Hungary will increase its Track Access Charges (TAC) by 14 per cent from 1 September 2024. This is the first time in two decades that TACs in the country have been increased in the middle of a year, as Hungarian rail association Hungrail pointed out. “The increase will most likely cause more damage to the state budget than the revenue expected from it”, the association stressed.
According to Hungrail, the two Hungarian infrastructure managers, MAV and Gysev, “must announce their fees 2 years in advance”. In other words, TACs are usually reassessed everytime a new timetable is designed, and never in the middle of a year with only a few months notice. This scheme provides the almost 60 railway operators in the country with more predictable conditions and services. With this new initiative, there is a risk of losing volumes to other modes, such as the road, but also other countries, with the concrete possibility that operators would choose routes bypassing Hungary.
Negative impact not only on rail
Consequently, this might be a significant thorn in the side of the rail freight industry in Hungary. “Due to the unplanned increase in costs, the companies will be forced to revise their contracts, which will lead to an increase in transport fees”, Hungrail added. Higher TACs also mean that companies will have less flexibility to invest in, for example, newer and more efficient locomotives.
A significant impact is also expected for about 700 small and medium Hungarian enterprises, who only moves small volumes mostly via single wagonload services. “It was a sudden hit for everyone involved, especially considering the current state of the Hungarian rail infrastructure”, Hungrail said. Moreover, imports seem to be at risk as well, since Hungrail claimed that a TAC increase will also translate into more expensive imported products which might also fuel inflation. Ironically enough, inflation was identified as the main cause behind the decision to increase TACs in Hungary.
Rising TACs are a European trend
Hungary is not the only country in Europe that decided to increase TACs. Sweden and Portugal also announced a rise of 40 and 8 per cent respectively. Germany is also planning a 16 per cent TAC increase, which led to a lawsuit led by eleven rail operators against the Bundesnetzagentur. This issue might be solved with an EU collective TAC approach, as the European Rail Freight Association recently underlined.
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