WHEN the second-round bidding for the sale of MÁV Cargo closed on October 19 it rapidly became clear that only four of the seven contenders who had passed the first round were still in the running.

The selection team must now choose between a Slovak consortium called Spedtrans-Slavia Capital, a Dutch-Czech group known as New World Resources, an Anglo-American consortium bidding as Cargo Central Europe and a grouping of Rail Cargo Austria and GySEV. Gábor Dióssy, Chairman of the Board at MÁV Cargo, expects the winner to be announced within one month, the hope being that a purchase agreement can be signed before the end of the year. Evaluation of the second-round bids will be based 90% on the price and 10% on staffing and development plans - the trade unions will be able to see the relevant sections of the bids and give their views to management before a decision is made. In the first round the emphasis had been on investment plans and the financial strength of the bidders.

Dióssy explained that the government's objective in privatising the national rail freight business was to ensure that the operator was released from state control so that it had the freedom to compete in an open market. Just as important was the aim of raising a significant sum of money, much of which would be ploughed back into improving MÁV's infrastructure, although this was 'not black and white'.

Dióssy said that from MÁV Cargo's point of view, the business would be freed from the long-winded public procurement process and that the new owner would be expected to invest in wagon refurbishment and upgrading of IT systems. The new company would have a dedicated locomotive fleet and would be able to seek out partners to develop the business. 'With no strategic partners we cannot grow as we plan', he said, adding that alliances with other rail freight operators would be essential in a competitive market. MÁV Cargo achieved a HF3bn profit on turnover of HF93bn in its first year, and Dióssy expects 2007 to be profitable too.

  • Tenders were called by MÁV in September for 25 dual-voltage locomotives, with an option for 25 more; a further 50 may be needed by 2013, according to CEO István Heinczinger. While the railway will shortly receive 300 second-hand coaches from Deutsche Bahn, it plans to order 185 new coaches for inter-city services, together with 30 self-propelled trainsets; a further 15 sets will be needed for international routes. In the meantime it is taking delivery of 10 four-car Bombardier Talent EMUs and 30 Stadler Flirt EMUs in 2008-09; both contracts have options for further units.