although civil works bid document preparationwas lagging that of other project components,it was nonethelesssatisfactory. A procurement seminar in Hungary, by Bank staff, was scheduled for June 1985 to help resolveany outstandingmatters.
F. Implementation
3.21 The investmentmanagement firm UTIBER-' has been engaFed by MOT to provide overall coordinationof all project related activities,to monitor progress and ensure that the various executingagencies comply with reporting requirementand schedules. During negotiationsthe Governmentconfirmed that each executing agency (MAV, HC and MOT) would appoint an officer to:be responsiblefor all project related matters of their componentand to serve as counterpartto UTIBER'scoordination staff. This would be a special condition of loan effectiveness.
3.22 Railway Components: MAV would be responsiblefor implementationof all railway related activities. Its Material Supply Organization would procure the track renewal and maintenancemachinery and container handling equipment,eligible for financing under the loan. The railway marshalling yard improvementworks are being carried out, under traffic,by MELUEPITO,an independently managed enterprise which customarily executes all railway constructionworks. The organizationis well staffed and the quality of its work is good. This improvementprogram will be executed in four phases, namely: Phase I - construction of second exit track; Phase II - construction
1/ UTIBER is customarilyemployed by MOT to manage and supervisemajor civil works contracts (para. 2.24 and 3.23). It is staffed by competent professionalswho have satisfactoryexperience in all aspects of contract management. - 26 -
of departure head; Phase III - reconstructionof hump, bridge and the installationof new braking system; and Phase IV - completionof above and other works and testing. All phases of work will be completedby the end of 1988. During the time of reconstruction,the marshallingyard will operate continuouslyexcept for one month. The supervisionand acceptanceof the work would be the responsibility of MAV's Investment Institute (MAV BERUHAZASI-IRODA)which is well staffed with experiencedgraduate engineers and technicians.
3.23 Highway Components: the Ministry of Transportwould be responsible for managing implementationof the highway components. After reviewing the current Hungarianconstruction practice in regardto availabilityof personnel (professional, technical, skilled and semi-skilled) and materials and discussing legal requirementsfor foreigners working in Hungary, it was concluded that no constraintexisted on a foreign firm working in Hungary. Civil works contracts would, in consequence,be awarded to prequalified contractors,satisfactory to the Bank, after ICB. The number of contract lots is still under consideration. During negotiationsit was agreed with the Government that the proposed number of contract lots would be subject to agreement with the Bank. The project coordinatingfirm UTIBER (para. 3.21) has been designated (under a separate contract) to also manage and supervise construction of civil works, including preparationof bid documents (with consultancy assistance, see para. 3.20), providing assistance to MOT in contractor prequalificationand bid evaluation in addition to normal site supervision.
3.24 Road maintenanceequipment would be procured by MOGURT, a foreign trade company specializingin heavy equipmentpurchase, who would prepare the bid documents and generallymanage the bidding procedures. MOT staff would participatein preparationof specificationand bid evaluation. A similar arrangementwould apply in connection with procurement of instrumentsand testing equipment, only utilizing METRIMPEX, a foreign trade company which specializes in technical instruments. These arrangements provide a satisfactoryblend of procurementand technicalexpertise.
3.25 HC Components: HC's Technical Directoratewill be responsiblefor preparationof technicalspecifications and for arrangingfor procurementof trucks. Draft technical specificationsand bidding documents have been discussedwith EC and were reviewedduring loan negotiations.
Proiect ImplementationSchedules
3.26 The railway and HC componentsare scheduledto be completedby 1989, the M-O motorway civil works will not be finisheduntil 1990, due to budget constraints. Project implementationschedules are shown in Tables 27, 28, and 29. The need for regular quarterly progress reports and a progress completion report within six months of the loan closing date has been discussed with all executing agencies. During negotiationsthe reporting requirementsand implementationschedules were confirmed.
3.27 Land acquisitionis a lengthy process in Hungary and will be started in early 1985. Even so all acquisitionand relocationmay not be completeat - 27 - the start of 1986. The Governmenthas stated that every effort will be made to speed up acquisition. During negotiationsassurances were obtained from the Government,that all land needed for the project works wou'd be acquired not later than June 30, 1986.
3.28 The project completiondate would be December 31, 1990 and the loan closing date would be June 30, 1991. Allowing for some slippage, this would allow sufficienttime (over six months) for the release of security deposits on supply contracts where performanceguarantees are specified, and for effectingfinal paymentsfor civil works.
Action Plan and OperationalTargets for MAV
3.29 The Action Plan would become an importantmeans for extending MAV's planning process, and would specify measures which would be required to achieveplanned objectives. These include organizational,planning, financial and marketingobjectives as well as improvementsin technicaland operational performance. The overallobjective of the Action Plan would be to improve the utilization of capacity of the existing railway network, as a part of a coordinatedtransport system, in order that it would play its proper part in developmentof the nationaleconomy. MAV has prepareda proposedAction Plan which has not yet been approved by the Government and which may change significantlysince the present proposalmay not be fully responsiveto fiscal and organizationalpolicy changes which would be introducedduring the next five year plan. During negotiationsthe Governmentagreed, however, to commit itself to a project relatedAction Plan, satisfactoryto the Bank, by October 1985, sett-ing out operational, organizational,planning, financial and marketingobjectives in an agreed format(Annex 1, Table 1), in respect of the componentsof MAV's investmentplan for 1986-90which would be assistedby the Bank, and of the impact of these investmentson the railway system as a whole. At the same time MAV would inform the Bank of its plans for the developmentof the whole railway system in the period 1986-90,would continue to implement and review its Action Plan annually and would keep the Bank informed annually of progress in achieving planned improvements. These aspects of operational performance would be carefully monitored during supervisionof the project.
G. The Loan, the Borrower,and the Beneficiaries
3.30 The borrower for the proposed loan would be the People'sRepublic of Hungary. The beneficiariesof the projectwould be MAV (railwaycomponents), KC (internationaltrucking components),and MOT (highway components). The latter, as a governmentMinistry, would receive project funds throughnormal channels. The Bank would enter into Project Agreementswith MAV and SC to whom the Government would on-lend loan funds under terms and zonditions satisfactory to the Bank (paras. 5.09 and 5.16). The on-lending arrangements with HC would be such that HC would pay back the sub-loan over a period consistentwith the life of the assets (vehiclesand supporting equipment) financed. Any amount so repaid and not needed to servicetae Bank's loan will be recycled to HC for the future purchase of similar assets. These arrangementswere confirmedwith the Governmentduring negotiations. Signing of the subsidiary loan agreements would be a special condition of loan effectiveness. - 28 -
H. Procurement
3.31 Road and Bridge construction contracts totalling about US$75 million (1986 prices) would be awarded to prequalified contractors in two or three lots (para. 3.23) after ICB in accordance with the Bank's Guidelines. Contractors would be prequalified to undertake either one or more lots. Hungary has very limited experience in civil works competitive bidding (para. 2.23), though runway and terminal construction at the Ferihegy airport was bid internationally with contractors providing their own designs. In consequence several decisions regarding matters such as whether to permit alternative bridge designs and the nwnber of contract lots await further study by Government officials. These points are being considered concurrently with the preparation of draft bidding documents and would be subject to agreement with the Bank. This was agreed during negotiations (para. 3.23).
3.32 All railway equipment will be procured through ICB. The equipment for modernization of the Ferencvaros marshalling yard, only a small portion of the total requirement, would be installed by MELUEPITO under an on-going contract (para. 3.22). The list of equipment and materials agreed between Government and Bank for financing under the Loan, which are shown in Table 22, are almost entirely unavailable from local manufacturers. However, should domestic manufacturers participate in the bidding they would be accorded a preference of 15%, or the applicable customs duties, whichever is lower. l
3.33 Highway snow removal and maintenance equipment (Table 25) will be procured through ICB (about US$2,300,000). Most of evaluationand testing equipment (Table 25) items (about US$400,000) would be procured through LIB due to the limited number of suppliers of the required items, with at least four suppliers from three different countries invited to bid. During negotiations the Government agreed that for the road evaluation vehicle (equipment), HOT would undertake to conduct an evaluation, satisfactory to the Bank, of pavement management systems and related mobile equipment in use in other countries and to assess their suitability to Hungarian requirements, before deciding which equipment to purchase. The decision would be subject to Bank agreement. International shopping (if more than one supplier's equipment is suitable for the particular pavement management system selected) or direct contracting, if the evaluation vehicle (equipment) is proprietory in nature, would be used in procurement.
3.34 HC trucks (Table 26) would also be procured through ICB. HC would purchase locally manufactured trucks as part of its replacement program (para. 2.35) so bidding for the fleet expansion trucks (para. 3.12) would be mainly directed at foreign manufacturers from eligible countries. During negotiations the Government confirmed that the contracting arrangements and delivery schedules for HC's trucks procured through Bank assistance would be suitably phased in consultation with the Bank to ensure effective supervision, and that the loan would finance about 40% of the cost of any such trucks (para. 3.37).
3.35 All ICB for procurement of goods would be in accordance with the Bank's Guidelines. All highway civil works contracts and contracts for - 29 - bidding lots of goods of US$200,000 or more would be subject to prior review by the Bank. This would include an estimated 24 contracts for goods, amounting to 90% of the total cost of equipment and materials financed by the proposed loan. Contracts for lesser amounts would be subject to ex-post review. Procurement of consulting services would also be in accordance with the Bank's guidelines. An estimated total of 10 man-months of foreign consulting services and 66 man-months of local consulting services would be engaged for the two studies and construction supervision consultancy assistance, under arrangements satisfactory to the Bank which would be subject to prior review.
3.36 The table below provides a summary of the type of procurement which would apply to goods and works and services included under the project. Procurement is not applicable to overseas training of Hungarian staff (paras. 3.07, 3.11 and 3.15).
Table 3.3: Procurement Method
Not Proiect Element ICB LCB Other Applicable Total (US$ Million) 1/ ---
Civil Works Railways - - - 15.1 2/ 15.1
Highways 94.0 - - - 94.0 (32.9) (-) (-) (-) (32.9)
Equipment & Vehicles Railways 27.6 - 10.8 3/ 17.3 4/ 55.7 (20.7) (-) (-) (-) (20.7) Highways 3.2 - 1.2 5/ (-) 4.4 (2Z.7) ()(1.0) ()(3.7)
Hungarocamion 40.9 - - - 40.9 (16-9) ()()-)(16.9)
Services Railways - - - 0.4 0.4 (-) (-) (-) (0.3) (0.3) Highways - - 3.9 0.7 4.6 (-) (-) (0.1) (0.3) (0.4) Hungarocamion - - 0.3 0.1 0.4 (-). (-). (0.1) (0.0) (0.1) 165.7 - 16.2 33.6 215.5 (73.2) (-) (1.2) (0.6) (75.0)
1/ Costs include estimated contingencies. 2/ Works under traffic including domestic materials (para. 3.22). 3/ Indirect foreign exchange component and equipment from CMEA countries. 4/ Small quantities of equipment produced in Hungary. 5/ LIB and either International Shopping or direct contracting for pavement evaluation equipment (Para. 3.33)
Note: Figures in parentheses are the respective amounts financed by the Bank loan. - 30 -
I. Disbursements
3.37 Disbursements will be made to cover:
(a) 1001 of foreign (C.I.F.) and 1002 of local expenditures ex-factory for railway equipment and materials, road maintenance equipment, testing equipment and HC's workshop equipment;
(b) 40% of foreign (C.I.F) expenditures for trucks;
(c) 351 of total expenditures for civil works contracts; and
(d) 1001 of foreign expenditures for consultants services, training and construction supervision.
With the exception of contracts valued at the equivalent of US$50,000 or less all withdrawal applications will be fully documented. Disbursements agaihst contracts valued at $50,000 or less would be made on the basis of statements of expenditures (SOE). Documentation to support expenditures financed under SOE would be maintained by the Borrower in one location and made available for review by Bank representatives upon request in addition to being audited by auditors acceptable to the Bank (para. 3.40). During loan negotiations confirmation was obtained of the foregoing arrangements.
3.38 To maintain an adequate flow of funds available to the beneficiaries to finance eligible project expenditures (para. 3.37) with a minimum of administrative delay, the Borrower will establish a Special Account (revolving fund) at the NBH sufficient to cover about four months of project expenditures (i.e. about US$5.0 million). Records of the Special Account proceeds and outlays would be available for review by Bank supervision missions and subject to annual audit (para. 3.40). During negotiations confirmation was obtained of the foregoing arrangements.
3.39 Based on the loan becoming effective in late 1985, a schedule of estimated disbursements has been prepared and is shown in Table 30. Disbursements for railway materials and equipment and HC's trucks are expected to initially accumulate sooner than the Bank's average for railway projects and then continue at about the average rate for such projects. This is realistic since civil works in the marshalling yards are not being financed under the project, so only equipment contracts for which disbursement is faster, is involved. For highway civil works, the projected rate of disbursement is close to the Bank's average experience for this type of project. This schedule which indicates a six year disbursement period is slightly shorter than the disbursement profile for regional transportation projects, where 851 disbursement of the loan amount is generally achieved within six years of Board approval. Because Hungary is a new member of the Bank, there is not yet an established profile for the country, however, disbursements on projects in Hungary have been faster than the regional average. The schedule was discussed and confirmed during loan negotiations. - 31 -
J. Reporting. Accounts and Audit
3.40 The form of quarterly reports in which physical progress on the project would be communicated to the Bank was discussed with UTIBER, the project coordinating agency, (para 3.21). The form of financial reporting was similarly discussed. It was agreed that separate accounts would be used to record all project funds and expenditures and that the accounts relating to the highway component of the project (para. 5.17), as for 'AY (para. 5.04), HC (para. 5.15) and the Special Account (para. 3.38) would be audited each year by the General Banking and Trust Company. The accounts and:the auditors report thereon would be provided to the Bank within four months from the end of the fiscal year. These arrangements were discussed and agreed at negotiations. - 32 -
IV. ECONOMIC EVALUATION
A. General
4.01 Hungary attaches a very high priority to the improvement of its external trade routes which carry more than 50 million tons of freight traffic (import, export and transit) per year. Many important links in the transport network are at times overloaded, creating bottlenecks whose elimination is urgent for the Government. In particular, a number of important railway marshalling yards have become totally outmoded. Also special attention is needed to introducing technological changes and improvements that affect more than one mode of transport, such as: containers, concen;ration of container terminals and development of interface linkages with rail and other modes of transport. Within the highway system, the radial roads spanning the country from Budapest to its borders, which have within their inFluence areas most of the Country's industrial and conmercial activity, are generally of international significance. The improvement of congested sections of these roads would also benefit other countries so highway subprojects built around these principal trade routes are of higher priority over others. Finally, a significant opportunity also exists in the transport sector for improving inter modal balance (para. 1.11) especially in foreign trade.
4.02 The proposed project components are intended to address all these important aspects: provide additional capacity for Budapest marshalling yard, modernize selected container terminals, divert the heavy through road traffic away from Budapest city, and enhance international competitiveness of EC's foreign trade services, which is in keeping with the Bank's country assistance strategy. The ultimate beneficiaries of the proposed project would be transport users who, due to diversity of traffic using the transport network, come from a wide range of sectors and income groups. The proposed project would benefit international trade, foreign exchange earnings, and support energy conservation (paras. 3.01 and 3.02). It is expected that the benefits of the ;,roposed project, which initially would accrue to transport users, would be passed on to the economy in general.
B. Proiect Costs and Benefits
4.03 The economic evaluation of the different subprojects is cased on the feasibility studies undertaken by MAV, UVATERV and RC which are in the project file (Annex 6). These studies were reviewed and discussed with the concerned agencies and a number of marginal subprojects were reformulated or postponed while more economically viable components were included as a rr ult of the review.
4.04 The traffic projections for the different subprojects are based on past traffic trends, origin-destination studies, and planned increases in production and consumption in the zones of influence. The forecasts take into account normal traffic growth and, wherever appropriate, the additional traffic generated by the proposed project over the normal project life.
4.05 For calculating the economic benefits and costs, international prices have been used for imported equipment, materiAls and other tradeable commodities. As regards the latter, prices of mainline locomotives and - 33 -
shunters produced in Hungary are significantly below the international price. Land and other non-tradeable items like railway ballast and aggregates, skilled and unskilled construction labor have been valued at local prices. Economic costs net of taxes were estimated for all investment costs, maintenance costs and operating costs.
4.06 The quantitative economic analysis for the improvement of the railway marshalling yard takes into consideration the major benefits from the avoidance of traffic diversion due to capacity constraints. Expected benefits from the track maintenance equipment include reduction in track and rolling stock maintenance expenses due to reduced wear, savings in manpower and: in operating expenses from the increased operating speed resulting from removal of speed restrictions on poor tracks. The economic benefits from container handling equipment would result mainly from quicker turn-round, resulting in improved utilization of rolling stock, savings in manpower and reduction in damages. Expected economic benefits of the project road construction include savings in: vehicle operating costs due to reduced congestion, shortened travel distances, improved road surfaces, and reduced travel times. The economic benefits from net additions to HC's vehicle fleet by outright acquisition take into consideration savings in costs compared to other alternatives such as leasing or hiring of vehicles. Benefits from improved environment in Budapest city, due to diversion of heavy commercial vehicles from the city, have not been quantified. Similarly, benefits due to reduction in accidents in the improved operation of the marshalling yard have not been taken into account.
4.07 In selecting the proposed investments, several alternative solutions were evaluated such as utilizing the spare capacities of other marshalling yards, improving or reconstructing the existing track or constructing a new one, road construction of the two roadways at once or by stages, and purchasing new vehicles as opposed to leasing. For each project alternative, the most economic solution has been adopted.
C. Economic Return (ER)
4.08 Based on the most probable estimates of construction costs, operating and maintenance costs and time costs, the proposed investments on the transport (rail/road) project components produce economic returns (ERs) ranging from 14% to 40% (Table 4.1). All investments would yield first-year benefits of llZ or more. The weighted average ERs of all civil works and equipment components, which account for about 972 of total project cost are 202 for the project as a whole, and 28%, 15%, and 172 respectively for its railways, highways and HC's components. The above ERs understate the full economic benefits of the project by excluding reductions in accidents, environmental improvements and greater comfort and convenience of travellers on the improved facilities. Sensitivity analyses were carried out to test the effect of variation in construction and equipment costs and users' benefits on the above estimates. Even under the unfavorable assumptions of 15X higher construction/equipmentcosts combined with a 15Z reduction in users' benefits, the ERs remain acceptable within the range of 13% to 24% with an overall weighted ER of 17Z. Net foreign exchange earnings and savings in convertible currencies are estimated at about US$15 to 20 million annually at project completion. ;34 -
Table4.1; EconomicRet;.rr.. (ERs) and First Year Returns(FYRs)
Proportion SensitivityAnalysis of Totcl Expected Lower 1/ Higher2/ Expected Project Component Investment ER Estimate Estiuate FYR _____% ------
A. Railway (i) Modernization of FerencvarosMarshalling Yard 17 30 25 35 23 (ii) Track Constructionand MaintenanceMachinery 9 36 30 42 26 (iii)Container Handling Machinery 8 16 13 19 12 Subtotal(Railway) 34 - - - - WeightedAverage - 28 24 33 21
B. Highway (i) Civil Works (Mo Motorway) (K. 13.9- 28.5 km) 45 14 12 16 11 (ii) Road Maintenance Equipment 1 40 34 46 30 Subtotal (Highway) 46 - - - - WeightedAverage - 15 13 17 11
C. Hungarocamion (H.C.) (i) Vehicles 19 16 13 19 12 (ii) Infrastructure Equipment (e.g. Maintenance, Storage) 1 28 23 33 21 Subtotal (H.C.) 20 - - - - WeightedAverage - 17 14 20 13
GRANDTOTAL 100 - - - - WeightedAverage 20 17 23 15 (Railway,Highway, and H.C.)
1/ Assumes15S increasein constructioncosts combinedwith 15% decrease in benefits. 2/ Assumes15% decrease in construction costs combined with 15%increase in benefits.
