Budapest Metro restoration could cost HUF 30-40 billion more than expected

May 30, 2017

Restoration of Budapest’s metro line M3 could cost a staggering HUF 30-40 billion (USD 108-145 million) more than the capital’s HUF 137.5 billion initial budget, according to mno.hu reports based on professional sources at the City Council.

According to mno.hu, the sudden escalation of costs is mainly owing to overpriced bids on the tender for track restoration. This latest jump in costs puts mayor István Tarlós in a difficult position, limiting him to two choices: either postponing the most-awaited and most-needed investment of his tenure as mayor, or setting aside all other investments and reallocating funds from the EUR 350 million European Investment Bank’s (EIB) loan.

If mayor Tarlós chooses the latter, the City Council’s debt would once more climb above HUF 100 billion, despite the fact the government not long ago assumed the capital’s debt. The City Hall took a loan of HUF 60 billion for the restoration of metro-cars in recent years and an EIB loan of HUF 18 billion for setting up the long-awaited e-ticket system in Budapest.

Escalation in prices of previous tenders for the metro renovation project sidelined investments such as the Újpalota tram line, which would connect downtown with the outer districts – something the similarly grossly overpriced metro line M4 was intended to do but, due to overspending, failed to accomplish. The planned renovation of the Chain Bridge and Castle tunnel would also be in danger, as these projects too would be covered by the EIB loan.

Mayor Tarlós has been trying to make an appointment with Prime Minister Viktor Orbán to discuss the matter, but according to mno.hu’s sources Orbán would only meet Tarlós after concluding his “Modern Cities” campaign in rural cities.

Construction of M3 began in 1970 and was completed in 1990, and although it is the busiest of the city’s four metro lines, it has seen no major renovation since its completion. The regular fire scares on the 30- to 40-year-old Soviet-made subway cars running on the line is a constant source of public outrage. According to a 2016 internal report by BKV, other systems and components of the line are in equally bad shape and need imminent restoration.