Budapest’s public transport system faces a serious crisis as several suppliers have terminated their contracts with the Budapest Transport Privately Held Corporation (BKV) due to the economic impacts of the Russian-Ukrainian war, Népszava reports. The news portal was informed by the capital’s primary public transport operator that they have had to renegotiate supply contracts, as most suppliers require a 30-50 percent surcharge for continued trade.
“Demands for contract amendments have multiplied due to the indirect economic effects of the [Russian-Ukrainian] war – exchange rate fluctuations, producer price increases, delivery deadlines, shortages of raw materials, transport capacities, etc.” have all impacted the situation, BKV wrote to Népszava. The company explained that the increase in asking prices have been paired with contract terminations,
this year, up to April, 36 contracts were terminated by our business partners. This equates to an additional expenditure of tens of billions of forints annually.”
The M3 metro line, which is currently under renovation, could be obstructed by the issue. Swietelsky Vasúttechnika Kft., the company responsible for the upgrade, has informed BKV that the Russian-Ukrainian war could impact labor due to the inaccessibility of steel materials previously sourced from Ukraine, as well as rising transport costs.
BKV emphasized that the leaders of the project have outlined the general parameters of the issue, but that the specific economic impacts of the war are not yet certain. Furthermore, the company added that “a significant supply of parts outlined in the renovation contract have already been provided, from which the operation of vehicles could be carried out for the time being.”
Featured photo illustration by Zoltán Balogh/MTI