Source; Feasibilitystudies and missionestimates
January 1985 4385D - 35 -
Railway Subpraiects
4.09 Modernization of Ferencvaros Marshalling Yard - The Budapest Ferencvaros (East) marshalling yard, destroyed during the Second World War was rebuilt in 1952. The installations and equipment are badly worn out because of the long usage. The yard is outmoded with obsolete technology. Skids are used instead of secondary retarders. Damage to the rolling stock and to the shipped goods is considerable because of the poor condition of the rails and unreliable braking equipment; the danger of accident is also very high. With the improvements proposed, the present capacity of the marshalling yard would improve from about 2,600 to 4,500 wagons per day and the total marshalling time of car detention (reception, marshalling and train formation) would decrease from the present average of about 15.30 hours to about 7.50 hours. The modernization would also minimize the role of the other two yards in the Budapest junction (Rakos and Rakos-rendezo) thus obviating the present necessity of circuitous diversion of about 33% of the trains to the other yards. This would result in substantial savings in rolling stock and motive power. The improvement of the braking system would also minimize the damages to rolling stock and goods, eliminate block braking and reduce operating costs. The proposed improvements would thus alleviate a serious impediment to smooth traffic flow and would yield a satisfactory ER of about 30X.
4.10 Track Construction and Maintenance Machinery - Hungarian railways are characterized by high volume operation on a limited railway network (para. 2.02). Considerable wear of outer rails on curves and wear and flattening of the rail table pose difficult maintenance problems with steadily increasing costs. Furthermore, about 70% -of the track construction and maintenance machinery is over ten years old and has outlived its normal useful life. Replacement and modernization of the low-efficiency limited-capacity track machinery will upgrade MAV's maintenance capacity and reduce track maintenance costs. It is, therefore, of special significance for MAV's efficient operation and the proposed investments would yield considerable benefits and produce a high ER of about 36Z.
4.11 Container Handling Machinery - Container traffic on MAV is growing rapidly and there is an increasing demand for modern container handling facilities for middle-sized and large containers at selected sites. Investment in container handling equipment is based on MAV's operational plan which takes into consideration change of track-gauge and the inter-face arrangements needed at selected container terminals, on a priority basis, to effect quicker turnaround, reduce damages of goods and provide quality services. The proposed new investments are estimated to yield an ER of about 16%. The railway subprojects combined (paras. 4.09, 4.10 and 4.11) would bring annual cost savings of about US$ 10 million.
Highway Subproiects
4.12 Budapest By-Pass (M-0 Motorway) - The proposed section (Km 13.9 to Km 28.1) of M-0 motorway is the beginning of Lhe construction of a ring road (about 90 km) designed to provide a by-pass around Budapest city. In absence of the by-pass, the existing streets in the city are badly congested and - 36 - inadequate to handle the present and future traffic volumes. Furthermore, through traffic, particularly large trucks, acts as a great impediment to the smooth flow of traffic, lowers the operating speeds and increases traffic hazards. About 6,000 to 11,000 vehicles per day would have used this first section of motorway in 1985, had it been constructed. Furthermore, the traffic volume on this first section would immediately increase by about 50% as soon as the section is connected with the motorways H-1 and M-7 by completing the construction of the 13.9 km of next stage of this by-pass. About 20% of this traffic would consist of heavy trucks, trucks, trailers, vans and buses. Traffic is expected to grow initially at 15% then drop to about 5% per annum during the next 20-year period. Quantified benefits due to the proposed project would result mainly from savings in congestion costs, consisting of both vehicle operation costs and passenger time savings-L on business trips. Savings in vehicle operation costs, excluding passenger time savings, account for about 55% of the total benefits. Because of two major bridges and five important interchanges, the cost of construction per km of this first section is relatively high. Nevertheless, savings in combined vehicle operating costs and time costs are also very significant and are conservative}y estimated to yield an ER of about 14%.
4.13 Road Maintenance Equipment - Considerable traffic hold-ups are experienced in winter in different parts of Hungary due to road icing, snow falls and blizzards resulting in increased vehicle operation and time costs. The proposed investment in modern road maintenance equipment such as high capacity sand/salt spreading machines, rotary snow plows, etc., is primarily designed to reduce the period of traffic delays during winter time. However, about a half of the proposed equipment acquisition is multi-purpose and would also serve for other maintenance operations throughout the year. Since with a relatively small investment, the period of disruption to traffic could be reduced significantly on the heavily trafficked trunk routes, the proposed investments would produce substantial benefits and yield a high ER of about 40%.
4.14 Hungarocamion(HC) - Additional Vehicles - Net additions to HC's fleet are designed to improve its export earnings and enhance international competitiveness (paras. 2.33 and 3.12). Compared to other alternatives like leasing/hiringof vehicles, outright acquisition of fuel-efficient lightbodied vehicles proves to be the least cost solution to meet the special long haul needs of HC. The proposed investment is estimated to yield an ER of about 16% while the financial return to HC on account of the proposed addition of vehicles is estimated at about 18% which is equally attractive. HC's combined modernization and development program would yield estimated incremental net revenues of about US$15 million equivalent annually.
1/ To take social overheads and indirect costs into account, time savings were valued at 1.1 times the average hourly wage rate of travellers in the influence area, for journey made for business purposes. Time savings for other journeys have not been considered. - 37 -
4.15 EC's Equipment - HC's infrastructure facilities such as maintenance equipment and spare parts, storage equipment and improved information system facilities are required for improved availability and utilization of trucks, effective inventory control and better quality of services. The proposed investments are of special significance to HC for enhancing international competitiveness and would yield a satisfactory ER of about 28Z.
4.16 Other Project Elements - Benefits could not be quantified for other project elements, namely, technical assistance and studies, research and laboratory equipment and training (about 3X of total project costs) which are necessary for the project as a whole and whose benefits would permeate the entire economy.
D. Project Risks
4.17 The proposed project supports high priority portions of the 1986-90 Investment Plan of Hungary. The economic justification of the project components has been well established even under unfavorable hypotheses concerning project costs and users' benefits (para. 4.08). The technical solutions adopted are based on adequate engineering and technical studies. The risks of delay in project execution are minimum. The preparation of model bidding documents and specifications is well advanced and would be closely monitored during project supervision. Consultant assistance is being provided under the project (para. 3.20) where this might be a problem. Furthermore, Hungarian transport agencies have built up competent managerial and technical expertise. The Government is aware of the Bank's concern that the start of civil works not be delayed due to problems in acquiring land and is devoting particular attention to this matter (para. 3.27). Risks from inadequate project implementationare, therefore, minimal.
E. Environmental Impact
4.18 The highway project is expected to have beneficial environmental impact by the diversion of heavy traffic from Budapest city, thus reducing traffic congestion, accidents and air pollution. Noise barriers and rest areas with suitable facilities are provided in the design of the motorway. Improvement of the Ferencvaros Marshalling Yard would sharply reduce shunting operations in the yard and traffic between the three yards in Budapest junction, reducing noise and pollution. The improved braking system would also reduce noise and accidents. MAV's plans include electrification of the shunting operations in Budapest junction which would bring further improvements. The modernization of RC's fleet of trucks can also be expected to be environmentally beneficial due to reduced pollution characteristics of the trucks. - 38 -
V. FINANCIALANALYSIS
A. General
5.01 The financialanalysis presentedin this section deals with the two revenue earning entities of the project, MAV and SC, and is based on their financialperformance during the years 1981 to 1984 and their forecasts to 1989. MAV and HC maintain their accounts in accordance with a National AccountingCode which has been reviewedand found acceptable.
B. Railways
5.02 MAV is required to recoverits operating costs and to finance almost all its capital development from its own zevenues. This it does and, in addition,makes payments to the Governmentby way of income tax and payments to national and local developmentfunds. Its freedom to increasecharges is restrictedby a GovernmentBoard of Pricing. As a matter of urban policy the Government has not set suburban passenger fares at the level which would recover all costs and pays over a monthly subvention to MAV to cover the difference. In addition the Governmentrecompenses the railwaysfor the loss of revenues in certain concessionalfares (e.g. pensionersand students). In 1982, the subventionhad reached a level equivalent to 70Z of the passenger revenuesbut followinga 50Z increasein fares in 1983 the Governmentpayment in 1984 fell to about 45% of passengerrevenues.
Past FinancialPerformance
5.03 Financial results for the years 1981-1984 are shown in summary in Table 5.1. MAV's operating ratio increasedfrom 80 to 90 over the past four years principally as a result of the fall in passenger traffic and revenues. When the operatingratio is calculatedwithout the subventionit shows a 1984 ratio of 100; a creditablefinancial performance which few other railwayscan match. MAV's operatingrevenues without the Governmentpayment are sufficient to cover the whole of its operatingexpenditure. The subventiondoes not, therefore,as is the case with most railways, finance an overall operating deficit. Instead,by adding to MAV's revenues,it gives a surplus from which debt service, increases of working capital and most of its funds for investments are provided. It should also be noted that there is no cross-subsidiybetween freight and passenger services. It is the Government which pays MAV since it does not wish to raise suburban and concessionary passenger fares to cover their full costs, because of the implicationsof reducing the numbers of rail travellers and adding to urban congestion. Commutersform the bulk of the passengertraffic; fares for journeysof 80 kms and more cover their costs i" full. The operating surpluses have been substantial(approximately 2U& of net revenue) which has enabled MAV to financeits investmentprograms from its own funds. - 39 -
Table 5.1 MAV: Summaryof FinancialResults 1981 to 1984
1981 1982 1983 1984 Actual Actual Actual Estimate --- FT-Million---
TariffRevenue 30,723 31,713 35,148 35,437 Subventiona" 7,218 6,613 5,726 ,3,883 Total Revenue 37,941 38,326 40,874 39,320
OperatingExpense 30,193 31,554 35,414 35,268 Net OperatingRevenue 7,748 6,772 5,460 4,052 Interest 116 134 444 584 Pre-taxProfit 7,632 6,638 5,016 3,468
OperatingRatior' 80 82 87 90 OperatingRatio withoutsubvention 98 99 101 100
1/ Governmentscompensation for suburbanpassenger fares and concessionary rail fares.(e.g.for pensionersand st,udents). 21 Operatingexpenditure including depreciation divided by operatingrevenue.
AccountingPolicy, Practiceand Audit
5.04 MAV's Director of Central Accounting and Finance has an internal control section with responsibilityfor seeing that accounts are kept in accordancewith accountingregulations. Depreciationrates are at an adequate level and accounting policies capitalize improvements from overhaul and rehabilitation.Audits are made by the Directorateof Income and Control of the Ministry of Finance which oversees matters of budget and taxation. The accounting practices and policies are acceptable. The present audit arrangementsare designed to ensure compliancewith tax regulationsand are not of the standard requiredby the Bank. It was agreed that beginning with its 1986 fiscal year MAV will have its accounts audited annually by the General Banking and Trust Company. This is an independent auditing organizationacceptable to the Bank. The accounts and the auditor's report thereonwill be provided to the Bank not later than four months from the end of each year (para 3.40). - 40 -
Future Financial Performance
5.05 Income Statements, Cash Flow Statements and Balance Sheets for 1983 and 1984 with forecasts to 1989 are given in Annex 5 together with a description of the major assumptions used. A summary of the Forecast Income Accounts is given in Table 5.2. Financial results are forecast to improve through the project period for the reasons given in the following paragraphs.
Table 5.2: MAV - Summary of Forecast Income Accounts
Estimate Forecast 1984 1985 1986 1987 1988 1989 ------FT Million--…
Tariff Revenue 35,437 37,840 40,890 44,040 47,250 50,500 Subvention 3,883 4.500 4,840 5,180 5,520 5,860 Total Revenue 39,320 42,340 45,730 49,220 52,770 56,360
Operating Expense 35,268 37,230 40,380 43,110 45,880 48,580 Net Operating Revenues 4,052 5,110 5,350 6,110 6,890 7,780 Interest 584 620 640 680 710 750 Pre-tax Profit 3,468 4,490 4,710 5,430 6,180 7,030
Operating Ratio 90 88 88 88 87 86 Operating Ratio without subvention 100 98 98 98 97 96
5.06 In 1984 MAV received two-thirds of its revenues from hauling freight and this percentage is forecast to increase slightly during the project period. The volume in net ton-kms is expected to grow at 2% per annum as a result of a growth in the economy; MAV's improved ability to handle international traffic in containers and because of new regulations introduced by the Government, effective in 1985, which permits the payment of incentives to unload wagons at weekends. Passenger traffic is forecast to increase at 1% per year. MAV has plans for a major marketing effort, including the use of concessional off-peak fares and incentives for foreign tourists. Costs are estimated to increase with the volume of traffic and inflation, offset by modest gains in productivity.
5.07 The estimates reflect the following agreements and understandings reached during negotiations:
ta) the objectives set for MAV in the forthcoming National Plan will aim at increasing the profitability of the railway;
(b) as a part of that policy the charges for hauling freight traffic will be increased by at least the increase in the industrial production price index; - 41 -
(c) as a minimum the total of MAVs revenues shall be not less than the sum of total operatingexpenses (includingdepreciation) and the amount by which debt service exceeds the provision for depreciation.
In practice the Governmentwill requireMAV to make a profit, pay income tax on that profit and provide a contributionto its investmentsof the order of 90Z plus. The estimates have been made on an assumption that the annual payment by the Government for concessionary and commuter passenger fares will remain about the 1984 level in real terms.
5.08 Forecast Balance Sheets for MAV are shown in Annex 5 while a summary of past and projected financial results is given in Table 5.3. Both current ratio and liquid ratio forecasts remain satisfactory during the project period. Return on resources employed, measured as pre-tax profit as a percentageof Net Fixed Assets plus Inventoriesplus Wages (the normal method in Hungary of assessingthe adequacyof the return) is forecast to rise from 3.5% in 1984 to 6.9S in 1989.
Financing Plan: MAV
5.09 A financingplan for investmentsfor the period 1985-89 is shown in Table 5.4. The financing plan shows 982 of funds for investmentsbeing met from MAV's own resources. The Bank Loan will be on-lent to MAV by the Governmentwith an interest rate at least equal to the World Bank rate plus 30S. The Governmentwould take the foreign exchange risk. HAV would repay the loan over a period of 15 years includinga grace period of 3 years (para. 3.30). MAV's small borrowing requirementpresents no problems with debt service coverageas internalresources in no year are less than 12 times the debt servicerequirement. - 42 -
Table 5.3: MV - Financial Suamry
1981 1982 1983 1984 1985 1987 1989 Actual Actual Actual Estimate Forecast Forecast Forecast …______-__-___-__(millionsof currentForints)------
IncomeStatement Items
Unit volume(TU millions) 37,340 35,840 33,758 33,529 34.087 35.236 36.424 Tariffrevenue 30.723 31.713 35,148 35.437 37,840 44,040 50,500 Subsidy 7,218 6.613 5.726 3.883 4.500 4.500 4.500 operatingRevenue 37,941 38.326 40.874 39.320 42.340 49,220 56.360 Net OperatingRevenue 7.748 6.772 5,460 4,052 5,110 6.110 7,780 Pre-taxProfit 7,632 6.638 5.016 3.468 4,490 5.430 7,030
FundsStatement Items
InternalSources 10,438 9,214 9,967 9,935 10,368 12,170 14,692 LongTerm Loans 23 142 323 60 209 218 - Equity Investments - - - 400 100 - - TotalSources 10,461 9,356 10,290 10.395 10,677 12,388 14,692 CapitalExpenditures 7.332 6,615 6.531 6,436 6,045 9,018 11.033 workingCapital Increase (Oecrease) 2,175 763 (186) (129) 1,964 622 446 Debt Service 189 208 467 611 724 872 1,044 Other Uses 765 1.770 3,478 3.477 1.944 1,876 2,169 TotalUses 10,46i 9,356 10.290 10.395 10.677 12,388 14,692
BalanceSheet Items
Current Assets 15.324 17,629 17,611 19,480 22,035 23,113 25.552 LessCurrent Liabilities 1,510 2.975 2,761 4,600 5.494 6,364 7,794 Sub-total 13,814 14,654 14.850 14,880 16.541 16.749 17,758 OtherAssetsl/ 4,991 4,816 5.096 4,948 5.359 6.373 6.185 Net FixedAssets 78.664 79.201 78.678 77.160 74.550 72,030 71,110 TotalAssets 97.469 98.671 98,624 96,988 96.450 95,152 95,053 Debt 46 165 461 432 504 654 453 Equity 97,423 98.506 98.163 96,556 95.946 94,498 94,600 TotalLiabilities and Equity 97,469 98.671 98,624 96,988 96,450 95,152 95,053
Ratios Operatingratio&/ (S) 80 82 87 90 88 88 86 Operatingratio without subsidy (5) 98 99 101 100 98 98 96 Subsidyas percentageof totalrevenue (5) 19 17 14 10 10 11 11 Returnon resources_/ (5) 8.0 6.8 5.1 3.5 4.5 5.5 6.9 Debt service coveragell(Times) 45.0 39.6 19.6 14.5 13.0 14.2 14.2 Percentageof investmentsfinanced from ownresources (X) 97 98 95 93 95 98 100 Debt/Equityratio -/100 -/100 1/99 1/99 1/99 1/99 1/99
I/ Net of other Non-currentliabilities. 2/ OperatingExpenditure divided by OperatingRevenue. 3/ Profit before Tax as percentageof Net Fixed Assets, Inventories andSalaries. 4/ Profitafter tax plusdepreciation plus interestdivided by debt service.
(43850/61) - 43 -
Table 5.4: M.A.V - FINANCING PLAN 1985-89
Cash Availability FT(mil) FT(mil) X
Internal Resources 58,489 98 External Resources 1,045 2 Total 59.534 100
Internal
Sources After Tax Profit 11,781 20 Depreciation 41,040 70 Provisions 5,029 9 Other Sources 639 1 Total 58,489 100
Applications
Debt Repayment 642 1 Incentive Fund 3,372 6 Income Working Capital 4,416 8 Other Uses 7,128 12 Total 15,558 27
Net Available for Investments 42,931 73
Financing of Investments
Net Internal Resources 42,931 98 External Resources: Grant" : 100 IBRD Loan 945 1,045 2 43,976 100
1/ For the equipment of a school.
Sensitivity
5.10 The increases in traffic volume forecast for the project period are small but funds generation is nevertheless sensitive to a failure to achieve the forecast traffic growth as shown in Table 5.5. After allowing for taxes, the reduction in funds available for investments would amuunt to about 4% in 1985, 8% in 1987 and 13% in 1989, illustrating the cumulative effect on funds, over a period of years, of lack of growth. An additional increase in tariffs averaging 4.5% a year would be needed to restore funds to the level needed to implement planned investments and to meet all other commitments. - 44 -
Table 5.5: Reduction in forecast Pre Tax Profit as a Result of No Traffic Growth
1985 1987 1989 --- Ft. Millions -- Present Forecast of Pre Tax Profit 4,490 5,430 7,030 Forecast Pre Tax Profit if no traffic traffic growth 4,032 3,917 4,155 Reduction 458 1,513 2,875
C. Hungarocamion
Past Financial Performance
5.11 Hungarocamion competes with truck companies from other European countries for both export and import traffic. It has freedom to set its own charges within a competitive sitcation. It is an efficient and profitable concern and has produced a return on resources as high as 41X. Profitability fell sharply between 1981 and 1983 as shown in Table 5.6. This was caused by the keener competition from other European truckers, which resulted from difficult economic conditions and pushed rates down from an average of 3.9 Ft/ ton-km in 1981 to 3.4 Ft/ton-km in 1984. Meanwhile, operating costs rose from an average of 2.7 to 2.9 Ft/ton-km. Nonetheless, HC is still in a healthy financial position; the operating ratio for 1984 was 84. To maintain and improve this position HC needs tp expand its fleet with modern vehicles, which will enable it to carry a bigger volume of specialized traffic, e.g. leather clothing, and livestock and to do so in more efficient vehicles.
Table 5.6: HC - Summary of Income Accounts 1981 to 1984
1981 1982 1983 1984 Actual Actual Actual Estimate - - FT Million --
Operating Revenue 4,131 4,367 4,553 4,961 Operating Expenditure 2 ^tl 3,277 3,731 4,151 Net Operating Revenue 1,220 1,090 822 810 Interest - 41 58 94 Pre Tax Profit 1,220 1,049 764 716
Operating Ratio % 70 75 82 84 Return on Resources Z1' 41 34 21 16
1/ Pretax profit as a percentage of net fixed assets, inventories and wages. - 45 -
5.12 HC is responsible to MOT for the operation of its business. After preparation of its business plan for the year, covering operations and finance, the plan is considered by a Plan Jury which includes representatives from MOT, NPO, MOF ad NBH. After agreement at this level, the plan is presented for approval to the Undersecretary of State of MOT, to whom RC has direct responsibility. After the end of the year, HC must report to MOTupon the outcome of its plan, both operationally and financially.
