Budapest to nationalize hop on-hop off sightseeing bus business

July 26, 2016

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Why tolerate competition when government can create a monopoly instead? Budapest City Council has decided that only one company will be able to operate hop on-hop off sightseeing buses in Budapest for the next 20 years.

There are currently six sightseeing companies in the Hungarian capital, four of them operating hop on-hop off buses, meaning tourists can get on and get off the vehicles anywhere they want. Altogether, the four companies have 55 vehicles and a revenue of HUF 1.5 billion (USD 5.4 million), from which they pay HUF 56 million (USD 197,000) every year to the Budapest Transport Company (BKK) and another HUF 8-10 million (USD 28-35,000) to the city and its districts.

In a closed-door session on July 8, the Fidesz-controlled Budapest City Council voted to award the lucrative business to one company in the form of a concession, reports Hungarian news website 24.hu.  The City issued a public tender on Monday despite the owners of the four companies publishing an open letter to the prime minister protesting the decision.

According to Magyar Nemzet the contract says the winner must operate 25 buses in the capital, including 70 locations and 39 stops. The winner will get the concession for 20 years. Those companies whose gross revenue has been below HUF 1.2 billion in the past 3 years cannot apply, meaning that only 3 companies – two foreign and one Hungarian – will be able to do so.