toll roads

The Orbán government’s latest “unorthodox solution”: A unique toll system

The Hungarian public is fixated on everything related to cars and driving, especially when it’s a question of money. Announcements about gasoline prices are daily fare in Hungary. If the price of gasoline goes up or down a couple of forints, it’s big news. Hungary is a poor country, we must not forget. Perhaps the most serious crisis since the change of regime occurred when it was announced that gasoline prices would have to be raised substantially. A blockade of all roads nationwide by taxi drivers paralyzed the country for three days and forced a government retreat.

Therefore it’s mighty strange that the Orbán government, already under considerable domestic and foreign pressure, decided to introduce a new toll system–and a badly designed one at that, which is bound to encounter serious opposition.

The system is geographically based. Each county, and there are nineteen of them in Hungary, is a separate toll unit. A driver who plans to drive on a toll road but strictly within the confines of his county need purchase only a single “matrica/vignette.” A few decades ago that might have been reasonable. A trip from Pécs to Harkány was considered to be quite a journey, and going to Hosszúhetény was an outright adventure. But these days, even with lower gasoline prices, people with cars are a lot more mobile.

The maps the government provided to make car owners’ lives easier are confusing. Some of them even had mistakes. If I figure it right, a person driving from Budapest to Pécs on the relatively new superhighway will need four matricas. Admittedly, the new county matricas are a great deal cheaper (5,000 Ft. each) than the former pass that was good for the whole country at 42,980 Ft/year. But what a hassle to figure out what counties you’re going through each time you plan a trip and which passes you’ll have to buy before you venture outside your own county. Even worse, think about those occasions when you have to get somewhere quickly–a family illness, a business emergency, the funeral of a colleague. You don’t just gas up the car and go. You also have to make sure you have the appropriate passes.

Let’s take a not too far-fetched example. A businessman who travels frequently from Pécs to Budapest will have to buy three or four matricas. And let’s say his family also wants to visit an aunt in Somogy or in Zala. The expenses start adding up.

The suspicion is that the government eventually wants to stop issuing those matricas that are good for a limited period of time. They are handy when the family goes on holiday to Lake Balaton or the Mátra Mountains. For ten days they pay only 2,975 Ft.; for a month, 4,789 Ft.

Drivers had to purchase their matricas by January 1, but as of December 29 no matricas were yet available. The new system was introduced in a great hurry without adequate preparation, as even Gergely Gulyás, the honey-tongued Fidesz politician, had to admit. By Friday (January 2) the computer system handling the issuance of matricas at gas stations crashed. There were long lines of people standing in the cold and rain in front of the headquarters of the office that takes care of the country’s roads. Purchasing passes online was not any easier because the site couldn’t handle the traffic.

And confusion reigns. Csaba Hende, the minister of defense and a member of parliament for Vas County, is furious. Based on the information he received, he promised his constituents that M86, a road between Szombathely and Vát, was going to be toll free. Came the surprise the following day: anyone using this new road will have to get a county matrica.

Utpalyak

There are bits and pieces of roads–because this is what we are talking about–where the introduction of tolls makes no sense. Perhaps the most egregious example is the road to the Budapest Airport. A single trip a year to and from the airport would require a Budapester to buy a county matrica.

The attached map gives some idea of what I’m talking about. As you can see, M1 and M0 serve a very important function: to save Budapest from heavy thru traffic, mainly the thousands and thousands of trucks that cross the country toward the north, the east, and the south. It is hard not to notice that certain parts of a single highway are free while other parts are toll roads. The reason is that those sections marked in green were built with EU support, for the specific purpose of ridding Budapest of the heavy truck traffic that is environmentally harmful. The European Union demanded that these roads remain toll free. Well, on the map they are marked free, but the roads leading to these free sections are toll roads, so, contrary to EU intentions, truckers don’t get a free ride around Budapest. You may ask what the orange-colored sections signify. These three short sections are still within the limits of Pest County, but if you drive onto them, you must have a county matrica for Fejér County in the case of M1 and M7 or Nógrád County in the case of M3. The distances are small. The trip from Törökbálint to Pusztazámor, for instance, is only 17.3 km or 10.7 miles.

A civic group that already blocked the M1 and M7 superhighways for a minute in December is threatening the government with an ultimatum. They now promise a total blockade of all roads if the government does not withdraw the new county toll system by the end of February. They will also demand the resignation of the Orbán government. The organizer is Zoltán Büki, a businessman and Együtt-PM activist in the county of Nógrád.

Public patience is coming to an end: What can Viktor Orbán do? Not much

Some of you want me to outline a scenario that could follow the unheard-of loss of popularity of the government, Fidesz, and Viktor Orbán personally. I am no fortune teller but, contrary to those readers who believe that the events of the last two months will have no adverse effect on the Orbán government in the long run, I see some signs that may lead to the eventual collapse of the system.