Future Financial Performance
5.13 HC's financial results are expected to remain at about the present level through 1986 and then to improve through 1987 to 1990 when the effects of the modernization and expansion of the fleet will show. Results of income account forecasts are summarized in Table 5.7. A past and forecast financial summary is shown in Table 5.8. HC's financial projections are based on traffic which is forecast to increase proportionately with the expansion of the fleet and on revenues which would reflect the charges for the new specialized vehicles. Costs take into account forecast inflation and reflect the increased efficiencies which should result from the modernization of the fleet and from the opening, late in 1984, of a new and well equipped maintenance workshop in Budapest. The estimates are conservative and acceptable. Details of the underlying assumptions are given in Annex 5.
Table 5.7: RC - Forecast Incomne Account Results
1985 1986 1988 1990 __ FFT- Million -- Operating Revenue 5,245 5,462 6,878 8,623 Operating Expenditure 4,335 4,621 5,441 6,562 Net Operating Revenue 910 841 1,437 2,061 Interest 94 99 137 180 Pre Tax Profit 816 742 1,300 1,881
Operating Ratio Z 83 85 79 76 Return on Resources Z 18 15 23 29 - 46 -
Table 5.8: FinancialSummary - Hungarocamion(HC) (see detailed Tables in Annex 5)
1981 1982 1983 1984 1986 1988 1990 Actual Actual Actual Estimate Forecast Forecast Forecast ------(millionsof current Forints)------
Income Statement Items
Unit Volume (millionpaid kus) 98.2 113.5 121.6 133.7 139.6 161.7 184.5 OperatingRevenue 4,131 4,367 4,553 4,961 5.462 6,878 8,623 Net OperatingRevenue 1,221 1.090 822 810 841 1,437 2,061 Pre Tax Profit 1,221 1,049 764 716 742 1,300 1,881
Funds StatementItems
InternalSources 1,553 1,784 1,576 1,488 1,191 1,741 2,251 Borrowings 321 117 251 - 382 382 497 Total Sources 1.874 1,901 1.827 1.488 1.573 2,123 2,748 CapitalExpenditure 817 823 795 816 929 982 1.254 Working Capital Increase (Decrease) (37) 187 (607) (437) 106 (49) 79 Debt Service 65 98 151 231 230 454 619 Other Uses 1.029 793 1,488 908 308 736 796 Total Uses 1.874 1.901 1.827 1.488 1.573 2,123 2.748
BalanceSheet Items
Current Assets 1.986 2.077 1.687 1,562 1,806 2.067 2.360 Less Current Liabilities 586 420 602 847 908 1,110 1.281 Subtotal 1.400 1.657 1,085 715 898 957 1.079 Other Assets 1/ (9) (129) 41 (334) (386) (436) (33) Net Fixed Assets 2.386 2.579 2.829 3.491 3.911 4,407 5,081 Total Assets 3.777 4.107 3.955 3.872 4.423 4,928 6.127 Debt 199 210 367 330 654 1,039 1,461 Equity 3.578 3.897 3.588 3.542 3.769 3,889 4,666 Total Liability& Equity 3.777 4.107 3.955 3,872 4.423 4,928 6.127
Ratios: Operating Ratio S 2/ 70 75 82 84 85 79 76 Return Before Tax on Resources % 3/ 41 34 21 16 15 23 29 Debt Service Coverage (Times) 4/ 16.2 10.8 6.2 5.2 4.5 3.3 3.4 Percent of Investment financed from own resources % 61 58 68 100 59 61 60 Current Ratio (Times) 5/ 3.4 4.9 2.8 1.8 2.0 1.9 1.8 Debt Equity Ratio 5/95 5/95 9/91 9/91 15/85 21/79 24/76
1/ Net of Non CurrentLiabilities 2/ Operating expenaiture divided by operating revenue. 3/ Pre tax profit as percentage of net fixed assets plus inventories plus wages. 4/ After tax profit plus Interest plus depreciation divided by debt service. S/ Current assets divided by current liabilities.
(43850/60) - 47 -
5.14 During negotiations agreement was reached with the Government to provide that HC should take necessary actions to attain an operating ratio of not more than 80 in 1988 and subsequent years. The achievement of this ratio will result in revenues adequate to meet operating costs including depreciaion and debt service.
Accounting Policies and Audit
5.15 HC keeps its accounts to the Hungarian National Accounting Standards and these and its accounting system are acceptable. Tax auditors of MOF make an annual review for compliance with tax laws but to comply with Bank standards it has been agreed with HC, that begining in 1986 it will have its accounts audited annually by the General Banking and Trust Company and will provide copies of the accounts and the auditors reports thereon not later than four months from the end of each year (para. 3.40).
Table 5.9: Hungarocamion - Financing Plan 1986/90
Ft(mil) Z Ft(mil) %
Cash Availability Internal Resources 7,888 79 External Resources 22099 21 Total 9,987 100
Internal Sources After tax profit-' 3,191 41 Depreciation 3,866 49 Other Sources 831 10 Total 7,888 100
Applications Debt Payment 1,465 18 Incentive Fund 328 4 Transfers to State Budget 798 10 Increase in Working 280 4 Capital Other Uses 1,784 23 Total 4,655 59 Net Available for Investments 3,233 41
Financing of Investments Net InternaL Resources 3,233 61 External Resources: IBRD Loan 903 17 Co-financng 1,196 22 2,099 39 Investments 5,332 100
1/ Including transfers to reserve during the last year of the investment plan. - 48 -
Financing Plan
5.16 HC can provide funds to finance the replacement of the existing fleet and for most of the other parts of its capital program. A loan is required to purchase 550 additional vehicles and this is to be provided in part by the proposed Bank loan and in part by cofinancing. A financing plan for 1986-90, shown in Table 5.9, shows 61% of the cost of investments as self financed and the balance from the Bank loan and co-financing. The NBH will pass on the proceeds of the Bank loans at an interest rate at leas t equal to the Bank rate plus 30%. The Government would take the exchange risk. HC would repay the loan over a period of 6 years including 3 year grace. The amounts so repaid and not needed to service the loan from the Bank will be available to HC for the future purchase of similar assets (para. 3.30).
D. Highways Component
5.17 Bank funds for the Highway Component will be passed on to the MOT. MOT will cause separate project accounts to be maintained for the Bank financed parts of the investment program and have these audited by the General Banking and Trust Company. Copies of the accounts and the auditor's report thereon will be provided to the Bank not later than four months after the year end (para. 3.40). - 49 -
VI. AGREEMENTSREACHED AND RECOHMENDATIONS
6.01 During loan negotiations confirmation was obtained from the Government regarding the following principal matters:
(i) that not later than December 1986 the Government would have made decisions in respect of those lines, out of the 600 km of uneconomic lines, which would be closed by 1990; and that the Bank would be informed of the decisions soon thereafter (para. 1.10);
(ii) the project cost estimates and the Bank-financed project components (paras. 3.16, 3.17 and 3.18 and Table 3.1);
(iii) the appointment of UTIBER (consultants) as the Project Coordinator (para. 3.21)
(iv) the project reporting requirements and implementation schedules (para. 3.26, and Tables 27, 28, and 29);
(v) arrangements for the Government to on-lend loan funds to MAV and HC (paras. 3.30, 5.09 and 5.16);
(vi) the contracting arrangement and delivery schedules of HC's trucks procured through Bank assistance would be suitably phased in consultation with the Bank to ensure effective supervision (para. 3.34);
(vii) disbursement arrangements and the estimated schedule of disbursements (paras. 3.37 and 3.39 and Table 30); and
(viii) arrangement for establishing a Special Account (revolving fund) with NBH to cover about four months of project expenditures (para. 3.38).
6.02 During loan negotiations, agreements were reached with Government and the beneficiaries on the following:
(i) the RUC study, based on the terms of reference agreed with the Bank would be initiated not later than January 1, 1986, and completed by December 31, 1987 (paras. 3.14);
(ii) the trucking management system studies would be initiated by Januarv 1, 1986 and completed by December 31, 1987, according to the terms of reference acceptable to the Bank (para. 3.15);
(iii) the number of contract lots on highway civil works (M-0 bypass) and the desirability to permit alternative bridge designs during ICB would be subject to agreement with the Bank (paras. 3.23 and 3.31); - 50 -
(iv) all land needed for project works would be acquired not later than June 30, 1986 (para.3.27);
(v) that a projectrelated Action Plan satisfactoryto the Bank would be prepared by October 1985 and that MAV would continue to implement and review its Action Plan annually and would keep the Bank informed annually of progress in achieving planned improvements (para. 3.29);
(vi) MOT would conduct an evaluation,satisfactory to the Bank, of pavement management systems and equipment, in use in other countries, before deciding which equipment to purchase. The decision would be subjectto Bank agreement(para. 3.33);
(vii) commencing1986, MOT's accountsfor the highway component,as for MAV, EC, and the Special Accountwould be auditedannually by the General Banking and Trust Company as an independent auditing organization acceptable to the Bank. The accounts and the auditors reports thereon would be sent to the Bank within four months from the end of the fiscal year (paras 3.40, 5.04, 5.15 and 5.17);
(viii) that the objectivesset for MAV in the forthcomingNational Plan will aim at increasing the profitabilityof the railway; as a part of that policy the charges for hauling freight traffic will be increased by at least the increase in the industrial production price index; and as a minimum the total of MAVs revenues would be not less than the sum of total operating expenses (includingdepreciatioa) and the amount by which debt serviceexceeds the provisionfor depreciation(para. 5.07).
(ix) that HC should take the necessaryactions to attain an oprating cost ratio of not more than 80 in 1988 and subsequent years (para.5.14).
6.03 During loan negotiations, the following conditions of loan effectivenesswere discussedand agreed:
(i) that subsidiary loan agreements be executed, by the Government and beneficiaries,to relend the loan proceeds to M&V and HC on the terms and conditions acceptable to the Bank, including repayment periods consistent with the lives of assets financed (para. 3.30, 5.09 and 5.16);
(ii) that MOT, MAV and HC would each have designatedan officer of their respectiveagencies to act as counterpartto staff of the ProjectCoordinators (para. 3.21). 1
6.04 With the understandings indicated above, in paras 6.01 to 6.03, the project would be suitablefor a Bank loan of US$75.0 million to the Republic of Hungary for a 15-year term including a three-year grace period. 51 -ANEX 1
HUNGARY
TRANSPORT(RAIL/ROAD) PROJECT
RAILWAYCOMPONENT
Scope and Contentof ProposedRailway Action Plan (1986-1990)
1. The contentof the Action Plan, includingkey indicators,which will be preparedfor Governmentapproval by October1985, is shown in Table 1 to this Annex.
2. The scope of the Action Plan will includethe operational, organizational,planning, financial and marketingobjectives, the expected benefitsand the indicatorsneeded to reflectprogress in implementingMAV's componentof the project and their impactboth on each sub-componentas well as on the railwaysystem at whole.
3. The Action Plan covers the followingmatters:
{i) the developmentobjectives, measures and activitiesnecessary to achieve the targetsand benefitswhich will be the result of:
(a) improvementand modernizatonof the Farencvarosmarshalling yard;
(b) improvementin track constructionand maintenance capability;
(c) developmentof containerizationof freight traffic;and
(d) a trainingprogram.
(ii) the impactof developmentof each projectsub-component on the entire activityof HungarianState Railways.
(4397D) - 52 -
TABLE 1
HUNM
TRANSPORT(RAIL/ROAD) PROJECT
Railway Comonent
Sumanry Contents of the 1986-90 Action Plan of the Hungarian State Railways (MAV)
I. The contents of the 1986-90 Action Plan relating to Parts At1. (21 and (31 of the Proiect
- development objectives by project comronents - results of the development shown by technical and economic indicators - financial results of the development the impact of the above results for the entire activity of the Hungarian State Railways (MAV)
II. The technical and economic indicators to be analyzed by project cgononents Actual Planned
1. Modernization of Ferencyaros Marshalling Yard
a) wagon-waiting-tine (in hours) in-out time b) utilization of the shunters (kinday) c) labor used in the marshalling activity (employee/wagon) d) Marshalling operation cost (Ft/wagon) 1/
2. Imorovement in track maintenance capability
a) planned for track maintenance - capacity for railway lines maintenance (track-km/year) - capacity for regulating switch maintenance (number of groups/year) b) labor used for track maintenance (employees/km) c) labor used for switch regulation (employees/switch groups) d) track maintenance cost (Ft/km) J/
3. Development of containerization of freight traffic
a) container freight traffic performance (tons-km/year) b) foreign exchange earnings in the container freight traffic (in US$/year) c) average container turn-around time (in days)
III. The impact of develooment of oroiect components for the entire activity of MAY
a) average dialy performance of freight wagons (km/day) b) wagon turn-around time (in days) c) average speed of freight trains (km/h) d) productivity of railway freight traffic (ntkm/ton of capacity) e) freight traffic income of MAV (in Ft per year) 1/ f) staff productivity (traffic unit 2/ per employee)
1/ In current prices. V/ Traffic unit (t.u.) is net-ton-km + passenger-km. - 53 - ANNEX 2 Page 1 of 2
HUNGARY
TRANSPORT (RAILIROAD)PROJECT
Outline of Terms of Referencefor Road Users' Contributions(RUC) Studcl'
A. Objectives
1. The study shall determinewhether the existingsystem and levelsof RUC for differenttypes of road vehiclesare adequateto ensure optimum utilizationand developmentof the road networkand to cover the infrastructurecosts, particularly, damages which they inflict on roads. Based upon analysesof the present situation,the study shall propose reasonablealternative remedies for correctingany distortionsor deficiencies which may exist in the presentsystem and levelsof-RUC.
B. Scope of the Studv
2. With the aim of economicefficiency in view, the consultantsshall for the currentsituation:
(i estimatethe costs attributableto road use;
(ii) allocatethese costs to the principalcategories of vehicles;
(iii) estimatethe total RUC made by each vehiclecategory and compare them to the correspondingroad use costs;
(iv) projectfuture revenue and assess economiceffects on the assumptionthat existing tax levels and vehicle regulationswill remain unchanged; and (v) proposechanges on the levelsand forms of contributionsthat would enhancethe efficiencyof the transportationsystem.
3. The study shall cover the entire road network dependingon the availabilityof information. The main focus of the study shall be on inter-urbannetwork.
C. Data, Local Services and Facilities to be Provided by the Government
4. The Government shall provide the consultants entrusted with the study with all availabledata on:
(i) presentpricing policy and transportregulations;
1/ The Government'sterms of referencewhich substantiallyconforms to this outlinewere reviewedduring negotiationsand found to be satisfactory. - 54 - ANNEX 2 Page 2 of 2
(ii) road costs and road transportrevenues, including national and local taxes;
(iii) the operationsand accountingsystems of the Governmentand local authoritiesresponsible for road and road transportmaintenance, operationand administration;and
(iv) such data on fiscaland financialpolicy which would materially assist the study.
D. Time Schedule
5. The study shall commence,including field-surveys, within 60 calendar days of the effectivedate of this contractand the consultantsshall submit the followingreports within the time period mentionedagainst each:
(i) InceptionReport - within three months of contracteffective date specifyingin particular:
(a) methodology;and (b) data requirementand availability(_ copies in Hungarian copies in English);
(ii) ProgressReport - Quarterlyafter the approvalof the Inception Report until conclusionof work;
(iii) InterimReport/Situation Analysis - A summary of the initial findingssurveying the presentsystem of road users' contribution,its financialand economicimplementations from the aspects of taxationand distributionof road funds,within five months of the contracteffective date, ( copies in Hungarian, _ copies in English);
(iv) Report on Estimationof ExistingVehicles - specific contributionsand attributablecosts - itemizedunder different types of taxes, fees, other payments,etc., within 12 months of contracteffective date, ( copies in Hungarian, _ copies in English);
(v) Report on future contributionsand attributablecosts for differentcategories of vehicles takinginto account presentand future costs of road investment,modernization, maintenance and congestion,highlighting the economicand financialimplications thereof,18 months from the contracteffective date { copies
in Hungarian,- copies in English);and
(vi) Draft Report - on impactof RUCs on commodityprices and alternativeproposals for RUC to increaseefficiency in the transportationsystem, within 24 months of contracteffective date and finalizationwithin 30 months from contracteffective date, incorporatingcomments from the Governmentand the Bank.
4397D/4 - 55-- ANNEX 3 Page 1 of 8 HUNGARY
TRANSPORT(RAIL/ROAD) PROJECT
Outlineof Terms of Referencefor TechnicalAssistance and Studies
for HungarocamionL'
A. General
1. In order to maintainand/or increaseits competitiveedge Hungarocamions(HC) will need the assistanceof consultantsto conduct studies in the followingareas:
(i) informationsystems; (ii) internationalmarketing; (iii) developmentof containerservices; and (iv) developmentof truck terminalfacilities in the Budapestarea. B. Obiectivesof the Studiesand Assistance
2. The objectivesof the proposedstudies - and of the specific technicalassistance in key areas - are as follows:
(i) informationsystems: to review,identify and advise of the best suitedhardware and softwareinformation equipment and programs so as to fulfillthe requirementsfor HC operationsand adiministration;
(ii) internationalmarketing: to reviewpresent marketing operations and practicesin Hungaryand abroad, in particularregarding the role of HC's foreignsubsidiaries, with a view to increase, throughsubcontracting, HC's capacityat no additionalinvestment in equipment;
(iii) containerservices: to reviewHC's share of the overseas ISO containermarket and to proposea strategyin servicesequipment and facilitieswhich would lead to:
(a) increasedcooperation with HungarianRailways (MAV) and other internationalrailways, and
(b) increasedcoordination with Hungarosped(HS) and/or other Hungarianand/or internationalfreight forwarders;
l/ Governmentand beneficiarycomments amplifying and prioritizingcertain aspects of this outlinewere reviewedduring negotiations and found satisfactory. - 56 - ANNEX 3 Page 2 of 8
(iv) truck terminal: to review the investmentrequirements, objectives,and rationalefor a truck terminalin the Budapest area offeringservices to foreign trucks,coordinating return-loads,and operatingas a pool of sub-contractedtruck and containercapacity.
C. Contentsof the Studies
InformationSystems Study
3. The consultantwill reviewinter alia the following:
(i) currentsystems, documents and proceduresfor in-housecontrol of:
- personnel administration; - budgetary control and projections; - accounting,including revenue and expensecontrol, and projections; - commercialbookings and projections; - rate setting; - shipment control; - preventivemaintenance; and - fleet control. (ii) current systems,documents, procedures and communicationsfor the controL of:
- truck and container dispatching; - internationalvehicle control and location; - en-route vehicle communications; - internationalcomnercial booking control; - fuel efficiency control; - trip-time control; - subcontractedcapacity utilization; and - capacityavailability and constraints. 4. On the basis of the above the consultantwill identifythe most suitablehardware and softwareelectronic equipment to fulfillthe required needs, and will proposedadequate programs and investmentrequirements for items listed in 3(i) and 3(ii).
5. In addition,the consultantwill price the requiredhardware and softwarerequirements and suggesta long list of supplierssuitable for InternationalCompetitive Bidding (ICB) in accordancewith Guidelinesfor Procurementunder World Bank loans.
6. The consultantwill specificallyassess the timing,quantity and cost of technicalassistance required, if any, to implementthe proposedprograms. - 57 - ANNEX 3 Page 3 of 8
7. It is estimatedthat this study will requireabout six (6) weeks of a foreign consultant effort - of which four (4) weeks in the field - at an overall foreigncost of US$23,000.
InternationalMarketing Study
8. The internationalmarketing of HC needs to be improvedin scope, role and penetration.
9. In particular,the marketingscope of HC's agencynetwork should be expanded to includean increasedshare of: containerizedfreight, foreign subcontractedtruck capacity,and modal interfacewith europeanrailways and shipping lines (intermodalshipments).
10. Specifically,the role of HC's foreignagency network, should be expanded to includethe negotiationof inbound-outboundcontainer freight contracts through port areas and/or through freight-forwarding door-to-door, port-to-door, and door-to-port arrangements.
11. In the same manner, the penetration of HC's overseas marketing should be complemented through more extensive use of door-to-door "thru-bills-of-lading" for containerizedfreight either throughHS or directly by HC as prime contractor.
