Hungary's Minister of Construction and Transport, János Lázár, has announced a comprehensive ten-year program aimed at revitalising the nation's railway and road infrastructure. This ambitious plan, backed by a multi-billion euro investment, encompasses the modernisation of approximately 3,000-3,500 kilometers of railway lines currently under speed restrictions, the construction of new motorways and expressways, and the upgrade of existing road networks.
Following a challenging year for the Hungarian construction industry in 2023, marked by a significant reduction of approximately HUF 5,000 billion (EUR 12.6 billion) in public investment, the government is now poised to inject substantial funds into the sector. The minister emphasised the importance of this investment for stimulating economic growth and improving transportation efficiency. He acknowledged the difficulties faced by the construction industry in the previous year, citing layoffs and financial struggles, but expressed optimism for a recovery in 2024 with construction inflation expected to fall to 1-2%.
Railway Renewal
A key aspect of the program is the renewal of Hungarian railway lines. With speed restrictions currently in place on roughly half of the 6,000-kilometre network, the government aims to eliminate delays and enhance the overall efficiency of rail transportation through a comprehensive modernisation effort. To fund this ambitious project, the government is actively seeking loans from European investment banks, signalling a commitment to invest billions of euros in the coming years.
Road Infrastructure Development
The road construction program is equally ambitious, with plans to expand the motorway and expressway network, as well as upgrade existing roads. This initiative is not only expected to improve connectivity and transportation efficiency but also to generate substantial revenue for the state through increased toll collection, which is projected to double from the current HUF 600 billion (EUR 1.5 billion) to between HUF 1,000 and HUF 1,200 billion (EUR 2.5 and EUR 3 billion). Recognising Hungary's strategic location on the West-East axis, the government sees this investment as crucial for bolstering the country's position as a key transport hub.
Additional Projects
In addition to the railway and road projects, the government has announced plans for various other construction initiatives. These include the construction of new bridges, with a particular focus on the southern city of Mohács, the development of a new campus for the Pázmány Péter Catholic University in Budapest, estimated to cost between HUF 250-300 billion (EUR 633-760 million), and the renovation of public housing in 175 districts across the country. The minister also emphasised the importance of renovating a significant portion of Hungary's 800 bridges, highlighting the need for continued investment in infrastructure maintenance.
Focus on Regional Development
The minister also highlighted the importance of regional development, pointing to the ongoing transformations in cities like Debrecen and Szeged, fuelled by major industrial investments. These developments are expected to create 20,000 new jobs in Debrecen alone, with the potential to increase the city's population by 60,000 in the coming years. Szeged is also experiencing a similar boom due to the arrival of Chinese giant BYD.
The unveiling of this comprehensive ten-year program, backed by a multi-billion euro investment, marks a significant commitment by the Hungarian government to modernise the nation's infrastructure. With substantial investments in railway and road networks, alongside various other construction projects, the government aims to enhance connectivity, stimulate economic growth, and improve the quality of life for its citizens. While the previous year presented challenges for the construction industry, the government's ambitious plans signal a renewed focus on infrastructure development and a promising future for the sector.