I base this admittedly hedged forecast (note the “some” and “may” in it) on data suggesting that Viktor Orbán has lost the trust of millions of his followers. I understand from news reports that Orbán and the Fidesz leadership by now have come to recognize the seriousness of the situation. Apparently they are preparing the ground to rebuild the prime minister’s tarnished reputation. The word is that he is planning to be more “active,” which in this context means that he will show his compassionate side. Today he visited an orphanage and held one of the little girls in his lap. The picture was shown all over, of course.

But I think the situation in which the prime minister finds himself won’t be fixed by a few smiles and friendly gestures toward his constituency. He has lost the people’s trust. And for that development he alone is to blame.

ATV showed a short video today on which a journalist confronts people on the street and tells some of Orbán’s latest fairy tales about the decrease in poverty, the increase in job opportunities, the excellent GDP figures, and the reduced utility prices. First of all, a few months ago when journalists tried to engage people on the street in conversation about political issues most people either refused to answer or the few who did usually praised the government and Orbán. Today’s video shows that people are no longer afraid to speak, and when they speak they don’t hide their opinions. The most frequently recurring answer was: Orbán is lying! What he says is not true. If that belief takes hold among the electorate, Orbán’s political future is in doubt.

There is another problem that, in my opinion, will prevent Orbán’s political comeback–and we know that without him there is no Fidesz either. The coffers are empty. No longer can the government appease the populace by throwing a few thousand forints their way, as they did when they lowered utility prices, an admittedly brilliant political stroke. Today they cannot give anything. On the contrary, they have to extract more and more money from the people in the form of taxes because otherwise they cannot keep the deficit under 3%. And if they overstep this magic figure, the excessive deficit procedure may be imposed, and this may mean the loss of subsidies from Brussels. It is obvious that they are desperate. They know that they should not irritate the already antagonistic voters with more and more taxes, but they seem to have no choice because they already spent the money on all sorts of superfluous projects, like stadiums, MOL shares, bank purchases, and so on. And then there is the corruption that has resulted in the loss to the public purse of billions in taxpayer money. Their past irresponsible (and worse) financial maneuvers may well be their undoing.

Another consideration is what I see as an erosion within Fidesz-KDNP. I already mentioned the revolt of KDNP’s chief Zsolt Semjén on the issue of a new law on the status of churches. He was joined a few hours later by Rózsa Hoffmann, who in the past was a faithful executor of Viktor Orbán’s ideas on education. Suddenly Hoffmann discovered that diverting children from gymnasiums is a very bad idea and that making employees of the Prime Minister’s Office work ten hours a day is not even legal. Or, there is the case of János Bencsik, a Fidesz member of parliament since 1998, who expressed his strong opposition to compulsory drug testing of children. As he put it, not even László Trócsányi, minister of justice, or Gergely Gulyás, the legal wizard of Fidesz, could make such a law constitutional. Even Gulyás thought that Máté Kocsis’s suggestion was “unorthodox” while “the world of the law is generally orthodox.”

The latest attempt at acquiring another 20 billion forints by making M0, a six-lane highway that more or less encircles Budapest, a toll road enraged not only commuters from nearby towns but also the Fidesz mayors whose districts would be affected by the decision. Again it was a last-minute ad hoc decision without any consultation. The mayors are not the only ones up in arms. Attila Chickán, minister of the economy in the first Orbán government, said that the decision will have a negative impact on the lifestyle of the people of Budapest.

The M0 will be a toll road Are these people tired of governing?

Highway M0 will also be a toll road.
Are these people tired of governing?

And finally, young until now pro-Fidesz journalists have become disillusioned. Perhaps the best example I can cite is Ákos Balogh, editor-in-chief of Mandiner. I highly recommend his opinion piece that appeared today. The title is telling: “When ‘The Anything is Possible’ Ends.” Everything that worked in the past no longer works or, even worse, is counterproductive. In fact, Balogh goes so far as to state that the Orbán government, instead of remedying the “mistakes” of the last twenty years, itself became part of it. It did not finish the regime change as it promised but “it completed its failure.” Fidesz is good at campaigning but “sparkles less when it comes to governing.” Fidesz does not want to recognize that “something has changed,” and not only in foreign affairs as a result of the Ukrainian developments but also at home. Although “in theory” there will be no elections until 2018, “a government can be demobilized by broken public trust.” The lesson: “There is never such a thing as ‘Anything is Possible’ because there is always a fault line after which everything falls apart.” “The borders of  ‘Anything is Possible’ are not sharp, one can only conjecture about them. One can know only after the fact when someone has overstepped them. Perhaps he already has overstepped them.” Harsh words from a former true believer.

The Hungarian government’s newest business venture: Installing an e-toll system

György Matolcsy’s failed attempts at putting together a budget that doesn’t need almost immediate adjustment are legendary by now. The final budget accepted in December looked suspicious from the very beginning. Matolcsy included about 400 billion forints from taxes that were not in accordance with European Union laws. If the ruling of the European Court of Justice goes against Hungary, which seems likely, the companies that were so taxed must be reimbursed. So, there is already a 400 billion hole in the 2013 budget.