12. The consultant will reviewthe presentscope, role and penetration of HC's marketingin Budapestand at each one of HC's foreignagencies. On the basis of the above the consultant,with the assistanceof an "ad hoc" foreign expert,or experts,as necessarywill identifythe potentialfor:
- increaseduse of subcontractedtruck capacityon traffic,in particularcontainerized traffic, destined to Hungary'from europeanports or agencycities, and vice versa;
- increaseduse of combinedtruck/railway services for same origin; destinationsand freight,in particularcontainerized freight, as above;
- increasedcoordination with HS and/or other Hungarianor European freightforwarders on door-to-doorcontainerized overseas traffic originatedand/or destinedto Hungary;
- possibleuse of combinedTIR and/or FIATA "bills-of-lading"on overseascontainerized shipments (truck-rail, truck-ship, truck-rail-ship)with HC acting as prime-carrier/contractorfor revenuecontrol purposes.
13. The consultantwill review the pricingprospects for the potential trafficmentioned in paragraph12, and will assess the desirabilityof such - 58 - ANNEX 3 Page 4 of 8 traffic for HC on a cost plus profit basis taking into account the increased overhead cost requirements at HC's foreign agency network. The consultant should substantiate his findings in traffic/revenue projections for five (5) years.
14. Should the potential traffic volume-revenue projections show positive results, the consultant will propose adequate measures of staffing, commerical support and control, followed by a strategy for the development of adequate sales systems and programs at headquarters and at the various foreign agencies. The development measures will be substantiated in a program for the next five (5) years.
15. When reviewing traffic development potential and economic parameters the consultant will visit'HC's most important agencies and traditional markets and familiarize himself with the commercial behaviour of freight-forwarders, trucking and shipping companies operating in the areas.
16. The consultant will assess the time, cost and quantity of technical assistance required for training of HC's commercial staff in Hungary or abroad, and will propose a program (including technical visits abroad and/or in-house seminars. as convenient) "ad hoc".
17. It is estimated that the proposed study will require about four (4) man-months of local consulting effort supplemented by one (1) man-month of a foreign marketing expert and by one (1) man-month of a freight-forwarding expert, at an overall foreign expert cost of US$30,000.
18. It is estimated that the marketing study could be completed in about six (6) weeks with a draft preliminary report at the end of the seventh week.
Container Services Study
19. In the modal split of Hungarian international transport HC holds a minor share of about 3Z (30 million tons by rail against 1 million tons by road per year). This share is even more negligible in the transport of international containerized freight and should improve significantly.
20. The container services study should review HC's share of the overseas ISO container movements, the potential for containerization of exports in Hungary, and the price trends for international transport of ISO c.ontainerson different routes by the various surface modes.
21. The consultant should study the present and potential trends for inbound and outbound overseas and continental ISO container movements by origins, destinations, ports of entry and exit. It should make projections accordingly. - 59 - ANNEX3 Page 5 of 8
22. On the basis of the findingsof paragraphs 20 and 21. the consultant should:
(i) provide an economicdiagnosis of containerroutes to/from Hungary from/toports by the followingmodes anci,orsituations:
(a) roads only (b) combinedroad/rail (c) containeras "return-load"freight (d) overseasdoor-to-door container controlled by HC.
(ii) proposea strategyof marketing,services, equipment and facilitiesleading to capturea more substantialshare of containermovements in those commoditiesor routes providing highereconomic incentives as shown in 22 (a).
(iii) proposea strategy to promotecooperation with MAV and other europeanrailway in routesand/or for originsand destinations where road transportis not competitive;
(iv) proposea plan for marketingMAV inboundand outboundcontainer trafficthrough HC's internationalagency network;and
(v) proposea plan for increasedHC and HS coordinationin the handlingof door-to-dooroverseas container freight.
23. The container services study should be carried-outparallel to, or in connection, with the proposed marketing study.
24. It is estimated that the container services study would require about two (2) man months of local consultingeffort supplementedby one (1) man-monthof a foreignexpert in containerizationat an overallforeign cost of about US$15,000.
25. It is estimatedthat the containerstudy could be completedin about four (4) weeks with a draft preliminaryreport at the end of the fifth week.
FeasibilityStudy for a Truck Terminal
26. HC has decidedto invest in a truck terminalfacility. The proposed investment would be jointly owned by HC and other institutions. The rationale for the truck terminal facilitywould be mainly to provideservices to foreign trucks destined to or in transit throughHungary, to coordinatereturn loads for such trucks and to operateas a pool of sub-contractedtruck and container capacity.
27. A tentative location for the terminal facility has been proposed in land adjoining HC's No. 2 Maintenance Depot. The proposed truck terminal - 60 - ANNEX 3 Page 6 of 8
facility would therefore be complemented by the maintenance and container yard services already available in HC's No. 2 Depot.
28. The present document outlines the terms of reference for the feasibility study of the terminal facility.
29. Objectives of the Truck Terminal: The underlying objective of an international truck terminal in the Budapest area is to offer services to visiting and transit vehicles in particular for:
(i) technical requirements and maintenance; (ii) return-load facilitation; (iii) storage-in-transitof goods; (iv) inland container depot receiving and dispatching; (v) customs and document formalities; (vi) hotel, restaurant, telecomnunicationsand banking services; and (vii) parking areas.
thereby contributing to decongesting the urban area of truck traffic.
30. Contents of the Study: the study will encompass three stages:
(i) the first stage will include the analysis of current demand, current costs and demand projections;
(ii) the second stage will include the economic and financial feasibility studies to determine the appropriate scale of an international truck terminal;
(iii) the third stage will inciude the necessary technical studies for establishment of the international truck terminal up to the preliminary engineering stage, and prepare the terms of reference, estimates and technical specifications for the final engineering.
31. The study shall cover the entire proposed system of services and will be aimed at recommending the most appropriate investment program. In all cases, economic criteria (benefit-cost ratios, net present values (NPV) of the investment and economic rate of return (ERR) shall be computed and savings identified. Their sensitivity to such uncertain variables as vehicle load factors, traffic diversions to the railway and reduced urban congestion shall also be assessed.
32. First stage: the consultant shall conduct an analysis of current demand classifying and quantifying truck and container international movements - 61 - ANNEX 3 Page 7 of 8 converging in and/or in transit through Hungary. He will, in particular, evaluate empty-return movements and evaluate the potential and marginal cost of subcontracting empty capacity.
33. The consultant shall conduct an analysis of current transportation costs with and without terminal services, and will determine costs incurred by loss of time, theft, damage, handling and storage, container-to-truck transfers, costs of congestion, foreign exchange costs, empty-return costs, etc.
34. Finally the consultant shall make demand projections for (10) years, with and without truck terminal facilities for road traffic of trucks and containers.
35. Second Stage: the second stage will encompass firstly, an analysis of the projected capacity of the various services to be offered by the terminal; it will also include a yearly statement of projected income and expenditure for the proposed project. Secondly, it will encompass the pre iminary design, costing, economic and financial justification of the investment, the program of works for the selected project, and the proposed administrative framework for operating the facilities.
36. On the basis of these detailed costs, the economic feasibility of the project will be calculated (NPV, ERR).
37. A financing plan and a work program will be prepared. The financial cost estimate for all the works will be broken down to show local and foreign exchange cost components. The foreign component will include such items as depreciation on equipment, certain materials and goods, remuneration of expatriate personnel, and expenses incurred by, and profit accruing to, the foreign contractors, if any. The local component will include cost of site purchase, materials and other domestic products, wages of local personal taxes, etc.
38. The consultant will study possible charges to users of the services offered in the proposed project, together with all other associated income, in order to proposed a proper cost recovery system. The consultant will project income and expenditure estimates, cash flows and draw up yearly financial statements.
39.- On the basis of this calculation and of the income projections, the financial feasibility of the project will be calculated, together with financial statements for a ten-year period.
40. Third stage: this stage will include the technical studies for the establishment of the terminal up to preliminary engineering and preparation of the terms of reference for the final engineering, including technical specifications and contractual bidding documents. - 62 - ANNEX 3 Page 8 of 8
41. Manpower and Reporting Requiirements: It is estimated that the proposed study would require about nine (9) man-months of local consulting effort and about three (3) weeks input of a foreign expert at a foreign cost of US$12,000.
42. The consultants should prepare the following reports:
(i) interim report, at the completion of the first stage (first month);
(ii) draft final report at the completion of the second stage (second month); -
(iii) final report at the completion of the study (-thirdmonth).
Technical Assistance and Visits
43. The proposed studies would be complemented with technical assistance in Hungary and/or technical visits abroad, as required, on an "ad hoc" basis. The foreign cost component for technical assistance and visits can be estimated at around US$20,000.
(4397D/12) - 63 -
ANNEX4
HUNGARY
TRANSPORT (RAIL/ROAD) PROJECT
Railway Component
Design Characteristics of Railway Works Ferencvaros East Marshalling Yard
1.0 Capacity of Yard
1.1 Designed capacity of marshalling yard 4.500 wagons/day 1.2 Number of distribution-departuretracks 32 tracks 1.3 Number of receiving tracks 14 " 1.4 NIumber of retarders 4x2=8 units
2.0 Operational Performance
2.1 Pushing speed to hump 1.5 mlsec 2.2 Permitted speed in distribution group 4.8+0.2 m./sec 2.3 Distance between two wagons(between axles) 16.0 m 2.4 Axle load: maximum 23.0 t/axle minimum 4.5 " 2.5 Minimum wheel load 2.4 t 2.5 Maximum wagon length 20.0 a 2.7 Rolling resistance: maximum (without wind effect) 7.5 kp/t minimm 1.0 of 2.8 Maximum length of wagon group 60.0 m
3.0 Secondary continuous braking and speed regulating system
3.1 Maximum energy absorption at the system; Eca = 1,500J, at speed of V = 4.25 + 0.2(m/sec). 3.2 Maximum energy absorption by open retarder Ecfa < 20J, at speed of elements: V = 1.5 + 0.2(m/sec). 3.3 Minimum safe running speed Vm= 20 km/h 3.4 Each retarder element is designed to accept a minimum of one million cycles(axle passings) without maintenance.
(4397D/21) - 64 - AMNEX5 Page 1 of 6
HUNGARY
TRANSPORT (RAIL/ROAD)PROJECT
RAILWAYCOMPONENT
FinancialAnalysis
A. General
HungarianAccounting Practices
1. Both MAV and HC prepare financial reports using stanidardformats presented by MOF. The financial reports received by the mission from both agencies were made in a form agreed by the Bank for use in previous Bank projects. Althoughthe normal Hungarianaccounting practice in consolidating accountsfrom differententerprises is to make line by line additionsof income account and balance sheet items, Bank staff were assured that MAV had eliminated inter-regional balances and transactions resulting from the consolidationof accountsfrom its regionaldirectorates.
2. Other principalvariations from generallyaccepted initernational accountingprinciples concern inventories,which are valued at cost and not at estimatedrealizable value, and disposalsof assets,which are adjusted directlyin the balance sheet and do not affect the income account. A further variation,which arises from Hungariantax law but does not affect the accountspresented, is the practiceof reducingthe tax liabilityby charging to incomeaccount the repaymentsof loans from the State DevelopmentBank. Similarly,voluntary transfers to the reservefund, as in 1989 and 1990 in the case of HC, reduce tax liabilitywhile after tax profit is reducedby the amountof the transfer.
3. An enterprise'safter tax profit must be allocatedto three funds - the ReserveFund, the IncentiveFund and the DevelopmentFund, each of which in the past has been held in a separateaccount with NBH. This segregationof the accountsby NBH no longer appliesafter 1984. The use of the Reserve Fund has generallybeen restrictedto cover losses,or to bring funds availableto the organizationsto planned levels. Enterpriseshad, by law, to transfera proportion(generally 20X) of after tax profitsto this fund. However, transfers to the reserve fund are now voluntary and the obligatory transfers are no longer made. From the Incentive Fund the enterprises may make bonus paymentsto employees,to stimulateoutput and to reward meritorious performance. However,the cost to the enterpriseof making such payments is heavy since it must pay a steeply progressivetax on all moneys so paid, and the tax paid is nearly double the incentive payments. The balance of after tax profitsgoes to the DevelopmentFund which is used to financeworking capitaland investments.As the transfersto and from each fund depends on - 65 - ANNEX 5 Page 2 of 6
several factors such as tax rates, annual capital needs etc., the presentation in the forecast balance sheets has been simplified to show the Reserve Fund and other funds.
B. MAV
4. International Traffic. Hungary is a comparatively small landlocked country and it is not therefore surprising that in traffic volume (NTKm), international traffic (54% of total in 1984) is bigger than domestic traffic, although in tonnage, amounting in total to 120 million tonnes, the proportions were: domestic - 601, export/import - 26%, and transit - 14%. MAV's international traffic, including imports of coal, oil and ores as well as exports of more highly rated commodities, fell by 81 between 1981 and 1982 because of the economic downturn in Europe it that time. Since then international traffic has grown at an average rate of approximately 2% per year and this trend is forecast to continue through the period of the project. MAV is a member of UIC and has excellent operational and commercial relations with railways of countries on all sides. The Hungarian part of a new Yugoslavian border station at Subotica, which will combine operational, commercial and customs facilities, has been completed and will become operational in the near future when work on the Yugoslav side is completed. This will greatly facilitate import/export traffic by rail, with and through Yugoslavia. Traffic is presently restricted by the inadequate border facilities which result in an inability to schedule trains to carry all the offered traffic. The expansion of international traffic will also be aided by the opening, this year, of facilities which will double the capacity for bogey changing' on the border with USSR. As the charges for international and transit traffic are higher than those for domestic traffic, MAV's revenues will benefit more than proportionately from the increase in volume.
Domestic Freight
5. Volume of MAV's domestic freight traffic, which had been steady over a number of years up to 1982, fell by 91 in the following two years the introduction of a five-day working week. This almost eliminated the practice of loading and unloading of wagons during week-ends and increased wagon turn around time. New wage regulations, which took effect in January 1985, give incentives to load and unload during week-ends and are expected to remedy this situation, thus increasing MAV's productivity and its ability to carry the traffic offered. Other factors which should result in the achievement of the forecast 2% per annum growth in freight traffic are: (i) the removal of bottlenecks on main lines, (ii) marshalling yard and terminal improvements, which would be implemented under the project, and (iii) the construction of industrial sidings, for which government grants are available. The freight traffic forecast is consistent with the planning objectives of NPO for an increase in freight transport of up to 101 over the next five-year period, with railways slightly increasing its share. NPO's forecast is realistic and makes allowance for rationalization of production and distribution processes.
1/ Wagons are switched from standard gauge to broad gauge bogeys and vice versa at the border. - 66- ANNEX 5 Page 3 of 6
Passenger Traffic
6. MAV's passenger traffic, which by 1983 had fallen by about 7% from its 1980 level rose by 2% in 1984. Urban transport planning emphasizes multi-modal aspects of transport with both rail and buses feeding Budapest's peripheral underground stations. MAV is making determined marketing efforts to increase its international passenger traffic (15% of total PKm last year) with the formation of MAVTOURS with offices in Vienna, Frankfurt and other foreign centers. MAVTOURS will work closely with hotels and other tourist agencies. Passenger traffic forecast is for an overall increase of 1% per year in volume (PMm) over the project period.
7. Costs. As with most railways, wages is the biggest expense item in MAV's income account, comprising 33% of the total in 1984 while depreciation and materials each comprised 19%. The materials proportion appears high but includes maintenance materials, spare parts and also some construction materials. The cost of the construction element including direct overheads, is credited to the income account under 'Other Revenue'. Other expenses, comprising about 11% of total operating costs, include, as main constituents, contract maintenance, wagon hire, hire of computer capacity and local delivery services. Interest charges include interest on short term debt for loans from NkH for working capital, made necessary principally because payments from other railways are sometimes very considerably delayed. Until 1984, a municipal community tax of 15% on pretax profit was paid by railways and then income tax on a sliding scale (but generally totalling about 45%) of taxable income (pretax income less municipal tax). From 1985, municipal tax is no longer payable and the tax figure is calculated in three parts as 35Z of pretax profit plus a property tax of 1.5% of value of net fixed assets (with the exception of certain infrastructure items), and a levy of 10% on salaries and wages. For future years, tax is estimated to be around 50% of pretax profit. Tax is paid monthly on forecast figures and adjusted after the end of the year.
MAV; Financial Forecasts
8. MAV's financial results are forecast to improve due to increased traffic, modest improvements in operational efficiency resulting from investments, and the implementation of its action plan. Table 1 to this Annex assumes an increase in freight rates at least equal to forecast inflation. - 67 -
ANNEX5 Page 4 of 6
9. Cash flow forecasts for MAV up to 1989 are shown in Table 2 to this Annex and a financing plan for railway investments for this period is in Table 5.4 of the report. Provisions shown under 'Sources' in the Cash Flow include chiefly provisions for technical development for which expenditures are included under 'Other Uses'. Other uses also includes contributions made by MAV to public utilities and to local authorities for infrastructure developments, a Hungarian System of regional development. Balance sheets are shown in Cable 3 to this Annex in the form which is given by MAV without netting of current assets and liabilities, although these are shown net in the financial summary in Table 5.3 of the report.
10. MAV's comparatively small borrowings leave no problems with the debt service coverage:
1986 1987 1988 1989
Debt/Service Coverage 13.1 12.8 12.8 12.7
1986 1987 1988 1989
Current Ratio 3.5 3.6 3.6 3.3
C. Hungarocamion
11. Traffic. HC's traffic figures in millions of paid km, for 1981 to 1984, together with forecasts to 1990 are as follows:
1985 1986 1987 1988 1989 1990 1981 1982 1983 1984 Fore- Fore- Fore- Fore- Fore- Fore- Actual Actual Actual Estimate cast cast cast cast cast cast
98.2 113.5 121.6 133.7 138.2 139.6 150.6 161.7 173.0 184.5
The pattern of HC's traffic has changed somewhat from 1980 and 1981 with unsettled political conditions causing Middle East traffic to form a smaller proportion of the traffic total. On the other hand, traffic with Western Europe has increased, as instanced, for example, by over 2000 vehicle trips to England in 1984 compared to only 850 in 1980. HC's traffic in 1984 improved considerably from its previous year with the fleet fully booked for most of the year, whereas the first four months of 1983 were comparatively slack. HC is nevertheless conservatively forecasting only small traffic increases for 1985 and 1986 and then larger increases up to 1990 as a result of the acquisition of modern vehicles with funds from the proposed loan and co-financing. - 68 - ANNEX 5 Page 5 of 6
12. FinancialDetails and Targets. Summarizedbelow are HC's financial results for 1981 to 1984 and forecastsfor 1985 to 1990. Fi.uresare in millionsof Forints.
1981 1982 1983 1984 Actual Actual Actual Estimated
OperatingRevenue 4131 4367 4553 4961 OperatingExpense 2911 3277 3731 4151 Pretax Profit 1221 1049 764 716 OperatingRatio Z 70 75 82 84 Return on Resources Z 41 34 21 16
1985 1986 1987 1988 1989 1990 Fore- Fore- Fore- Fore- Fore- Fore- cast cast cast cast cast cast OperatingRevenue 5245 5462 6071 6878 7729 8623 OperatingExpense 4335 4621 5018 5441 6021 6562 Pretax Profit 816 742 936 1300 1554 1881 OperatingRatio Z 83 85 83 79 78 76 Return on Resources X 18 15 18 23 25 29
The Recent Past
13. The figures in the first table above show a decline in RC's pretax profit from Ft 1.22 billion in 1981 to an estimatedFt 0.71 billion in 1984, with operatingratio increasingfrom 70 to 84 and returnon resourcesfalling from 41Z to 16X. The reduction,however, is from a high point in 1981 when carriers could choose their loads and could virtuallYfix their own rates for traffic to and from the Middle East. It signifiesrather a return to more normal tradingconditions after a boom, than a drop from normal to something worse. Thus, the 16% returnon resourceswhich will be earned in 1984 is a healthy figure,even thoughit be far from the 41X returnearned in 1981. The change in tradingconditions is characterizedby a reductionof 9X, between 1981 and 1983, in revenueper paid km from internationaltransport operations. However,expansion of HC's total internationaltransport operationwith a switchto Western Europeanmarkets (more competitivebut with very much better road conditio-ns,less border delays, fastertransit times and more opportunityfor return ioads)enabled the increasein unit costs during this period to be held to 4X.
