LAST MONTH Hungarian Railways launched MÁV Start as a subsidiary company to run the passenger business, marking a key step in the government’s plans to reform the state railway.

The new company began life on July 1 using a temporary operating licence and start-up capital of 62bn forints. Rolling stock is initially being leased from MÁV, which is to become a state-owned holding company from January 1 2008.

By that time progress is expected with the sale of MÁV’s freight business to the private sector. Russian Railways Deutsche Bahn, Rail Cargo Austria and Rail World Inc are reported to be among the organisations expressing interest in MÁV Cargo.

Transport Minister János Kóka said before the launch of MÁV Start that the intention was to bring about a continuous improvement in service quality in a series of small steps. The changes are also expected to lead to better financial performance at MÁV following last year’s deficit of 86bn forints.

The government anticipates spending around 112bn forints on MÁV this year, and as much as 950bn forints may be available for new projects over the next six years, although this will depend on the sale of property and other assets.