EBRD finances contactless travel cards in Budapest

Posted: 17 October 2013 | European Bank for Reconstruction and Development | No comments yet

EBRD-funded system will boost the Budapest economy and reduce its carbon footprint…

European Bank for Reconstruction and Development (EBRD) Logo

The EBRD is financing an innovative new ticketing system for public transport in Budapest, the first in Europe to accommodate contactless bank card technology.

The new system is likely to give the Hungarian capital’s economy a sizeable boost, reduce its carbon footprint – and will replace a status quo which still relies on paper tickets and mechanical punchers.

Many Budapest residents will tell you that their metro was the first “on the continent”. This cleverly excludes London, which had the first metro in the world.

But the Budapest metro, inaugurated to celebrate the millennium of the Hungarian nation in 1896 by Emperor Franz Joseph, was certainly a wonder of its time. And there is one thing that recalls an era long past: paper tickets.

“Tourists take pictures of our mechanical ticket punchers in buses and trams – many are surprised they still exist in real life,” said Levente Nagy, the director of business development of municipal transport authority, BKK.

“The system is a burden on the city – paper products are simply not flexible enough.” Today, Budapest wants to borrow another great idea from London: a 21-century automated fare collection system, known to “Tube” passengers as the Oyster card. But it will do one better.

“The Budapest system includes a high level of innovation,” said Jean-Patrick Marquet, Director for the EBRD’s Municipal and Environmental Infrastructure team. “It will be truly the first in Europe to be planned for contactless bank card technology for payment across all transport modes.”

The project’s structure stands out as well. “The system will be delivered as a Design-Build-Operate-Maintain (DBOM) contract, where a vast majority of all activities involve a private sector partner”, said Witek Szpak, who led the project for the EBRD.

The EBRD – which happens to be headquartered in London – is financing the new system with a €54.5 million loan to BKK. Previously, the EBRD’s municipal team introduced BKK’s leadership to industry experts who had worked extensively on the Oyster card system in London.

BKK also modelled its new structure on London’s transport authority, TfL, taking over transport planning from all the different companies that had previously run transport in the capital.

Mr Nagy, a young professional with a lot of international experience, believes that a new system will boost the economy of Budapest, where some multinational companies are already transferring their service centres.

“High numbers of young, educated people are now employed with international businesses in accounting, research and development and other services,” said the Head of the EBRD office in Budapest, Elena Petrovska.”This is exactly the kind of workforce that needs public transport.”

After a long affair with the private car, Budapest is rediscovering its deep affection for public transport. “When the dam burst in 1989, we had a long period when a car was a symbol of freedom: I can go wherever I want, I am not forced to use a public service,” said Mr Nagy.

“A quarter of a century ago, the use of public transport in Budapest was around 80 per cent. Now it is below 60 per cent. But this, in comparison with some developed cities, is still extremely high.

The new fare collection will boost these numbers further, allowing travellers to interchange between metro, buses, trolleybuses and tramways, unlike today where a separate ticket has to be purchased for each branch.

“It will save the city money by boosting system revenues and lower the city’s carbon footprint through shift from cars to public transport,” said Matthew Jordan-Tank, a Senior Transport Specialist for the EBRD. “These kinds of projects have high economic value, and we hope to see many more of them.”

Such a complex system takes time to change. The gleaming passenger gates in the Corvin-negyed station will be taken down in a couple of months. They are a test, to see how passengers react to them and to measure the performance of gates from different manufacturers.

The EBRD-financed new automated fare collection system will take about four years to come on stream. Mr Nagy has high hopes for that day.

“If you say “Oyster”, everybody who has been to London knows that it is a symbol of public transport there, as much as the red bus, and that it’s reliable,” he said. “Our goal is nothing less.”