14. Detailed incomeaccounts for HC are shown in Table 4 of this Annex. Materialswhich compriseabout 18Z of expensesin 1983 are mainly engines, gear boxes and spare parts for the vehicles. Fuel, presently,Ft 9.8 per liter for diesel,also comprises18X of costs,with depreciation14Z and salaries 13%. Payroll taxes make up about 25Z of the salariestotal. Depreciationis at Governmentapproved rates and normallyresults in the write - 69 -
ANNEX 5 Page 6 of 6
off of vehicles in a little over six years. Other expenses is the biggest expense item in HC's income account covering vehicle and general and workshop overheads but principally transit fees paid to countries whose borders are traversed by HC's vehicles. As an example, each transit in 1983 of one of Hungary's immediate neighbors cost a fee equivalent to US$170 and HC's vehicles in that year made some 83,000 trips abroad, though most avoided this country. Sample cost sheets for actual vehicle trips are in project files.
Forecasts
15. RC's financial forecasts summarized above (para. 12) show 1985 and 1986 continuing at about 1984 levels of pre tax profit and then improving from 1987 onwards, as traffic expands and margins increase reflecting acquisition of the modern fuel and load efficient vehicles. Allowance has been made in the forecasts for inflation and for increases in costs related to the expansion of HC's operation. The reduction in other expenses in 1985 results from the coming into operation, at the end of 1984, of large, new and well-equipped vehicle workshops, outside Budapest, which will greatly enhance the efficiency of vehicle servicing and maintenance.
16. Cash flow forecasts are shown in Table 5 of this Annex and a financing plan for the investment period 1986-90 is shown at Table 5.9 of the report. Forecast balance sheets are in Table 6 of this Annex. Long-term loans shown prior to 1986 are from NBIIfor vehicle purchases (Hungarian RABAs) With interest rates of 13% to 14% and repayable over five years. Figures in Table 5 include both the Bank's proposed US$17.0 million loan and co-financing. It has been assumed that lending of each will run concurrently, with on-lending terms of about 14% interest aud a repayment period of six years. Other sources includes sales of vehicles (see para. 2 above).
17. With comparatively low borrowings, HC's debt service coverage is good and does not fall below 3.3. Debt equity ratio is also satisfactory with a maximum of 24/76 in 1990. Current ratio and liquid ratios are satisfactory and do not fall below 1.5. Agreement was reached at negotiations that HC will take all necessary actions to ensure that its operating ratio will be not more than 80 in 1988 and subsequent years. - 70 - ANNEXS Table 1
HUNGARY
TRANSPORT(RAIL/ROAD) PROJECT
HungarianState Railways (MAV)
Income Accounts and Forecastsfor 1983to 1989 (FT million)
1983 1984 1985 1986 1987 1988 1989 Actual Estimate Forecast Forecast Forecast Forecast Forecast
Operating Revenue
Passenger 4.694 4,714 4.761 4.809 4.857 4.905 4.954 Freight 25.409 26,033 28.041 30,604 33.245 35.944 38,679 Other 5,045 4,690 5.035 5,477 5.931 6.392 6.856 Sub-total 35.148 35,437 37,837 40.890 44.032 47,241 50.490 Subsidy 5.726 3.883 4.503 4.840 5,188 5.529 5.870 Total Operating Revenue 40,874 3. 42.340 45.730 49.220 52.770 56.360
OperatingExpenditure
Materials 7.426 6,860 7,030 7.690 8.260 8,830 9.400 Fuel 5,100 5,240 5,650 6,400 6.870 7.340 7.810 Wages 10.073 11,792 12.620 13.480 14.330 15.170 15,980 Other Expenses 5.675 3.876 3,920 4,230 4,540 4,860 5.170 Provisions 749 760 800 860 910 970 1,020 Sub-total 29.023 28.528 30.020 32.660 34.910 37.170 39.380 Depreciation 6,391 6.740 7.210 7.720 8.200 8.710 9.200 Total Operating Expenditure 35.414 35.268 37.230 40.380 43.110 45,880 48.580
Net Revenue 5,460 4.052 5,110 5.350 6,110 6.890 7.780 Interest 444 584 620 640 680 710 750 Pre-Tax Profit 5,016 3,468 4.490 4.710 5.430 6.180 7,030 Municipal TaA 752 520 - - - - Income Tax 1,963 1,387 2.877 2,783 3.187 3.522 3.690 After Tax Profit 2.301 1.561 1.613 1.927 2.243 2.658 3.340
Ratios
OperatingRatio X 87 90 88 88 88 87 86 ReturnBefore Tax on ResourcesX 5.1 3.5 4.5 4.7 5.5 6.2 7
Source:MVA and Bank Mission
(43970122) - 71- ANNEX5 Table 2
HUNGARY
TRANSPORT(RAIL/ROAD) PROJECT
Hungarian State Railways (MAV)
Cash Flow 1983 and Forecasts for 1984 to 1989 (FT million)
1983 1984 1985 1986 1987 1988 1989 Actual Estimate Estimate Estimate Estirate Estimate Estimate
Sources
After Tax Profit 2.301 1.561 1,613 1,927 2.243 2.658 3.340 Depreciation 6,391 6.740 7.210 7.720 8.200 8,710 9.200 Provisions 831 875 900 976 927 1.088 1,138 Long Term Loans 323 60 - - - - - IBRD Loan - - 9 298 260 298 112 Other Sources - 175 25 43 120 187 232 Grants - 400 100 - - - -
Total Sources 9.846 9.811 9,857 10.963 11,751 12,941 14.022
Applications
Transfers to State Budget 932 1.175 - - - - - Debt Repayment 23 27 104 104 104 145 185 Investments 6.531 6.436 6.045 8.391 9.018 9.489 11.033 Increase (Decrease) in Working Capital Other Than Cash 1,178 1.946 1,939 475 671 646 513 Incentive Fund Payments 580 1.286 587 628 671 71'3 768 Other Uses 1.966 1.016 1.357 1.271 1,205 1.894 1.401
Total Applications 11.210 11.886 10.032 10.869 11.669 12.892 13.900
Surplus (Deficiency) (1,364) (2.075) (175) 94 82 49 122 Opening Cash Balance 4.694 3,330 1.255 1.080 1,175 1.256 1.306 Closing Cash Balance 3,330 1.255 1.080 1.175 1.256 1.306 1.427
Source: NAV and bank Mission
(43970/23) - 72 - ANNEX 5 Table 3
HUN6ARY
TRANSPORT(RAILIROAD) PROJECT
Hungarian State Railways (PAY)
Balance Sheet 1983 and Forecasts for l9B4to 1989 (FT million)
1983 1984 1985 1986 1987 1988 1989 Actual Estimate Estiuate Estimate Estimate Estimate Estimate
ASSETS Gross Fixed Assets 161,990 167,660 172.150 177.640 183.930 190.920 198.710 Less Uepreciation 83,312 90.500 97.600 104500 111.900 119.600 127.600 Net Fixed Assets 78,678 77,160 74,550 73,140 72,030 71.320 71,110 Assets Under Construction 4.438 4.438 4.438 4,438 4,438 4,438 4,438 Other Non-Current Assets 1,994 2,005 2,020 2.035 2,050 2.065 2,080 Subtotal 85.110 83.603 81.008 79.613 78.518 77.823 77,628 CurrentAssets Cash L Bank 3.330 1.255 1,080 1.175 1.256 1.306 1,427 Inventories 9.204 10.106 12.131 13.142 13.175 12.710 13.187 AccountsReceivable. etc. 5.077 8,119 8,624 8,233 8.593 10,059 10.938 Subtotal 17.611 19.480 21.835 22.550 23,024 24.075 25,552
Total Assets 102,721 103,083 102.843 102.163 101.542 101,898 103.180
LIABILITIES Long Tern Uebt 461 432 304 494 565 644 453 Other Non-Current Liabilities 1.336 1.495 1.099 192 lS 326 333 Subtotal 1.797 1.927 1,403 686 680 970 786 CurrentLiabilities Short Term Loans 1,242 2,607 3,193 3,564 3,052 2,455 2,640 AccountsPayable, etc. 1,519 1.993 2J01 2.923 3.312 4,165 5,154 Subtotal 2,761 4,600 5,494 6,487 6.364 6,620 7.794
Total Liabilities 4.558 6.527 6.897 7.173 7,044 7.590 8.580
EQUITY Reserve Fund 2.100 394 - - - - - Other Funds 93.762 94.601 94.333 93,063 92.255 91,650 91.260 Current-YearProfit 2,301 1,561 1,613 1,927 2,243 2,658 3,340
Total Equity 98.163 96,556 95.946 94.990 94.498 94.308 94.600
Total Liability & Equity 102.721 103.083 102.843 102.163 101.542 101.898 103,180
Current Ratio 6.4 4.2 4.0 3.5 3.6 3.6 3.3 CurrentAssets Less Inventoriesto Current Liabilities 3.0 2.0 1.8 1.5 1.5 1.7 1.6
DebtEquity Ratio 0.5/99.5 0.5/99.5 0.5/99.. 0.6/99.4 0.7/99.3 0.8/99.2 O.S/99.5
Source.M and Bank Mission Decewber 1984 (4397U/24) - 73 - AlmEXS
TRANsPeRr(RAIL/ROMO PROJECT
Hunuaroca.on
InceoeAccounts and Forecuts for 1983 to 190 (FT million)
1913 19U4 19S5 1986 In? 1988 1969 1990 Actul Estinte F casst Forecast Forecast Foecat Forecat Forest Operating Revenue International Transport 4,364 4,752 5,051 5.273 5,886 6.682 7,522 8,405 Other 189 209 194 189 US 196 207 21l Total 4.553 4.961 5.245 5,462 6.071 6.878 7.729 8.623
Operating Expenditure materials 661 696 769 828 328 1,032 1,139 1,248 Fuel 684 764 652 902 1.015 1,141 1.271 1.40S Salaries 4U8 606 671 721 763 831 901 981 Cost of Resales U7 118 126 135 144 152 161 169 Other Costs 1.222 1.380 1.2L7 1.376 1.452 1.513 1,719 1U868 Sub-Total 3,202 3,566 3.65 3,962 4.303 4.669 5.191 5.672 Depreciation S29 585 640 659 715 772 830 830 Total 3.731 4,151 4.335 *.U621 5018 5.441 6.021 6.562
Net Revenue 822 810 910 841 1,053 1.437 1.706 2.061 Interest as 94 94 99 117 137 154 160 Pre Tax Profit 71i 7W 93 ; 1T TIM 1 T. Municipal Tax 114 107 123 111 141 195 255 320 Incme Tax 296 244 267 351 358 497 472 522 To Reserve Fund 2! - -_ - . - 100 400 After Tax Profit 354 365 426 280 _608437 727 639
Ratios: Operating Ratio 82 84 83 85 83 73 78 76 Return before Tax on ResourcesSI 21 16 18 1S 18 23 2S 23 Debt Service Coverage 6.2 5.2 7.0 4.5 4.2 3.3 3.9 3.4
Notes 1/ The voluntary transfers to Reserv Fundreduce Tax Liability / Operating Expenditure divided by Operating Revenue 3/ Pretax Profit as a percentageof net Fixed Assets in Operation plus inventories plus salaries. 4/ After Tax Profit plus interest plus depreciation divided by debt service (repaments plus Interest)
Source: Hungarocamionand Bank mission
(43970/19) -74 ANSEX5
HUNGARY
TRAHYORT(FAILCOIAD) PROJECT
Hurgerocamion
Cash Flow 1983 and Forecasts for 1984 to 1990
Total 1983 1984 1985 1986 1987 1988 1989 1990 1986/90 Actual Estimate Forecast Ferecast Forecast Forecast For.east rarecast Forecast Sources After tax profit 354 365 426 280 437 60' 727 639 2,691 Depreciation 529 585 640 659 715 772 830 890 3,866 Long Term Loans 25b - 270 - - - IIRO Loan - - - 382 432 332 406 497 2.099 Other Sources 635 444 90 153 183 724 129 142 831 Transf r to Resarve 100 400 500
1,769 12394 1,426 1.474 1.767 1.986 2i9 2 Z,560 9,987
Applications Transters to State Budget 80 127 82 131 1I1 151 181 184 793 Debt Repayment 93 107 172 131 186 117 392 439 1,46S Investments 795 816 815 929 1.027 982 1,140 1.254 5,332 Increase (Decrease) in Wiorking Capital Other ThanCash (152) (252) 13 84 29 (49) 57 (47) 74 Incentive FundPaynents 48 40 48 51 60 65 71 81 328 Other Uses 1.360 741 287 1Z6 ?91 S20 316 531 1,784
2.224 1.579 1,417 1.452 1,744 1.986 2.157 2,442 9,.71
CashSurplus (Deticit) (455) (185) 9 22 23 35 126 206 OpeningCash Balance 852 397 212 221 243 266 266 301 221 Closing Cash Balance 397 212 221 243 266 266 301 427 427
Source; Hungerocamionand Bank Mission
(43970/20) - 75 -
ANNEX5 Table 6
HUNGARY
TRANSPORT(RAIL/ROAD) PROJECT
Hungarocariion
Balance Sheet 1983 and Forecasts for 1984-90 (FT million)
1953 1°34 1985 19856 1987 1988 1989 19S0 Actual Estimate Estimate Estimate Estimate Estimate Estimate Estimate Assets
Gross Fixed Assets 4.359 5.165 5,556 5.S83 6.321 6,557 7.073 7.535 Less Depreciation 1,530 1.674 1,890 1.972 2.124 2.150 2,355 2,454 Met Fixed Assets 2.829 3,491 3,666 3,911 4,197 4,407 4,718 5,081 Assets Under Construction 326 15 14 15 16 17 17 469 Other Non Current Assets 19 21 22 24 25 27 29 30 Sub-Total 3,174 3,527 3.702 3,950 4,238 4,451 4,764 5.580
Current Assets
Cash& Bank 397 212 221 243 266 266 301 327 Inventories 248 260 287 309 346 385 425 466 Accounts Receivable etc. 1,042 1,090 1,172 1.254 1.335 1.416 1493 1.S67 Sub-Total 1.687 1.562 ),6&%I 1,806 1.947 2.067 2.219 2.360 Total Assets 4,861 5,089 5,382 5.756 6.185 6.518 6.983 7.940
Liabilities and Equity Long Term Mebt 367 330 428 654 874 1.039 1,202 1.461 Other Non Current Liabilities 304 370 398 425 453 480 507 532 Sub-Total 71 700 826 1.079 1.327 1.519 1,709 1,993
Current Liabilities Short Term Loan 220 250 266 116 126 43 66 29 Accounts Payable. etc. 382 597 649 792 844 JjO67 1.078 1.252 Sub-Total 602 847 915 908 970 1.110 1,144 1.281
Total Liabilities 1.273 1,547 1,741 1,987 2,297 2,629 2 3,274
Equity Reserve Fund 136 50 50 - - - 100 500 Other Funds 3,098 3,127 3.165 3,489 3.450 3.281 3.453 3.527 Current Year Profit 354 365 426 280 438 608 577 639
Total Equity 3,588 3,542 3,641 3,769 3,889 3,889 4,130 4,666
Total Lidbilities& Equity 4,861 5,089 5,382 5,756 6,185 6,518 6,983 7,940
Ratios: Current Assets to Current Liabilities (Times) 2.8 1.8 1.8 2.0 2.0 1.9 1.9 1.8
Current Assets less Inventories to Current Liabilities(Times) 2.4 1.5 1.5 1.6 1.7 1.5 1.6 1.5 Debt Equity Ratio 9/91 9/91 10190 15/85 18/82 21/79 23/77 24/76
(4397D/21) - 76-- ANNEX 6 Page 1 of 2
HUNGARY
TRANSPORT (RAILIROAD) PROJECT
Related Documents and Data Available in t'aeProject File
A. General Report and Studies on the Transport Sector
1. Hungary Transport Sector Memorandum (White Cover - preliminary draft) - February 1983. 2. Hungary Statistical Year Books - 1980, 1981, 1982, 1983.
3. Eastern European Transport Regions and Modes - ed(ted by B. Mieczkovski.
4. U.N. - Inland Transport Committee Document, Trans/AClIR9/Amendl, February 16, 1981
5. Hungary 1984 Statistical Data, pp. 16, 25-26.
6. Faccs and Figures about Public Road Transport in Hungary
7. Magyar Allamvasutak - Statisztikai Zsebkonyve - 1983
8. Road Transport and Energy - Syntheses of Studies carried out in Belgium, France, Federal Republic of Germany, Hungary and the Netherlands 1983
9. Energy and Road Transport in Hungary - 1983
10. Mahart
11. Annuare Statistique de la Commission du Danube Pour 1982
12. Uvaterv: "Consulting and Engineering for Communication and Transport"
13. Betonutepito Nallalat
14. A2 1980 Evi Orszagos Keresztmetszeti Forgalomszamlalas Eredmenyei -
B. General Reports and Studies Relating to the Proiect
1. Feasibility Studies on:
a. Ferencvaros Marshalling Yard; b. Track reconstruction and maintenance machinery; -77 - ANNEXAU 6 Page 2 of 2
c. Containerhandling equipment; d. Budapestby-pass; e. Road maintenanceequipment; f. Acquisitionof modernizedtrucks for Hungarocamion;
2. Methodologyfor evaluationof uneconomiclines
3. ProposedAction Plan preparedby MAV
4. The system of 50 HZ railwayelectrification is 50 years old.
C. Design Plans Specifications,Estimate
1. Specifications and design characteristicsfor marshallingyard
2. Specificationsfor track constructionand maintenance machinery
3. Specificationsfor containerhandling equipment
4. Detailed Engineering Plans - M-0 Motorway - First Phase
5. Preliminarytranslations of selectedtechnical specifications which would apply to M-0 Motorwayconstruction
6. Technicalspecification for Hungarocamion'svehicles
D. Financial and Accounting Documentation
1. IncomeAccounts, Cash Flow Statementsand BalanceSheets for years 1981, 1982, 1983 and forecastsfor years 198411989 for HungarianRailways.
2. Income Accounts, Cash Flow Statements and Balance Sheets for Years 1981, 1982, 1983 and Forecasts for Years 1984/1989 for Hungarocamion.
