JOINT STATEMENT
IN ORDER TO REDUCE THE NEGATIVE EFFECTS OF THE DRASTIC INCREASE IN ELECTRICITY PRICES AFFECTING THE COMPETITIVENESS OF THE RAIL FREIGHT SECTOR
The Hungarian Rail Association, as the number one group representing professional interest in the Hungarian railway sector and an organization with a strategic partnership agreement with the Ministry of Innovation and Technology, is firmly opposed to all factors affecting against the competitiveness of the railway transport sub-sector, such as against the drastic, negative effects of electricity prices on the railway sector.
Railway companies, which contribute by more than 50 million tons of goods a year to Hungary's economic performance and provide a livelihood for nearly 10,000 families, are struggling for their own existence as it becomes increasingly cost-effective to shift transport from rail to road due to the drastically increased traction energy prices compared to January 2021. They need to develop scenarios for using diesel locomotives again on the network electrified and refurbished from multi-billion euros, for the remaining rail freight that cannot be diverted to road due to the nature of the goods, so that they can provide more stable and affordable service prices. This would be catastrophic in terms of climate protection, the safe return of Hungarian families to their homes on our roads, and the national economy.
There would be no need for prioritised government developments (development of the V0 railway ring, development of the Budapest-Belgrade railway line, development of Záhony, etc.) as well as for the aid scheme for single wagonload transport, the aim of which is to achieve the climate protection targets, ie. to increase the share of the rail market in freight transport to 30 percent by 2030 from the current share of 18 percent, that is, to almost 75 million tonnes from the current 50 million tonnes.
However, Businesses will have no choice because while the price of traction electricity literally explosively (by 300% compared to the average price in 2021) has risen in recent months, that of diesel has risen only relatively (by 14.3%), which is significantly lower than in the case of rail freight trains, which still operate with electric traction in 90%. This gives way not only to the use of diesel locomotives but also, and above all, to road freight transport.
The share of energy costs in the direct operating costs of railway companies was already around 20 percent before the current price explosion.
Rail freight transport is significantly more energy efficient than road transport and is sustainable in terms of the ever-increasing share of electricity from renewable energy sources. Transport by truck is responsible for about seven times more greenhouse gas emissions than transport by rail.
Nevertheless, the Government supports road transport with more than HUF 30 billion a year, and at the time of unleashed energy prices it maximized the price of fuel, which it made predictable for another three months with their announced measures.
The representatives of the railway companies are unanimous in their view that the drastic rise in the price of traction energy has risen to such a level that the rail freight market could collapse at any moment, which will have drastic consequences for the economy as a whole:
The country will be avoided by transit traffic, so Hungary will lag behind in the fight for international commodity funds (Europe - Asia). The remaining traffic will be diverted to roads, thus deteriorating our roads and air quality, and putting families on the roads of Hungary at greater risk. Furthermore, it would have a catastrophic effect on our national economy if the export of domestic products became uncompetitive with the drastic decline of rail freight transport, and the railway services for strategic companies and power plants were hampered. In addition, due to the higher purchase costs of imported products, the inflationary effect that has been plaguing Hungarian families for many months would increase further.
The livelihoods of more than 10,000 railway families will be jeopardized as companies will not be able to reimburse even the January traction energy bill, so we urge immediate state intervention and ask you to consider the solutions proposed by MÁV and HUNGRAIL, and provide funding at least until 30 June 2022 in order to mitigate the negative effects of soaring electricity prices.
The following companies joined the statement
Rail Cargo Hungaria Zrt. MMV Zrt. CER Hungary Zrt.
METRANS Danubia a.s. Eurogate Rail Hungary Zrt. DB Cargo Hungária Kft.
PKP Cargo International HU Zrt. LTE Hungária Kft. RETRACK Slovakia s.r.o.
Komplex Rail Kft. Central Railways a.s. FOX Rail Zrt.
RTB Cargo Hungaria Kft. PRVA Slovenska Zeleznicna a.s. MTMG Zrt.
V-Híd Vagyonkezelő Kft. Train Hungary Magánvasút Kft. CD CARGO Hungary Kft.
Continental Railway Solution Kft. Petrolsped Slovakia s.r.o.