But that is just the beginning.  There are two other listed sources of revenue that most likely will not add a forint to the coffers of the Hungarian state. You may recall that the Orbán government hoped to receive 75 billion forints from an e-toll system that would require trucks over 3.5 tons to pay per kilometer fees on Hungarian roads. The system was supposed to be functional by July 1, 2013. Another 95 billion forints of value-added tax was supposed to be received by introducing a cash register network directly connected to the Hungarian equivalent of the Internal Revenue Service.

Well, it looks as if neither system will be in place by July 1. Here I would like to explain what went wrong with the e-toll system. Let’s start with the fundamentals. To work out such a complex system takes a lot of time. For example, in Germany, where the system functions well, the government began thinking about its introduction in 1998 but the law regarding the e-toll system was enacted only in 2002. The Germans hoped that the system would be up and running in 2003, but it was completed only in 2006. It is based on a satellite positioning system.  The Austrians also took their time planning and eventually setting up a system in 2003. In Hungary, by contrast, the decision was reached within a few months and by September companies were invited to tender bids for the new electronic toll road system. There were two bidders: T-Systems, a unit of Magyar Telekom, with a 53.4 billion forint bid and Getronics with a bid of 34.89 billion forints. The Hungarian government opted for the lower bid although Getronics had no prior experience in this area. On January 19, in large measure because of the hefty fines that would be levied if it did not complete the project on time, Getronics decided not to sign the contract. The Hungarian government, instead of turning to T-Systems, the under-bidder, decided to go it alone as a kind of “general contractor.”

Before pondering the wisdom of this move, let’s go back a bit in time to review Viktor Orbán’s attitude toward tolls in general. When he became prime minister in 1998 there was a functioning per kilometer system in place. It was the old-fashioned variety, with gates where one got a ticket which drivers paid once they left the toll road. Viktor Orbán in those days didn’t like that system. In its place the first Orbán government introduced a system based on prepaid fees that allowed the owner of the car to be on the road at certain times. It was called the “matrica” system. Matrica means sticker in Hungarian.

So, after 1998 all the “gates” on the toll roads were dismantled because Orbán maintained that “gates are for football fields and not for roads.” At that time there were altogether about 80 such gates on two highways (M1 and M3). To build them cost about 5 billion forints; it was another 1 billion to demolish them. I remember being horrified at the idea of demolishing these gates and substituting the “sticker” system that I found unfair. After all, a valid sticker cost the same whether the person drove 200 km or 20km on any given day. Moreover, ascertaining whether a driver had a valid sticker was haphazard; the state relied on spot checking.

Fourteen years later Orbán obviously changed his mind. As far as I’m concerned this would be fine if the e-toll system was professionally and competently designed and executed. But, according to rumor, the job will end up in the hands of companies whose management teams have close ties to the government. The rationale for choosing them will be based not on experience and competence but on political connections. Most people claim that in Hungary there is simply no company capable of creating an e-toll system that is up to snuff. Yet Orbán promised the pensioners in Vásárosnamény that on January 23 Hungary will have an e-toll system that will be all Hungarian.

Illustration to autopult.hu's article on the subject of e-toll

The illustration accompanying autopult.hu’s article on the subject of  an e-toll system, Hungarian style

The government’s self-confidence is not shaken. András Giró-Szász announced that Getronics’s pulling out is only “a minor detail.” Orbán assured his listeners that all the budgets he submitted in the past went through with flying colors and this will also be true of the 2013 budget. Well, flying colors is surely a bit of an exaggeration because we all remember how many times Matolcsy had to change the figures and how many new taxes had to be introduced to meet the EU’s deficit target.

A toll system that works only in Hungary and that is not compatible with those of other countries in the European Union would be a waste of money, according to experts. Apparently within a few years the European Union is planning to introduce a single system that will be based on satellite technology. There is another problem if a unique Hungarian system is introduced. There is a Union rule stating that trucks from EU countries cannot be stopped at borders. That means that inside of the vehicles there must be a piece of equipment that is able to record the traveled kilometers. In an incompatible system that wouldn’t work. Trucks would need a separate Hungarian recording system. In addition, European Union rules require that all information about time, route, etc. must be safely stored, and experts fear that any system that could be introduced in five months wouldn’t be sophisticated enough to ensure the safe storage of information.

All in all, most people are pretty certain that with the Hungarian state as “general contractor” the proposed e-toll system will be a flop. Earlier the Hungarian government wanted to have its own mobile service and announced its plan with great fanfare. Even though the new company existed only on paper, it received a frequency necessary for operation. The government even appointed a CEO. Everybody told the government that it was an unnecessary expense. There were three other providers and there was no reason to have a fourth company. As a blog writer said, “the catastrophe was predictable.” And it was. The blogger is certain that the same fate awaits the e-toll business of the Orbán government.