(4397D120) - 78 - TABLE1
HMIGARY
TRANISPORT(RAIL/RIWO) PROJECT
Freight Traffic by Modeof Transport 196083.1' (inMillion ton-km)
Year Railway Road Water Air Pipelines Total
1960 13.346 1,890 3' 1.353 1 97 16.687 (80.0)Y. (11.3) (8.1) (0.0) (0.6) (100.0) 1970 19,821 5,820 2,866 11 1,043 29,561 (67.1) (19.7) (9.7) (0.0) (3.5) (100.0) 1975 23,541 8,731 4,245 12 3,092 39,621 (59.4) (22.1) (10.7) (0.0) (7.8) (100.0) 1976 23,156 9,441 4,445 19 3,595 40,656 (57.0) (23.2) (10.9) (0.0) (8.9) (100.0) 1977 24.181 10.439 6,167 22 3,737 44,546 (54.3) (23.4) (13.8) (0.1) (8.4) (100.0) 1978 24,500 11,42 6,793 27 3,886 46,668 (52.5) (24.6) (14.5) (0.1) (8.3) (100.0) 1979 24,661 11,773 7,013 32 4,291 47,770 (51.6) (24.6) (14.7) (0.1) (9.0) (100.0) 1980 24,399 11,403 7,875 28 4,623 48,328 (50.5) (23.6) (16.3) (0.1) (9.5) (100.0) 1981 24.342 11.759 8,507 25 4.387 49.020 (49.6) (24.0) (17.4) (0.1) (8.9) (100.0). 1982 23,273 11,883 8,201 29 4,473 47,459 (48.6) (24.8) (17.1) (0.1) (9.4) (100.0) 1983 23,079 11.951 8,376 23 4,335 47,763 (48.3) (25.0) (17.5) (0.1) (9.1) (100.0)
AverageDistance (km)
1960 137.4 14.0 246.0 750.0 74.6 69.8 1970 168.2 14.3 286.6 1750.0 113.4 54.3 1975 178.2 17.4 339.6 1728.6 167.1 59.6 1976 175.6 18.1 355.6 2425.0 173.7 59.1 1977 179.4 18.5 485.6 2036.3 191.6 61.0 1978 181.2 19.4 503.2 2076.9 186.8 61.3 1979 183.6 19.5 547.9 2012.5 193.3 61.7 1980 187.4 19.5 645.5 2021.4 208.2 64.6 1981 185.5 19.6 630.1 4/ 182.8 63.9 1982 183.1 20.6 621.3 4/ 173.4 64.3 1983 186.1 21.3 639.4 4/ 170.7 65.9
Tonnage(Millions)
1960 97.1 135.1 5.5 5/ 1.3 239.0 1970 117.8 407.0 10.0 5/ 9.2 54.0 1975 132.1 501.3 12.5 5/ 18.5 664.4 1976 131.9 522.7 12.5 5/ 20.7 687.8 1977 134.8 563.5 12.7 S/ 19.5 730.5 1978 135.2 591.3 13.5 5/ 20.8 760.8 1979 134.3 604.4 12.8 y/ 22.2 773.7 1980 130.2 584.0 12.2 F1 22.2 748.6 1981 131.2 598.3 13.5 S/ 24.0 766.9 1982 127.1 577.9 13.2 5/ 25.8 744.0 1983 124.0 561.8 13.1 5/ 25.4 724.2
I/ Bothfor public andprivate use 2J Figures within perenthesesdenote percentages. 3J Esti"ted. 4/ More than 2000 km. 5/ Le'- than twenty thousandtons. Source: Hungary- Statistical Year Book. 1980-1983. December1984 4397D/29 - 79 - TABLE2
HUNGARY
TRANSPORT(RAIL/ROAD) PROJECT
A. Public Passenger Transport 1960-83
PassengersCarried (Millions) Passenger-Kilometers (Millions) Long Local Long Local Year Distance Traffic Total Distance Traffic Total
1960 725.1 1,560.7 2,285.8 18,128.6 9,404.1 27,532.7 1970 1,003.3 2,142.3 3,145.6 24,029.7 10,043.4 34.073.1 1975 1,107.8 2,384.8 3,492.6 26,935.9 11,374.7 38,310.6 1976 1,127.6 2,429.9 3,557.5 27,197.7 11,646.0 38.843.7 1977 1,146.5 2,498.2 3,644.7 27,987.7 11,922.6 39,910.3 1978 1,165.7 2.546.1 3,711.8 28,583.2 12,145.7 40,728.9 1979 1,183.5 2,608.1 3,791.6 29,055.4 12,451.8 41,507.2 1980 1,187.1 2,656.2 3,843.3 29,361.3 12,648.1 42,009.4 1981 988.3 2,976.9 3,965.2 29,044.2 14,068.7 43,112.9 1982 980.0 3,013.9 3,993.9 28,522.6 14,222.1 42,744.7 1983 914.3 3,065.1 3,979.4 25,727.3 14,425.4 40,152.7
B. Public PassengerTransport by Modeof Transport 1960-83
Passenger-Km(Millions) Year Rail Road& Urban Water Air Total
1960 14,323.8 13,051.1 82.6 75.2 27.532.7 (52.0)_/ (47.4) (0.3) (0.3) (100.0) 1970 16,339.1 17,250.7 59.1 424.2 34.073.1 (48.0) (50.6) (0.2) (1.2) (100.0) 1975 15,823.5 21.854.1 77.4 555.6 38,310.6 (41.3) (57.0) (0.2) (1.5) (100.0) 1976 15,569.9 22,649.4 71.7 552.7 38.843.7 (40.1) (58.3) (0.2) (1.4) (100.0) 1977 15,396.2 23,732.3 75.8 706.0 39,910.3 (38.6) (59.4) (0.2) (1.8) (100.0) 1978 14,928.7 24,907.2 83.2 809.8 40,728.9 (36.7) (61.1) (0.2) (2.0) (100.0) 1979 14,611.7 25,791.1 78.0 1,026.4 41,507.2 (35.2) (62.1) (0.2) (2.5) (100.0) 1980 14,655.8 26.200.9 76.3 1.076.4 42.009.4 (34.9) (62.4) (0.2) (2.5) (100.0) 1981 13,544.6 28.243.7 79.0 1.245.6 43,112.9 (31.4) (65.5) (0.2) (2.9) (100.0) 1982 13,070.5 28,321.1 86.5 1.266.6 42,744.7 (30.5) (66.3) (0.2) (3.0) (100.0) 1983 11,104.5 27,793.1 74.2 1.180.9 40.152.7 (27.7) (69.2) (0.2) (2.9) (100.0)
Y Figures within parentheses denote percentages.
Source: Hungary - Statistical Year Book, 1980-1983. December1984
43970/30 - 80 -
TABLE 3
HUNGARY
TRANSPORT (RAIL/ROAD) PROJECT
Number of Motor Vehicles (at the end of the year - '000)
Trucks, Vans, Dumpers and Passenger Special Purpose Road Motor Year Cars Buses Vehicles Tractors Cycles Total
1960 31.3 4.9 33.0 13.7 236.3 319.2 1970 238.6 9.5 84.7 64.2 610.9 1,007.9 1975 568.3 12.5 104.0 44.3 699.8 1,428.9 1976 640.5 13.4 100.7 39.7 697.1 1,491.4 1977 720.1 15.8 105.9 36.8 694.7 1,573.3 1978 820.1 18.0 112.2 34.0 695.4 1,679.7 1979 933.8 21.3 126.9 26.8 694.9 1,803.7 1980 1,013.4 22.2 140.5 1/ - 676.8 1,852.9 1981 1,105.4 23.4 152.5 1/ - 662.1 1,943.4 1982 1,181.7 24.7 159.7 Ti - 630.1 1,996.2 1983 1,258.5 24.4 173.1 1/ - 422.0 1/ 1,878.0
1/ Preliminary data.
Source: Hungary - Statistical Year Book, 1980-83. December 1984 (4397D/31) - 81 -
TABLE4
HUNGARY
TRANSPOR (RAIL/ROAD) PWOJECT
investment for Different Transport ModesI/
1984 1986-90 3/ 1980 1981 1982 1983 B.E. 1980414 Planned Transport Mode ------(in FT Million)------…-
1. Railways 9,644 7,451 6.672 6,495 5,867 36,129 50.000 (46.1)4/ (36.4) (34.8) (35.2) (35.3) (37.8] (42.6)
2. (a) Highways - National & State Roads 3,247 3,094 2.810 1.853 1.300 12,304 14.000 (15.5) (15.2) (14.7) (10.0) (7.8) (12.9) (11.9)
- Village. Comunity & CountyRoads 1.201 2,314 2.407 2,701 2,646 11.269 15.000 (5.7) (11.3) (12.6) (14.6) (15.9) (11.8) (12.8)
(b) Road Motor Vehicles 4,201 4.182 4,509 4.675 3.700 21,267 26.000 (20.1) (20.6) (23.5) (25.3) (22.3) (22.2) (22.1)
3. River Port & Shipping 526 186 249 196 160 1.317 3,000 (2.5) (0.9) (1.2) (1.1) (1.0) (1.4) (2.5)
4. Aviation (a) Aircraft 84 501 347 321 300 1.553 ) (0.4) (2.4) (1.8) (1.7) (1.8) (1.6) ) ) 5,000 4b) Airports 1.181 1,211 849 1,356 1,735 6.332 ) (4.2) (5.6) (5.9) (4.4) (7.4) (10.4) (6.6) )
5. Pipelines 836 1.507 1,329 850 910 5,432 4,500 (4.1) (7.3) (7.0) (4.7) (5.5) (5.7) (3.9)
TOTAL(Excluding Urban Transport) 20,920 20,446 19,172 18,447 16,618 95,603 117,500 (100.0) (100.0) (100.0) (100.0) (100.0) (100.0) (100.0)
1/ At current prices. 2/ B.E. indicates Budget Estimates. 3/ Figures rounded off. 4/ Figures within parantheses indicate percentage. Source; NPO,NOT, MAY and Mission. January 1985 4397D -u~~ ~~ ~~ ~ ~ ~ ~-
am~~~~~~ cat SUST "saul! kqf Cw V
matte Istist 9)5 3_ S4.4
4 _~~~~~~~~~~~~~~e , I,Ttl.--Tet. Yrm___ isisiq Cetmmmlea j, ..-- Ir.rt..---1... t_. _ __ V T __ m-lullul___ Yss 111-9r1t_1 1
ttA CrueTtlis M. Lies It. *3D VSAe VI.5 311w 36A. t.ui.i =A MA.1 in.? 1. 41tD a.sz5 (3J.3 goal3 13 3n.48 a. L lIIeV _ 4 7t it. 438.1, 11. 43. Li1a MC 4n; .1 Ca WA. imA t.TJ (1.33 13.11 STJ4 .sS 2.5 (It1.196 US43Se 249J 26.4 M4.9 DLI. U1A 3.65? MAl MIA UIAs a.7 1138 1.3.4 Ju.4 SEal 33.33 s.c4 *.e Tr 6 Ittflt UI Wien Iten h. I.O.9. 1.1n.5 1,.54.S i1.1 .3A1. 91.11.7 *.1t.1J E,I'S 1.N3 *.Ui2 1.113I 11i95.1 (33.3 101.8 5.3 AL.M L Vi1eo4 361. 3.1.9 313.9 30.1 45. It.U6. MA IS* NiT 44M.? MA 2.4.J (4.1 13.4 16 l. 44.1U #a inln IfIj -d $S I1 _ 3 7m1I.4 31.6 70 13.1 * IJ 36.5 332 AA nJ *J ID* 4 IJ (0.32 8J3 1913 9.4 ( In_tt"l n.es_T.rcmt - 2.A4 a1.? 27.9 ME Ii.? 46. UA 3918 33.J 3) n tS VIA (1313 3.l J 11.38 JS a SieacgSmte w. llt. mweliq T . Jma -m. sO., 9s1 75.1 A.2 . 438 s1.3 OAs yJ.j 15A 3.UNA1 (6.31 46V 1.3! 41.aT I.e - imctb," stotlen . p. MA.1 w T T5423. 2 1JJ.O 3wj WJ. a MA 1.1? 1mU4.5mi 4.9402 (1.13 61.D Nis2 419.6 eA s1Wnitg 3a 4eJ ma 41. WAT 2. 1T.7. M A 1511.4 INA mA MA IAMJ tS 113 t3.4 n.u "A0
11.s m.tin .1'"m . 1613J 136. 146. I.1l 115J 25S. I2.5iT.J 1111maJ ts MIA IRAU 6.71 II.J8 MAO 3. c.IF"n tAI - 323.3I tii.5 .15."1.tl 5.1W4. 111.6 3.8AJ *,2163D t4A I3i *J 1 J 1.J43J.41 W.l 11.11 31.1
isaat (43 . m.m.t sI.u 1_J 1.10 S.' 0 6.l.T 3J15.1 &J3A 1ABA.0 41.21 1.3311Y4 6.441 33.51.6 (614.43llT3 1. 1 5.11r WAS
13.8 IthIL.les&e t3~ el S l j 6.1 781 5.5 lT.I3. U4J -. 3.51 ;.~ was .IIIJ us I ".m 14.I l-t,c m tO 1.3. l.1. ta ma 5 * 31I.3 tl*.2 3 . 4 .4 CIA 31I _ * 15.2 (I.I 4.D I.3 11.48 MA5 [.530 iS 36.3 . . 1 A me.: 31. . 15.8 1. ((:,Al 1.3 15 .1 1 5,1 1bm.149 498 329)S" A24J - . 661.a ItS . C 3.0 * 51.1f (,.?I 0.41- IF.Es 3.3 st.eut (11 . : 1,44.t 335.2 1.11Z. 2.33.3 i.11.5 653.19 lw TJ 1Js,, TI4R4 IJ.IZ 3tIi.U 1.30.5 I153 *sa In." 1111.16
C. INN1 FACILITIS
IDa i,t ni,,, , 25.1 267.1 139.9 U.N 1713 G"13 MA s gm 3I6.3 1.D 11.1 (313 0.66 33.0 .1.3 3|.0 Track 6110 c 4 - 1*4.0 3..? i1JS 373. a6i 1s 61.I 1C 4J 324.4 14J 83.J (Iii 131 * 4I. i2 07.1 111ID U4 Ra96 M.1 M.* #333 t 12 3912 A3A CIA 11.) 3123. MA l.. (2.63.0) 24.48Z1.J1/T,
26.0 T a_l1b1i3.i11MAICI3. 51* 5 18. 37.4 6 27. .3 1.211.0 MA a.2 a a-isi.i 3111 AA Ql 23.39 62 3.s1 Sana (C) . 14.1 1514.6 678. 191.1 O4.3 3A9.5 ]1SiA 713.3 ODA1 *.M1.3 3.3233 4Av1.9 (8.93 "6.1 211A3 saw5 5. 3463
21.0 aCie_ r 4911.9 94036*t . 6. 3.3 34. 113.3 1312. en7.0 MA I62J 1S9. 33. Hs4i 813.3 I38 1.1CR _1Ma 9t3C6ttIiUluu . 31.3 U.3 1542 1465 411.31 3.15. .*5 413.1 ml. 11 1 334*e.6 3I@18. 41.3 9.7r 3.488.31 81.33up... 34618.520 143.3 33.1 3531 J 9333 ILJ1_3n 3.tT5.7 Tls 4 81. 3.4. l 33.3*118. 4J1.3 193 5.37 3956 UIJ
5am Tr I. 74.470. i.ul.u- 4 8.41.? 9416. el2.1E a.m. *Tt 1.. ¶1.8l, 321t. 3S.,IW 335053 49.33 421.33
U Fries at a.9 el aC , ae1_ n,) * Ie_ 49.53 * "* "t r 21Venil canbgwcis me pe taFr ai its1 51" 1h.stnts nti a.1
cs_r I_6 - 83 - TABLE 6
HUGARY
TRANSPORT(RAIL/ROAD) PROJECT
Railway Component
List of Possibly Uneconomic Lines
No. Line Length
1. Kiskoros-Kecskemet Also 53.0 2. Kiskunmajsa-Torokfai 44.0 3. Szentlorinc-Sellye 24.0 4. Kozeprigoc-Sellye-Harkany 68.0 5. Lepseny-Dombovar 82.0 6. Tamasi-Keszohidegkut-Gyonok 13.0 7. Balaton Fenyves-Taska, Somugyszentpal-Csiszta 43.0 8. Szob-Kiralyret 8.0 9. Kisszenas-Kondoros 6.0 10. Murony-Bekes 8.0 1i. Veszto-Korosnagyharsany 32.0 12. Debrecen-Sarand-Nagykereki 52.0 1.3* Sarand-Letavertes 20.0 14. Nagykallo-Nyiradony 23.0 15. Nyiregyhaza-Dombrad,Herminatanya-Balsai Tisza-Part 67.0 16. Kocsord-Csenger 26.0 17. Zajta-Koscord (partially) 25.0 18. Redicz-Csomoder 5.0 19. Boba-Veszprem (branch line) 4.0
TOTAL 603.0
NOTE: During the last decade MAV has closed about 1,400 km of uneconomic lines. A study of further 600 km of low density lines indicated above has already been completed and a timetable of actions to be taken during the 1986-1990 period will be firmed up by MAV with the Government before the end of 1986..
Source: )AV December 1984 (4397D/33) - 84 -
TABLE 7 HUNA_
TRANSPORT(RAILIROAD) PROJECT
Railway Compnant
Selected Operating Statistics far Hunaariu Ra1ilwys (1978-831
Unit 1978 1979 1980 1981 1982 1983
1. LENGTHOF LINE. TOTAL km 7,733.7 7,738.2 7,613.5 7,617.0 7.511.1 7,612.2
Stanard gauge km 7.468.0 7.472.4 7,402.8 7,406.3 7.400.4 7.401.5 NHrow gauge km 230.7 230.8 175.7 175.7 175.7 175.7 Broad gange k 35.0 35.0 35.0 35.0 35.0 35.0
it. TRFFIC
Passenger-km mfl 13.751 13.469 13.550 13.389 12.913 10.981 Net tan-tm mil 24.187 24.331 24.041 23.951 22,927 22,277 Passenger grass-ton k. m11 18.334 18.155 18.459 17.780 18,391 17.813 Freight gross-ton km ml] 50.874 50.523 50,381 51.394 49,702 48,137 Total gross-ton km m11 69,208 68.678 68.840 69.514 68.093 65,950 Total gross ton km per km mil gt/km 8.95 8.87 9.04 9.13 8.95 8.66 of line
Ill. LROSSTON-KM BY TYPE OF TRACTION
Electric - Quantity mil 33.857 33.946 35.259 36.754 37.766 37.651 - S af total t 48.9 49.4 51.2 53.1 55.5 57.1 Diesel - Quantity m11 28.810 29,354 29.218 29.421 27.147 25.780 - % of total S 41.7 42.8 42.5 41.1 39.8 39.0 Steam - Quantity mil 4.916 3.725 2.408 1.876 1.149 612 - t of total S 7.1 5.4 3.5 2.7 1.7 1.0 Self-propelled - Quantity m11 1.625 1,675 1,96S 2.123 2.031 1.907 - I of tatal S 2.3 2.4 2.8 3.1 3.0 2.9
IV. UTILIZATIONOF TRACTIONAND ROLLING STOCK
Average daily performance of available engine
A. Passenger traffic Electric locomotives kmtday 462 470 495 462 475 480 Diesel locomotives * 345 332 322 307 321 332 Stem locowtives * 206 201 185 187 190 173 Diesel motor trains * 293 293 292 286 376 368 Coaches - - 339 - - 351
B. Freight traffic Electric locomotives knmday 319 318 324 304 345 353 Diesel locomotives * 229 229 222 218 221 219 Stem locomotives * 129 136 135 82.6 104 100 Freightwagons - - 85 - - 73
C. Availability S Electric locomotives *.O/ - 84.1 - - 81.8 Diesel locoatives * 81.71' - 79.2 - 76.6 Coaches 91.51/ - 91.8 - - 90.4 Freightwans * 94,71 - 94.2 - - 92.7 Averge speed of passenger trains klmlh 38.5-j - 41.2 - - 42.9 Averep loading of freight trains tons 1,1011/ - 1.171 - - 1.190 Average load per loaded t freight wagon 26.5 27.8 28.3 27.8 27.9 28.5 Turnaround time of days freight wgon 3.65 3.7n 3.89 3.94 4.26 4.35
V. STAFF
Emloyees no. 141.719 139.243 136,247 134,493 132.255 132.229 Eaploymes per kmof ine no./km 18.32 17.99 17.89 17.65 17.37 17.37 Trafic units per enployee tus:n! 273.30 272.90 281.90 285.50 276.10 259.70
I/ 1975 data 21 Tus-NTKNP Source: Statistic books of the PV 1980-1983. Deaobr 1984 - 85 - TABLE8
HUNGARY
TRANSPORT(RAIL/ROAD) PROJECT
Railway Component
Comparisonwith Selected EuropeanRailways
Unit Turkey Yugoslavia Italy C. Britain Greece Austria Hungary
1. Total line length km 8,193 9,393 16,157 17,538 2,461 5.811 7,611
la. Length of electrified lines km 204 3,320 8.572 3,724 - 2,982 1,604 (X) (2.5) (35.3) (54.2) (21.2) (0) (51.3) (21.1)
2. Length of line per kmolOU.0OO 18.1 42.4 34.7 32.1 25.8 86.3 71.1 inhabitants inhabitants
3. Passenger-km mill. 6,010.9 10.594.0 39.938.4 31,704.0 1,932.7 8,693.2 12.913.0
4. Pass.-km per km of line '000 734 1,119 2.475 1.792 785 1.479 1.696
5. Net ton km mill. 4,971 25,018 18.384 17,640 814 11.002 22.927
6. Net ton km per km of '000 607 2,643 1.140 997 308 1.883 3.011 line
7. Staff number 44,617 112,748 215.905 212,348 11,897 69,346 132,255
8. Traffic units per '000 246 316 270 232 231 283 276 employee
9. No. of staff per km No. 5.5 11.9 13.4 12.0 4.8 11.9 17.4 of line staff/km
1U. Traffic density per millgross 2.10 7.00 7.24 8.85 4.56 6.67 8.95 km of line tons/km
NOTE: lY81 data for Turkey, Yugoslavia, Italy, Great Britain, Greece and Austria. 1982 data for Hungary.
