Subsidies for the Hungarian rail freight transport sector

Financial investments and support for digitalisation efforts have been planned for Hungary on account of the current impact of COVID-19 and in order to make rail freight transport more sustainable.

On 9th November, Imre Kovács, Member of the Rail Cargo Group Board of Directors and Board Member of the Hungarian railway association HUNGRAIL met with László Palkovics, Hungarian Minister for Innovation and Technology to discuss the current impact of COVID-19 on the Hungarian rail freight sector. The meeting focused on the current situation as well as potential measures to increase the competitiveness of the rail freight transport industry.

Support for rail freight transport

Additional expenditure resulting from measures to tackle the pandemic have led to an increase in operational costs for railway companies. In order to help the transport industry become more sustainable, an EU regulation has now paved the way for reducing charges for the use of infrastructure. Consequently, the Hungarian Ministry of Innovation has developed a solution that should reduce the financial burden on the affected companies by reducing their investment and digitalisation expenses.

The Hungarian government has made an additional 30 billion Hungarian forints available for increasing the modal share of rail over the next five years. Applications for this support can be made for single wagon transport services in Hungary from summer 2021 and do not have to be paid back. The launch of this application system still requires approval from the European Commission, however the underlying package has already been sent to the EU.

Experts are also appealing for the provision of trailer-mounted cranes as a source of further support for the rail freight transport industry. The Hungarian Ministry is planning to carry out a ground-breaking study in order to weigh up the possibilities. The concept for an incentive scheme could be created by the middle of next year.  Concerning the state subsidies, László Palkovics emphasizes: “Despite the challenges they are currently facing, railway companies are still meeting their responsibility towards the economy and society. The Ministry is doing everything it can to help keep the Hungarian rail freight transport industry up and running”.