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Budapest Sues German Supplier after E-ticket Implementation Failure

Ábrahám Vass 2021.09.13.

German electronic ticketing system supplier, Scheidt & Bachmann, will be sent to international arbitration by Budapest Transport Center (BKK) following failures to implement the e-ticket system on public transport. The company’s decision is supported by the capital’s leadership too, leftist daily Népszava reported.

According to the BKK, the German company that took on to design, build, and operate the electronic ticketing system, called AFC (Automated Fare Collection) for 91 million euros (27 billion euros at the time), has only completed four of the seven phases of the project. Consequently, the system has never worked, and some of the ticket readers and gates purchased are still sitting in warehouses. According to the latest calculations by the capital, the project’s loss amounts to more than HUF 9 billion (EUR 26 million now). In addition, the total cost has risen to almost HUF 37 billion (EUR 106 million).

Budapest Continually Fails to Introduce an Automated Fare Collection System
Budapest Continually Fails to Introduce an Automated Fare Collection System

The Budapest public traffic system (the BKV) still hasn’t introduced an automated fare collection system. However, over the last two decades, according to the press, the city has spent nearly 9 billion forints (1 billion HUF= 3 million EUR) on planning and feasibility studies. The new system is still years away from being launched. The Hungarian […]Continue reading

As a matter of fact, the decision to set up an investigative committee was decided much earlier, back in June 2020, but the Budapest City Assembly was unable to convene until this summer due to the state of emergency in effect because of the coronavirus pandemic.

“There is no way that there isn’t anyone responsible for Budapest’s biggest scandal of the last several years, so we are trying to drag the case out of the pit now,” Budapest mayor Gergely Karácsony said back in August 2020. BKK’s new leadership, an investigative committee, and the authorities are investigating criminal liability for the company’s financial situation, he said, also underlining the political responsibility of the previous Budapest leadership. The authorities are working to identify those who benefited from the misuse of taxpayer money, he further explained.

At their last meeting, the panel chaired by Councillor Gábor Havasi (of Momentum), decided to hear Dávid Vitézy, the initiator of the project, Balázs Szeneczey, the former deputy mayor in charge, and Kálmán Dabóczi, the former head of BKK who was sacked after the abrupt failure of the e-ticket. Following a reportedly tense debate, it was decided that former Mayor István Tarlós and Katalin Walter, the current CEO of BKK, will be present at the hearing, too.

The management of BKK, headed by CEO Kálmán Dabóczi, and the people responsible for the project were all dismissed by István Tarlós back then. The former (Fidesz-backed) mayor also filed charges in order to clarify possible abuses in connection with the AFC project. Based on the complaint, the National Bureau of Investigation launched an investigation against an unknown perpetrator, which has since remained ongoing.

The newly announced lawsuit has been put on the back-burner for a long time, and with reason, Népszava notes. According to a report prepared for the newly-elected BKK board in 2019, a procedure at an arbitration court could take up to 2-4 years.

The original contract, made in 2014, could have been a good one, but it has been amended several times to the capital’s disadvantage, as quoted by Népszava from a report prepared for the new BKK board. Back then, it was a very ambitious project, with Tarlós wanting to link it with state railway MÁV’s and state autobus Volán’s systems too.

featured image illustration via Zoltán Balogh/MTI