Source: UIC and rAV Statistics December1984 (43970/34) - 86 -
TABLE 9 -t
TIU5PORT(RA ULROA) PROJECT
Raillay CoVonent
Goods Transported in Containers by MVA.1970-83 1/ (in '000 tons)
TYpe of Klnd of Container Traffic 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983
L Export 1.5 3.1 4.7 4.8 6.5 8.9 12.6 11.8 15.4 12.7 12.8 12.6 11.3 12.1 A Import 9.0 12.2 1B.1 19.8 18.4 20.1 30.8 27.2 26.3 25.3 22.5 24.6 25.9 24.1 R Transit 0.3 0.8 1.0 1.6 2.9 3.2 4.1 5.2 3.7 4.4 3.1 1.5 1.9 1.9 E Inland 13.4 34.8 58.1 108.5 156.8 206.8 283.7 412.0 450.8 520.7 558.8 590.4 583.3 605.2 E Subtotal 24.2 50.9 81.9 134.7 184.6 239.0 331.1 456.2 496.2 563.1 597.2 629.1 622.4 645.3
M Export 9.8 16.4 17.3 24.4 31.4 44.1 68.3 97.3 89.8 132.0 172.8 272.6 334.6 512.1 E lport 1.3 5.1 17.8 18.5 37.7 33.0 39.5 54.5 69.5 105.5 145.3 303.2 368.4 537.9 D Transit 2.0 4.2 17.6 35.8 74.6 86.3 95.0 99.1 210.4 130.1 156.8 136.5 137.1 163.4 I Inland - 1.8 6.1 11.0 16.8 25.4 35.7 54.3 80.2 115.S 135.5 180.6 160.9 199.7 U-_ N SiSbtotal 13.1 27.5 56.8 89.7 160.5 188.8 238.5 305.2 449.9 483.1 610.4 892.9 1001.0 1413.1
In Total 37.3 78.4 138.7 224.4 345.1 427.8 569.7 761.4 946.3 1046.2 1207.6 1522.0 1623.4 2056.4
1/ Excluding smell containers of 5 tons or less.
Source: K%V Oeceuber1984 - 87 - TABLE10
HUNGARY
TRANSPORT(RAIL/ROAD) PROJECT
Railway Component
Railways Staff and Productivity
Total Traffic TUs per EMployee Traffic Units (TUs) 1/ V/ Numberof Operation Traffic Year Chargeable operational Ratio (3:2) Employees Staff Total Operation ----- million------__-__------thousand…------
1978 37,938 38,725 1.02 141,719 108.579 27..3 356.2
1979 37,800 37,996 1.01 139,243 107,115 272.9 354.8
1980 37,591 38.394 1.02 136,247 104,963 281.9 366.0
1981 37,340 38,394 1.03 134,493 103,677 285.5 370.2
1982 35,840 36,533 1.02 132,255 102,184 276.1 357.5
1983 33,758 34,334 1.02 132,229 102,341 259.7 335.7
1984 33.529 34,200 1.02 132,302 102,150 258.5 334.8
1985g2t 34,087 34.769 1.02 132,600 102.100 262.2 340.5
1986d/ 34,656 35,350 1.02 132,400 101,950 267.0 346.7
1987 35.23, 35,940 1.02 132.200 101,800 271.9 353.0
1988 35.824 36,540 1.02 132.000 101.650 276.8 359.5
1989 36,424 37,152 1.02 131,800 101.500 281.9 366.0
1990 37,035 37,776 1.02 131,600 101.350 287.0 372.7
1/ Traffic Units (TUs) are the sum of net metric ton-kms (Ntkm) and passenger-kms (pkm). Ntku chargeable are based on the tariff (shortest) distance between origin and destination. Ntkm operational may be greater because sometraffic is routed circuitously to avoid saturated lines or to utilize better facilities. 21 Estimate 31 Five-year figures for 1986-1990 HAV's proposed Action Plan.
Source: Statistical Pocketbooks of the MAV 1980, 1983 - Hungarian Railways and Action Plan. December1984 (4397D/37) - 88 -
TABLE 11
HUNGARY
TRANSPORT(RAIL/ROAD) PROJECT
Maximum Acceptable Traffic Volumes (Passenger car unit.-I per hour)
Road Type Rural Sections Urban Sections
Motorways
Two Lanes: two-way traffic 1400 1800 Two Lanes. one-way traffic 2800 3600 Three Lanes: one-way traffic 4000 5400 Four Lanes: one-way traffic 5200 7000
Other Main Roads
Two Lanes for two-way traffic 900-1200 1200-1500 Two lanes for one-way traffic 1800-2400 2100-2800 Three lanes ror one-way traffic - 3000-4000
_, Light vehicles are one passenger car unit, heavy vehicles are calculated as 2.5 passenger car units.
Source: Roads of Hungary; issued by Public Roads Department, 1974.
(4397D/38) - 89 -
TABLE 12
HUNGARY
TRANSPORT(RAIL/ROAD) PROJECT
Principal Highway Design Standards
Design Lane Minimum Maximum Road Type Terrain Speed Width Horiz.Radius Grade (kmJhrE (m) (ml
F 150 1400 3
Motorways R 120 3.75 750 4
M 100 500 4.5
BR 80 300 5
F 120-100 750-500 4.0-4.5
Hain Trunk Roads R 100-80 3.5-3.0 500-300 4.5-5.0
M 80-60 300-150 5.0-6.0
BR 60-50 150-100 6.0-7.0
F 100-60 500-150 4.5-6.0
Secondary Roads R 80-50 3.5-3.0 300-100 5.0-7.0
M 60-40 150-60 6.0-8.0
BR 50-30 100-30 7.0-10.0
Legend: F = Flat * = Rolling M = 1lountainous BR= Broken or Residential Areas
Source: Roads of Hungary: issued by Public Roads Department (1979).
December 1984 (4397D/39) - 90 -
TABLE 13
RUNGARY
TRANSPORT (RAIL/ROAD) PROJECT
Road Network Statistics (1980)
National Road Network
Av, ragel/ Road Categories Length (km) Paved Width (m)
Motorways 130 17.15 Half Motorways 79 8.48 Main Trunk Roads 1,925 7.79 Main Roads 4,438 6.82 Secondary Roads 23,160 5.54
Total National Roads 29,732 5.95
Local Public Roads
_oad Type Length (kmi) Z Paved
Budapest Streets 3,650 72 Town Streets 9,460 55 Village Streets 24,700 34 Rural Roads 20,120 6
Total Local Public Roads 57,930 30
Agricultural and Forestry Roads
Road Type Length (km) X Paved
State Farm and Agricultrual Cooperative Roads 46,669 28 Forestry Roads 3,908 50
Total 50,577 30
1/ 96Z of National Roads are paved.
Source: Facts and figures about public road transport in Hungary.
December 1984 (4397D/40) - 91 -
TABLE 14
HUNGARY
TRANSPORT(RAIL/ROAD) PROJECT
Axle Overload Fee Scale
Single Axle Dual Axles Axle Weight Fee AxlWight Fee (Tons) (Ft/km) Tons (Ft/kin)
10.0 0 16 0
10.1 - 10.5 20 16.1 - 17.0 25
10.51 - 11.0 25 17.1 - 18.0 35
11.01 - 11.5 35 18.1 - 19.0 45
11.51 - 12.0 50 19.1 - 20.0 55
12.01 - 12.5 70 20.1 - 21.0 70
12.51 - 13.0 95 21.1 - 22.0 90
13.01 - 13.5 125 22.1 - 23.0 120
13.51 - 14.0 160 23.1 - 24.0 160
24.1 - 25.0 200
25.1 - 26.0 250
Source: Article from the Information Center of Public Roads Department.
December 1984
C4397D/41) - 92 -
IussY TABLE 15
TWRUSPORT(ROWRAIL) PROJECT
Past and Projected Road Expenditwres (Millien Hungarian Forints - Crvmt)
Totals; Vi Totals: VI Vt. Five-Year Plan Period 5-Yewr PUB Vll. Five-Year Plan Period 5-Year pile' Description 1980 191 1W2 1963 184 1965 1981-1965 1986 1967 1988 1989 1996 1986-1990
National Highways RoadCEnstruction or lmro nt 3.070 2.92 230 2,010 1.320 1,580 10,230 2,09 2,240 2.420 3.eo 3.s7a 14.1ZO, - tontayt - now construction 1.210 1,150 870 710 636 970 4.336 1.650 1,530 1.600 1.800 1.220 7.e00 - Oter Roads: ie8DD 10 1..330 6a. 610 5.89_ 44U_0 ;10 o _3 6.2 -neu cnstruction 200 220 M8c 200 19 10 629 5 40 U4 50 60 200 - 1erizaltion (hettereuts) 1.600 1.550 1.320 1.130 665 00 5.265 435 670 775 1.950 2,290 6.120
PFaemt Reinforcement 2.5S 2z48e 2.7 2.6SD 2.OW 2.300 12.210 2.300 2.SOO 2.5D0 2.75D 2.950 13,.DO
RoadMaintenance 1.911 2,95 2,126 2.237 2.600 2.965 12.023 3.11S 3.270 3.435 3.60 3.785 17.210 - operations 1.911 2,095 2,216 2.Z37 2.600 2,860 2Rt5 3,D30 3.175 3,325 3p475 15.930 - equipment. plmt 8c Installations n.a n.a n.a n.e n.a 105 n. 190 240 260 28D 310 1,280
Natlonal Road Total 7.531 7.495 7,246 6.957 5.920 6.845 34.463 7.505 8.010 8.355 10.155 10.305 44.330
Local Roads - Constructionfl.qroven.ts 1.291 2.314 2.407 2.701 2.616 2.6D0 12.66B 2.730 2.865 3.010 3.160 3,320 lSJOt21 - modernization (bettermnts) 2.100 1.629 1,788 1,638 1.484 1,500 8.039 1,605 1,720 1.835 1.965 2.105 9 .230! - Road Mintence l.O 1,222 1.227 1,394 1.367 1.400 6.610 150 1.600 1.715 1.835 1,965 8 615!2
Local RoadsTotal 4.591 5.165 5.422 5.733 5.497 5.500 27.317 5,835 6,185 6.560 6.960 7.390 32.930
Grand Total 12.122 12.660 12.6 12.690 11.417 12.345 61.780 13.440 14,195 14.915 17.115 17.695 77.260
1/ ADunts shownfor VII five-year plan period ar not yet finally approved. 21 Planned budget for local road projected on HPW8MTestimate of 5%-1Otamual Increase over present levels.
Source: WO, NRT and Hission.
February 1965 - 93 -
maim? TABLE 16
TRAiT COWUiIL) 1603Cr
mtinal Roid 1awetsut Pln (1360-1930) - by aior Mork Ceteris (Budget Aouets m Mlli1em of Hag1rim ForV ts (PeF) - Cmr.mt)
1IS 1217 nu 1I0 Toatals 1im6-1M inpected stat expeted 4int eW ted _t cted sut expected smet expected ant ecriptimi comletion 8WF} c ,lation (Mlff c tlatim c leSe Pew copetion (1HUF) c letion (NW
ytoreyConstructien 10 km 109 - 60 22.5 km 460 3.s ta seo - - 65 km 2 790 11- 10 k- 6F0 - 1U - _ _ _ _ - 10 km W0 -S - 430 - 46 22.5 km 460 32.5 km SO - 55 km 1986
OtheroaR_Rks 9 kW2 or 250 3k 80 ------l2 k2 r 330 - neb ases - 4 km 40 ------4 km 40 - mabridges 2 Bridge 70 - 2Br 70 - murniztion bettermnt) 5 km IC 3 km a - - _ _ _ 8a km acD iwestun tor1 haietnae e/m 40 - - - _ _ _ _ _ na 40 - mstallatlens i.e 40 - - - _ - - - - R_/ 40
Sn-total oqgfle projects 19 kWE Er 1,3E 3 km 720 22.5 km 460 32.5 km seo - - 77 W2 Br 3.10
1 Prjects
Htrayt0 Construction 560 - 89 - 140 - 1.200 14 km 1.220 14 km s,0o
Oiier Ronadks 252 km 1B0 61 kmI Sr 630 263 k2 Br 20 30Wke3 Er 0 300 t3 Br 2350 1376 ke/l Er 5.930 - laroods Zkm 5 akm 40 So5 5Bkm 50 S tkm 60 30 km 2a0 - fewbypasses - - 200 6km 2 - 20 - 40 6km Soo - n. bridge - 0 2 Bridges 2ao 2 Brdgs 380 3 Bridgs 910 3 Bridges 1.200 10 Bridges 2.710 - medrnizgtlon (Chttermtss - 85 3 km 110 2 km 75 IS km 330 20 km 940 40 km 2.160 - wlddiag 250km O0 2D0km 80 250km 80 28 km 90 Z70km 0 1300 km 420
Purnt gelf re WOkmkt 2.300 750 km 2.500 750 km 2.s SSD0 km 2.750 550-km 2.94 100 km 13.000
menst_ets for maintenaece a/a 1S0 n/a 200 nla 260 rna 280 n/a 310 nle 1.240 - Mu1tamnce aquwipst a 10 n/ 150 Va l SO Va 170 Va 170 rn/a 760 - PlI nt 'V. 30 nl_ 70 nV 8O n/a 90 Vfa 100 rNI 370 - Installations V/a 20 n/a 20 nla 20 Va 20 Wa 30 l/a 110
Sub-total en projects 9 km 3.200 1011 kq'2 Br 4.260 1.013 km 4.72 1150 kt/3 Br 6.230 1264 %3 lBr 6.630 53SMkmiO Or 25.240
Pi:siaal Road Invest_nt Total 971 kWZ Er 4.511 101 kWa2Br 49110 1035 tl2 Er S ISO 1183 kt/3 Er 6.630 1264 W1 Er 6.830 567 km/ID Er 28.400
t ftick: 1atorweyCoestrectioa 1.650 1.530 1 .40 1.EOO 1.220 7.800 Other Roadwks 440 710 E2D 2.00 2.350 6.320 Paveet Reiefercint 2.300 2.500 2.5s0 2.750 2.950 13.0OW Iowest_nts for NaifteanrCe 19 240 26D Z2O 310 1.280
50wm: Ministry d Trasport Oecfler 198 - 94 -
TABLE 17
HUNGARY
TRANSPORT(RAIL/ROAD) PROJECT
Vehicle Fleet of Hungarocamion
Refrigerator Specialized Other Years Vehicles Vehicles Vehicles Total
1970 153 31 239 423
1975 278 91 435 804
1980 330 118 799 1,247
1981 329 123 890 1,342
1982 311 126 969 1,406
1983 328 154 987 1,469
1984 (June 30) 315 153 1,093 1,561
Source; Hungarocamion December 1984
(4397D/42) - 95 -
TABLE 18
HUNGARY
TRANSPORT (RAIL/ROAD) PROJECT
Hungarocamion
Main Types in the Truck Fleet
1/ Years Raba--Man Mercedes Volvo Renault Others Total
1970 28 86 154 155 423
1975 345 48 298 113 804
1980 676 312 221 -- 38 1,247
1981 732 426 153 31 1,342
1982 738 498 130 -- 40 1,406
1983 715 562 130 7 55 1,469
1984 (June 30) 756 600 129 20 56 1,561
1/ - in 1970 Skoda was the most significant type (102 units) from the "other" trucks.
- in 1975 it was Scania (82 units).
Source: Hungarocamion December 1984
(4397iD/43) - 96 -
TABLE 19
HUNGARY
TRANSPORT (RAIL/ROAD) PROJECT
Hungarocamion
Average Annual Utilization of Vehicles
(in 1,000 km/unit) Refrigerator Specialized Normal tilt Years Vehicles Vehicles Vehicles Total
1975 66.7 38.8 82.6 72.2
1980 67.5 72.6 74.5 72.5
1981 70.1 80.5 73.3 73.2
1982 79.7 97.4 78.9 80.7
1983 80.4 84.0 83.4 82.8
Source: Rungarocamion December 1984
(4397D/44) - 97 -
TABLE20
HUNGARY
TRANSPORT(RAIL/ROAD) PROJECT
Hungarocamion
SelectedOperational Statistics of Vehicles
Quantity Naming Units 1975 1980 1981 1982 1983
1. Averageannual utilization 1,000kmf unit 72.2 72.5 73.2 80.7 82.8
2. No. of accidentsper millionkm -- 1.62 0.01 0.02 0.02 0.10
3. Totalton-km performance milliont/km 668.8 1.013.21.076.6 1,214.7 1,396.4
Fromthat; - refrigerated 212.4 255.6 267.5 277.8 320.4 - specialized 36.5 67.5 83.8 103.1 112.7 - normaltilt 419.9 690.1 725.3 833.8 963.3
4. Staffproductivity 1.000t kn/ person 188.8 251.2 275.4 274.9 314.8
5. Averagetransport distance km 1.684 1,396 1,548 1.490 1,458
6. Averagetime needed for com- pletingthe averagetransport distance days 5.7 4.8 5.2 4.6 4.5
Source:Hungarocamion December1984
(4397D/45) - 98
TABLE21
HUNGARY
TRANSPORT(RAIL/ROAD) PROJECT
Hungarocamion
Actual and Planned Investxents
1980-85 -/ 1986-90 (Draft Plan) Replacement Development Total Replacement Development Total No. of Costs No. of Costs No. of Costs No. of Costs No. of Costs No. of Costs pieces ic pieces SD pieces $m pieces .. pieces $n pieces Sm (approx) (approx) (approx) (approx) (approx) (approx)
Vehicles 700 62.5 430 30.5 1,130 93.0 750 41.0 550 38.5 1,300 79.5 of which;
Refrigerated 274 22.2 89 6.5 363 28.7 - - 190 16.2 190 16.2
Specialized 49 4.5 16 1.3 65 5.8 - - 85 6.6 85 6.6
Normal Tilted 377 35.8 325 22.7 702 58.5 750 41.0 275 15.7 1,025 56.7
Equipment - 5.5 - 4.4 - 9.9 - 2.9 - 0.9 - 3.8
Others - 3.5 - 15.3 - 18.8 - 15.0 - 0.4 - 15.4
Subtotal 71.5 50.2 121.7 58.9 39.8 98.7
1/ 1980-84 actuals; 1985 estimates.
Source; lungarocamion December 1984
(4397D146) - 99 - TABLE22
HUNGARY
TRANSPORT(RAIL/ROAD) PROJECT
Railway Component
ProcurementPlan for RailwayItems Eligible for Loan Financing
LOAUALLOC. FT US$ DISBURSEMENT ITEM UNIT 1985 1986 1987 1988 TOTAL MIL. MIL. %
I. FarencvarosEast MarshallingYard Elements 1.1 Brakingequipment 1 - 5,600 5,600 4,300 15,500 222.3 4.78 100.0
II. TrackConstruction and MaintenanceMachines Pcs 360.4 7.75 100.0 2.1 BallastCleaning machines U - 2 1 1 4 2.2 Tamping.Leveling machinesfor switches - 3 1 1 5 2.3 Tamping,Leveling machinesfor tracks - - 1 2 2.4 Sleeperschanging machines 1 I- - 2 2.5 Ballastprofiling machines(regulator) - - 1 2 2.6 Switch exchanger * 1 1 - - 2 2.7 Smallmachinerxy- V - - - - -
III.ContainerHandling Machines Pcs 175.8 3.78 100.0 3.1 FrontLoading Truck - 3 2 1 6 3.2 Side LoadingTruck - l - 1 2 3.3 SelfLoading saddle tractorwith trailer * 2 2 2 2 8 3.4 MobileTelescope crane for containerhandling - 1 - 1 2 3.5 ContainerGrip - I - 1 2
IV. TrainingProgram - - - - - 10.2 0.22 100.0
SubtotalRailways - Excludingcontingencies 768.7 16.53 Physicalcontingencies 21.9 0.47 Pricecontingencies 186.0 4.00 TotalRailways 976.6 21.00 100.0
1/ Includesabout 200 pcsof smallmachinery such as: railcutters, haydraulicrail tightening machines, track lifting machines. hydraulic jointbending machines; rail grinding mach.. power wrenches and high frequencytool settes;
Source:MAV December1984 - 200-
~3aL * TAIFUT lsaIlu11M PiGlT
Taui lit. Teal1 Cit. Teal1 ist. Tsutu ait. Total It&. latil 1st. Pr4GPM Aw bat Prismw ANW cat Prinu UNa- coat Prq"no Am. last Inoputs Us. Cat ha. coat Cont aM Mn ora u S Rs isr -am us' istmiea f NusCoer a n us a us A. fPlftlf
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5. Ama'Sew tit..iq t atlas - I 2.3 - . . I 3.3 1. Ctc iystemsfor l I%# wiuewaitw - .3 - - I 3.3 U.Trflasqintem.5ral "tliaLsic gaslia bU Itrt assitinb. . . - FM OA - U N GA 4 13. a. bt.4U1gorslpt af naI Iwo am eaing tuta.------. . - V BA UA
sEa - - - 3. M 12.2 a Ila it
Paatdbpiqaitgn * U a I . I 2 - - 4 W
2.lim"t basialalt ThinalirrIq - . FM I 3.3 a I Ij. . . . OA LIlkl ttliuit a IdiShlia
Urtciurlsfau his Cap- motptle. F * LGA S I Si on 1 24 . 4 1. a. biasM as Tiaulaa
b.ualrdffitluost, A I 32 FU I .21 Iii a LB . 4 Da 5. prop"t h aicitia Implemeitatianlawp"lais" OM 9SaaC dsiIfaleim,M FI I 939 P 4 .13 IL a 112 514 4 12.1 - . - I
Practce aK 4 832 A a GA PU5 4 I3 - . U 2.
