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Hungary Infrastructure Report Q4 2008Published by: Business Monitor International Published: Nov. 3, 2008 - 83 Pages Table of Contents
AbstractHungary’s transport infrastructure, like most of its Eastern European neighbours is heavily reliant onroads. However, Hungary lags behind its peers, as it has a relatively low number of motorways. With roadhaulage and domestic car ownership set to increase over the midterm period, Hungary will have to ploughfunding into this sector. Over Q408 a number of large road build projects have been announced and haveattracted the interest of major European companies operating in the sector. Germany’s Bilfinger Berger,Austria’s Porr, France’s Egis along with Strabag and Mota-Engil have all been active and participatedin tenders. Mota-Engil lost out to a Bilfinger Berger led consortium in June 2008 when the Germancompany signed a US$793mn contract to build a 65.1km stretch of Hungary’s M-6 motorway. Mota-Engil however was luckier in May 2008 when NIF Zrt, a Hungarian infrastructure developer, announcedit had awarded the construction of a 16.2km section of the M43 to the company. Money for the road buildis being sourced from the Hungarian budget and the use of public-private partnership (PPP) projects isallowing both the cost and the risk of the projects to be shared, therefore speeding up the process.Hungary can also turn to the European Bank for Reconstruction and Development (EBRD) for funding.Over the quarter the bank agreed to sign a loan worth US$115.9mn on a PPP project associated with theM-6. The road construction currently underway in Hungary will not only aid the country’s infrastructuredomestically, but will allow it better interconnections with its neighbours. In June 2008 the HungarianTransport Minister Pal Szabo and his Slovenian counterpart Radovan Zerjav opened a 1.5km road thatconnects Slovenia and Hungary. Hungary has a diversified power sector, though currently supply is failing to meet demand and thecountry is having to rely on being a partner in the CENTRAL grid to ensure that its power needs are met.Hungary is boosting its generation capacity and is utilising a number of fuels to do this. Unlike themajority of Europe, which is trying to decrease its reliance on Russian gas, Hungary is developing newgas-fuelled plants. The country is also ensuring its supply of the fuel by hedging its bets and signing up tothe two competing European pipelines, South Stream and Nabucco. Over this quarter alone two new gaspower plants have been announced. The two plants - one to be developed by Germany’s E.On and theother by the local energy company Emfesz - will add an extra 1,233 megawatts (MW). Hungary is alsodetermined to meet its EU power requirements and so is pushing the development of renewables.Iberdrola Renewables is involved in wind park projects in the country and the sector has the support ofPresident Laszlo Solyom. BMI’s updated construction figures demonstrate that the sector will experience mild growth over ourmid-term forecast period (2008-2012). According to the state statistical agency, in 2007, production ofvalue added by construction fell by 7.7 percent. The performance fall was typical in every part ofconstruction, but the infrastructure sector fell significantly. This was caused mainly by the significantdecrease - compared to previous periods - of the state orders. In 2008 the country’s construction sectorreal growth is forecast to contract by 8% and be worth approximately US$5.2bn and contraction willcontinue in 2009, as the is feeling the effects of macroeconomic turbulence in the region. By the end ofour projection period, in 2012 the industry is predicted to be worth US$6.2bn. In 2008, the constructionindustry is expected to make up approximately 7% of the country’s total work force; the sector’spercentage is set to grow with the 2012 percentage reaching 15.6%. The Hungarian construction industryis set to employ about 279,080 people in 2008 and we expect this number to increase over the midterm. Get Full Details About This Report >> |
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