CanStrwitia FM I 3. E 4 Di. aL 4 IJ . - . . . . 5 - - - P ~ ~~~~413. A I .3 S.RCsul ting lagiuin Activities FOG 4 832 am 4 12 - - . -. . . . i La 343 upl I GA cm GA
enSUe urn a eo~~~~~4.Ca 2 9., A S GA UK OA . . - 7
I. CAstiliNs INCie)
liiwiitimaiivsatlug iSe-e - 3J - OADA - - I
2. Iiwts sssO a
3rT-r-eeilfa al- s - - IA - - 4 .. -- I
4. Tecablea t*ints Meet, M
to-du Ilat a 1 ta: a i a
-- Fawvipav laism"j Lei.S, . mfSaim.
SWISS Mr fti1l "B - 101 -
TADLE24
HUN&AR
TRANSPORT(AW RAIL) PROJECT
M.0 Motorway - PrincipalCharacteristics
Cross-sections N-S to Rte 50 Rte 50 to M-7 ri7 to M-l
Phase I (included In the project) and Phase I1 (1991-1995) Lanes 243.50m 4x3.50m 2x3.50m Platform Width 13.00m 18.00. 13.00. Paved Width 1.OOm 15.00. 11.00. Paved Shoulders 2x2.0Om none)! 2x2.OOm
Eventual Full Motorway (future) Lanes 4x3.50m 6x3.50 4x3.50 Platform Width 18.0Um 36.00. 28.00. Paved Width 15.00n lxl5.00m; 1x14.50m 2xxl.0Om Paved Shoulders none 2x3.0m 23.00m
Exit Rap Width - (l-lane) Platform Width 8.00m. Paved Width 5.50r. - (2-lane) Platform Width IU.00.m,Paved Width 7.00W.
River Bridges over DanubeRiver - 950m (main spans 500 meters) Soroksar1 Channel - 504m (mainspans 150 meters)
Superstructure (Phase l)Y/ Cross section: 4 lanes x 3.50D; median width 0.50m; Curb to curb width 17.50. Type - mainspans; 3-cell. continuous, post-tensioned, reinforced concrete. - approach span; 2 cell, continuous, post-tensioned, reinforced concrete.
Substructure: Concrete piers with stone-block facing on cast-in-place pile foundation.
Grade Sepwations. Motorwa over railroad Secondary roads or secondary roads over motorway
Cross section 4 lanes x 3.50. 2 lanes x 3.25m Curb to curb width 17.50S5L/ 6.50m Superstructure; Prestresssed reinforced concrete beams, cast In place deck. Sustructure. Reinforced concrete abutment and piers on pile foundations.
Principal Construction Quantities
Earthworks 2,400,000 cubic meters Stabilized base 70,000 cubic meters ASphalt base 34,000 tons Asphalt binder 46,000 tons Asphalt surfacing 32,000 tons River Bridges 27,150 square meters Grade Separation Structures 26.500 square meters
I/ A U.5U meter median strip ould be constructed during Phase I and 11. y/ For the eventual full motorway a second parallel bridgewould be built.
Source; NOT DecOer 1984 (4.V70/48) - 102 -
TABLE 25
HUNGARY
TRANSPORT (ROAD/RAIL) PROJECT
Road Maintenance Equipment List
Estimated Price (1984) Item Description No. Unit Total
Salt spreader (truck mounted) 15 21,000 315,000 Side mounted snow plow 8 12,250 98,000 Highpower multi-purpose truck 8 36,500 292,000 Rotary snow-plow 8 81,250 650,000 Standard multi-purpose truck 20 26,250 :25,000 Ditching backhoe (truck mounted) 2 86,500 173,000 Miscellaneous equipment and tools - 38,000 $2,091,000 Spare Parts 209,000 $2,300,000
Road Evaluation and Testing Equipment List
Estimated Total Price Item Description No. (1984)
Impermeability testing equipment (field) 1 30,000 Impermeabilizing material testing equipment (Lab) 1 25,000 Nuclear Density Testing equipment (field) 7 45,000 buclear Density equipment calibrator (lab) 1 35,000 Bitumen content tester (lab) 1 65,000 Marshall compactor (lab) 1 15,000 Bridge deck freezing forecast device (field) 1 80,000 Road evaluation vehicle 1 500,000 Miscellaneous small equipment - 23,000 $818,000
Spare parts 82,000 $900,000
Source: MOT and mission December 1984 (4397D/49) - 103 - TAKE 26
TRANSPORT(RAIUROAD) PROJECT
Nungarocanion
List of Trucks and WorkshopEquipment
No. of Total Cost Item Description Pieces (US$OO)
1.0 VEHICLESOF IHICH:
1.1 Refrigerated
1 - Tractors2 and semi-trailer with heat-isolated superstructure 190 12.600
1.2 Specialized 85 5,OO
- Tractors and superstructures for cloth and furniture transport
- Tractors and semi-trailers with tank superstrucutre for transportation of dangerous chemical fluids
- Tractors and drawbar trailers with superstructure for cloth and furniture transpert
1.3 Nornal 275 12.30D
- Tractors and semi-trailers with large cubic capacity superstructure
- Tractors and bodyless lorry frames with 6x2 wheelconfiguration
- Tractors and bodyless lorry frames with 4x2 Sheel configuration
Total 550 30000
2.0 WORKSHOPEQUIPMENT
High pressure washing equipment 8 68 Output measuring testing bench 2 135 Exhausting equipment 2 10 Hydraulic pit Jack IS 75 Optical aCjuster for running gear 5 30 Block testing stand with rolls 5 125 Wheel balancing machine 2 20 Break-arum refacing machine 2 20 Rising scafolding bridge 6 36 Hydraulic triiune Set for chassis and cab 2 16 Electrical Steel nut spanner 15 27 Mechanization for storage system - 93 Diagnostic line - 205 Other machine-tools nd equipment 40
Total - 900
Grand Total 30.900
V1 Tractors with 6x2 and 4x2 iheel configurations for seau-trailers are interchangeable anong the various trailer types.
Sources Hungroccnion and mission February 1985 HUNGARY
TRANSPORT (RAIL/ROAD) PROJECT
Railway Component - Implementation Schedule
1985 1986 1987 1988 1989 ACTIVITY ACTIONBY J F H A H J J A S O N D J FM A N J J A S O N D J F N A N J J A S O N l J F M AM J J A SORDNI J FM A H J J A S ON D
1. Preparationof Tenders MAV BankApproval Bank Notification in Newspapers MAV/Dank Bidding Period Suppilers BOdEvaluation MAY/Dank Bank Consent for Contract Award Bank Signing of Contract MAV/Suppliers m CankApproval Bank m Effectiveness of Contract
2. FerencvarosEast Marshalling Yard Designing Delivery Period MAY/Suppliers - Construction/Installation AKAV __ I Put Into operation MAY Phase I PhdsM I PhaTT Phase'IV
3. Track Constructlon and Maintenance machines MAY/Suppliers Ballast Cleaning Machines MAV/Suppliers Taping. Leveling Machinesfor _ Switches PAV/Suppliers - Taqing, Leveling Machinesfor Tracks MAY/Suppliers Sleepers ChangingMachines MAS/Suppliers BallastProfiling Machines MAV/Suppliers _ SwitchExchanger HAW/Suppliers SmallMAchinery MAV/Supplters _ _ _
4. Container Handling Machines HAV/Suppilers Front Loading Truck PAV/Suppliers Side Loading Truck MAV/Suppliers Self Loading Saddle Tractor MAV/Suppliers withTrailer _ _ Mobile TelescopeCrane for _ Container Handling PAV/Suppliers Container Grip PAV/SupplIers
S. TrainingProgr Selection of Trainees PAVY Trainees Attendance Trainees __ m
1/ Phasesdenote technological processes of operations in marshalling yard (see par&. 3.22) . Source HAV and mission estimates. npcember 1984 HUNGARY
TRANSPORT(RAIL/ROAD) PROJECT
HighwayComponent - Implementatlon Schedule
1 9 8 5 1 986 1987 1 988 a 1989 1990 ______I! III IV I 1i III IV I 1I III IV I LI III IV I II III TV I II III IV CivilWorks - Bidding Prequallfication- - Docuent Preparation _ _ BankReview BiddingPeriod Evaluation BankReview Contract Award
Civil Works- Construction LandAcquisition PrmeratoryPre ks Bridges Drainage------Earthwwrk Pavent- ---- i OtherStructures Finishing MaintenanceEquiLwet Docuent Preparatfon BankReview Bid(s)Sc Evaluate(E) B E B E _ E BankReview Contract(C)and Delivery(D) C C
Evaluation/TestingEquhip, DocumentPreparation BankReview I Bid(S) 8c Evaluate(E) I EBE BaaikReview Contract(C)and Del IvoryD C 0c DC
Source;iDT and Mission Estimates Oecember1984 HUNGARY
TRANSPORT(RAIL/ROAD) PROJECT
Hungarocamion Cowponent Implementation Schedule
1985 1986 1987 1988 1989 1990
Component 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4
1. Trucks and Trailers 191 Procurement 1.1.1 Bidding documents (preparation/approval) 1,1.2 Bids requested 1.1.3 Bid evaluation 1.1.4 Contractsestablished 1.1.5 Deliveries t
2. InfrastructureItem- - InformationSystems - Maintenance Equtpment - Spare - Parts Control 0% 2.1 Procurement 2.1.1 Bidding documents (preparation/approval) 2.1.2 Bids requested 2.1.3 Bid evaluation 2.1.4 Contractsestablished 2.1.5 Deliveries
3. Studies - InformationSystems - Marketing - ContainerServices - Truck Terminal 3.1 Approval TOR 3.2 Selectionof Consultants Approval/Contracts 3.3 Length of Studies
Source: HC and mission estimates. December 1984 - 107 -
TABLE 30
HUNGARY
TRANSPORT(RAIL/ROAD) PROJECT
Estimated Scheduleof Disbursements (US$ Million)
IBRDF';eal Year R A I L W A Y S H IG H W A Y S HUNGAROCAMIION T O T A L and Quarter Quarterly CumulativeQuarterly Cumulative Quarterly Cumulative Quarterly Cumulative
1986 I. September 30, 1985 ------II. December31, 1985 0.2 0.2 - - 0.6 0.6 0.8 0.8 lIt. March 31, 1986 1.0 1.2 0.6 0.6 1.0 1.6 2.6 3.4 IV. June 30. 1986 1.5 2.7 0.5 1.1 1.3 2.9 3.3 6.7
1987 1. September30. 1986 1.7 4.4 0.7 1.8 1.0 3.9 3.4 10.1 II. December31. 1986 2.2 6.6 0.8 2.6 0.8 4.7 3.8 13.9 III. March31. 1987 1.8 8.4 1.4 4.0 0.9 5.6 4.1 18.0 IV. June 30, 1987 1.8 10.2 0.9 4.9 1.0 6.6 3.7 21.7
1988 I. September30, 1987 1.0 11.2 1.4 6.3 1.0 7.6 3.4 25.51 II.December 31, 1987 1.0 12.2 1.5 7.8 0.7 8.3 3.2 28.3 -II. March31. 1988 1.4 13.6 2.1 9.9 0.7 9.0 4.2 32.5 rV. June 30, 1988 1.7 15.3 1.4 11.3 0.7 9.7 3.8 36.3
1989 I. September30, 1988 1.7 17.0 1.6 12.9 0.8 10.5 4.1 40.84 II. December31. 1988 1.6 18.6 2.0 14.9 0.8 11.3 4.4 44.8 III. March 31. 1989 1.0 19.6 2.9 17.8 0.7 12.0 4.6 49.4 IV. June 30, 1989 0.5 20.1 2.8 20.6 0.8 12.8 4.1 53.5
1990 1. September30, 1989 0.5 20.6 3.0 23.6 0.6 13.4 4.1 57.6 II. December31, 1989 0.4 21.0 3.0 26.6 1.0 14.4 4.4 62.0 III. March31. 1990 - 21.0 2.3 28.9 0.6 15.0 2.9 64.9 IV. June30. 1990 - 21.0 2.5 31.4 0.8 15.8 3.3 68.2
1991 I. September30, 1990 - 21.0 1.7 33.1 0.7 16.5 2.4 70.6 II. December31, 1990 - 21.0 2.3 35.4 0.5 17.0 2.8 73.4 III. March 31, 1991 - 21.0 1.5 36.9 - 17.0 1.5 74.9 IV. June 30, 1991 - 21.0 0.1 37.0 - 17.0 0.1 75.0
Source: MissionEstimates December1984
4397D/50 HUNGARY
TRANSPORT(RAIL/ROAD) PROJECT
Railway Component
Frei8ht and Paasenger Traffic Actual 1978-83 and Projections 1985-90
______A______FaLtAm te Fbogm t 1978 1979 1980 1931 1982 13 1984 1985 1986 187 1988 18 19
IUwN)WSRW. * (a) 1TxmageCill, net tc,m) mtic 82.6 82.2 78.8 80.8 79.7 76.2 72.1 72.3 72.8 73.8 74.7 75.5 76.2 Internatiail Tramit 19.3 20.0 19.8 18.1 16.8 16.2 16.1 16.2 16.4 16.6 16.9 17.2 17.5 Eq=t-krxct 32.2 31.0 30.5 31.4 29.9 30.9 31.3 31.5 31.8 32.1 32.4 32.8 33.3
Total 134.1 133.2 129.1 130.3 126.4 123.3 119.5 120.0 121.0 122.5 124.0 125.5 127.0
(b) Valuze Oil. net tabk-n
ltestic 11,367 11,538 11,020 11,337 11,331 10,844 10,318 10,562 10,825 11,090 11,363 11,546 U,739 Internatical 12,820 12,793 13,021 12,614 11,596 11.933 12,005 12,207 RL407 12,600 12,800 13,100 13,400
TbW 24,187 24,331 24,041 23,951 22,927 22,777 22,323 22,769 23L225 23,690 24,163 24,646 25,139 n . PASE PAIC (a) lwetic Paavgsa (n-) 299.9 288.8 278.3 265.7 259.2 231.1 232.1 229.3 230.2 231.1 232.0 232.9 233.9 Internati1al 4.6 4.3 4.1 4.2 3.2 3.3 3.7 3.8 3.8 3.9 4.0 4.1 4.1
'ibtal 304.5 293.1 282.4 269.9 262.4 234.4 235.8 233.1 334.0 235.0 236.0 237.0 238.0
(b)Pass. Wa (mil.) D.utic 12,909 12,663 12,765 12,592 12,271 10,312 10,484 10,578 10,676 10,776 10,876 10,978 11,076 Intwn itkcnul 842 806 785 797 642 669 722 740 755 770 785 800 820
Ta1 13,751 13,469 13550 13,389 12g913 10,981 11,206 11,318 11.431 11,546 11,661 11L778 11,896 W
III. 'WAWIC UWi *Dll.lfmilJIOm=) 37,938 37,800 37,591 37,340 35,840 33,758 33,529 34,087 34,656 35,236 35,824 36,424 37,035
Source: MAV and Mission Estimates Comnrneraol& Opemlound.
Secieltna
______Inte ctiona
Ecornomics Rejnons
______~ ~ ~~~~9.soetv Pesnrkel& _ Orgaomion _
Sofety& ronti1
| Legd |_$ rwwS4 & |-
DeveL _-ent
Fnunce 0
!E&9wnce>wEction Mn ODetCXttLegal
0
0 I I . | ~~~~~~~~~PrcurengerX 2 _ _S xionono h _ ,l P
| wt Stoes ntsl | | ett h CentwalAcconnting n lX
Bridgeco n & Operatrionaltorate | E"tis9(OCL)7roCk Ovedml n ~ Aiserchd~~oSupplvlra"e 1<
Passenger stores ~'~Otc uf } Slatla& Ll~ ~~Finnc Tocetiona LI-
Firedlnsticot icoron tig (OCL.)Enterp Ire lcnn
Typing & PdniingContrd DispatchPermonent Way
Slatiorerv & ~~~~~~~~~~~Traction&
RlntlitingStc iMintennce n|Asolnltiotin 1 . I Wtxk§3shops | Data Proce.slng |t 1 ~~~Center
1 1WVH3
- 601 - HUNGARY A TRANSPORT(ROAD/RAIL) PROJECT StaffAppraisal Report Organizotlonof theMinistry ol Transpod
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WOBank-27=6 - 111 -
CHART3
HUNGARY A TRANSPORT(ROAD/RAIL) PROJECT Staff Appraisal Report Organization ot Hungarocamlon
General Manager
Tran~~~a41~Technical FRnancial DngmetCeaimen LOW0 Trnwort |Pemict l_| Rnch la orFeonel | Internotion31d Ll e Management Manogwnent Mongoement a Sociol W:ere |nkeatlons Depo1ment
Tckirnofd lJ Milnne|j F c Personnel Protob. l, Takingof MantesoceFinaonceWear Orders Servicing n Jenore I 1 * |
Develarjnent of Planning & Coordlncxtion d Gioupage *_VenkeRaet An.lng of Dota Eduction Internotional
B Offices Suppiy Accountancy |-|Wore Ar|
Transport Breakdown | Medical Foreign Organization 5e ivce service partnes
WAodtdBank-27040 -r~~~~~~~~~~~~~~~~~~I H U N G A RY TRANSPORT(RAIL/ROAD) PROJECT
TRANSPORTPROJECT CONTA,iNERTEWNALS, - PROPOSEDMOTORWAY CONSTUCTION (FIRSTPHASEI * 2D - 40 TONS FUTURECONSTRLCION ISECONDPHASE) * 5 TONS __ PLANNEDEVENTUAL CONSTRUCTION CZECH O *44:+ MAUSHALLINGYARD E-JSTINGMOTORWAYS * CONTAINERTERMINALS MOTORWAYSUNDER CONSTRUCTION RAILWAYINVESTMENT PLAN MAIN NATIONAL ROADS DOUBLETRACK ELECTIFICATION SECONDARYNATIONAL ROADS -44j, DOUBLINGOF EISTING TRACKS NATIONAL CAPITAL - I---4-TRACK REHABIUTATION --- INTERNATIONALBOUNDARIES
EI.d.4fi.d EXISTINGRAILWAY NETWORK, 12 a1 DOUBLETRACKS T. Le j I , SNGLE TRACKS T. -4--I- PRIVATETRACK (GUSEV) *)+~-I MARSHALLINGYARDS
To~G ~~ ~ ~ ~ ~ ~ .ZW~ ~ ~~~~~~~~o_~~~~~~~~~~~~~~~~~~ eerszeg
ria~ ~ ~~~ 0 21 30 4 IE
To> 0 10 Zi 30 4Ri MILES 0 IORD18773
t ~CZECHOSLOVAKIA|
To KoT..'e
ro Uzgo.od ( ~~~~~~~~~~\TOT Zhony U. S. S.R. SatormljoujhIly
To Lb T * . F, Xenyes!I'
X .Xav f(;3g~~~~~~~~~~~~~~~~ebre en
k.\ $; w) | <(t ROMANIA * I \ A Thzcs~~~~~~iuaenyo -To Ornd.o ugur~ ~ ~ ~ ~ ~ --
-t _t i l: 5 > ". 'a \i
vt >.n~~akee
* v4 \ A A 2 's tM) ~~~~~~~~~~~~BUDAPEST
20 40 60 KILOMETERS~~~~~~~~~~~~~~~~~~~~~~~~KIOETR 30 tOlES O 10 20 0 _0 j0 3A 4 O 'tMI0 LEEMl
FEBRUARY1985