VZCZCXRO6545
RR RUEHIK
DE RUEHUP #0017/01 0130849
ZNR UUUUU ZZH
R 130849Z JAN 10
FM AMEMBASSY BUDAPEST
TO RUEHC/SECSTATE WASHDC 4803
INFO RUCNMEM/EU MEMBER STATES COLLECTIVE

UNCLAS SECTION 01 OF 02 BUDAPEST 000017 
 
SIPDIS 
 
DEPT FOR EUR/CE JAMIE MOORE; USDOC FOR SILVIA SAVICH 
 
E.O. 12958: N/A 
TAGS: ECON ELAB EFIN HU
SUBJECT: HUNGARY: BUS DRIVERS' STRIKE IS ANOTHER STRIKE 
AGAINST AILING BUDAPEST TRANSPORT 
 
BUDAPEST 00000017  001.2 OF 002 
 
 
¶1. SUMMARY: After a week of sporadic "wildcat" strikes that 
made bus service unreliable, Budapest Transport Company (BKV) 
bus drivers officially went on strike January 12, after the 
company and union leadership failed to come to terms on a new 
collective bargaining agreement.  BKV garners little public 
sympathy and is in a weak negotiating position amidst a slew 
of corruption scandals exposing misuse of public funds.  As 
the parliamentary election season heats up before voting this 
spring, opposition party FIDESZ may try to make BKV's 
corruption scandals an election issue, yet bringing true 
reform to BKV will be challenging.  END SUMMARY. 
 
PORTRAIT OF A COMPANY IN DISARRAY 
--------------------------------- 
 
¶2. BKV is managed by the local city government and is 
responsible for providing almost all of Budapest's bus, tram, 
trolley, and metro services.  The company is under heavy debt 
and cannot operate without central government support.  A 
series of corruption scandals has exposed serious management 
problems at BKV and angered a public already frustrated over 
rising ticket prices: 
 
--BKV's former HR director, Eleonora Szilagyi Szalai, is 
currently under arrest and charged with fraud for illegally 
authorizing herself a highly disproportionate $500,000 
severance package last year.  Adding to the scandal, Szalai 
continued to work for the company even after receiving her 
severance. 
 
--Police investigations also revealed that several BKV 
employees who worked for less than one year received higher 
severance payments than 51 people who had worked for over 30 
years.  Some employees were "fired" a few days before 
becoming eligible for pension, thus making them eligible to 
receive severance payments.  In other cases, indefinite term 
contracts were treated as fixed term contracts so employees 
could be fired to receive severance, after which they were 
rehired. 
 
--On December 4, 2009, BKV's former legal director Gyorgy 
Sziebert was arrested in parking garage after accepting what 
police allege was a large bribe in connection with a 
contract.  On January 5, BKV fired IT Director Bela Fuzik, 
also suspected in a bribery case.  On January 8 police 
arrested Eva Horvath, a former mayoral spokesperson, and 
charged her with misuse of public funds for having received 
wages from BKV without performing any actual work. 
 
STRIKE 
------ 
 
¶3. The former collective bargaining agreement between the 
company and its unions expired on December 31.  The many 
corruption scandals at BKV have greatly undermined the 
company's credibility and ability to win concessions from its 
unionized labor force.  In late December, the unions 
announced a strike to begin on January 12, mostly affecting 
bus drivers.  Leading up to this date, in perhaps an effort 
to flex union muscle, drivers initiated a series of service 
disruptions that BKV leadership labeled an illegal "wildcat" 
strike.  On January 5, bus drivers left 270 vehicles parked 
in depots -- an abnormally high rate -- claiming they were in 
such disrepair they could not be safely operated.  The strike 
officially began January 12 and bus service was dramatically 
impacted, with many routes closed entirely.  Many tram lines 
were also closed as tram drivers opted to join the strike as 
well.  The strike's impact was partially mitigated by 
trolley-buses and metro services that continued operation. 
It is not yet clear how long the strike will last. 
 
 
GETTING TO WORK: INTIMATE ENCOUNTERS 
------------------------------------ 
 
¶4. During last week's "wildcat" strikes, as the buses arrived 
less frequently and full to the point of passengers being 
pressed up against the windshield, doors, and each other, it 
became increasingly common to hear the otherwise reserved 
Hungarians loudly complain: 
 
--On one tram line, a group of passengers, previously 
strangers to each other, commiserated over having to suffer 
through BKV's labor problems.  Referring to the severance pay 
scandal: "BKV spends money on everything except their drivers 
and keeping their buses running.  How many buses could they 
have repaired and how many salaries could they have raised 
with all that money they wasted?  And of course, if there is 
a strike, it will hurt us more than anyone.  We just want to 
get our kids to school and go towork.  The drivers should be 
 
BUDAPEST 00000017  002.2 OF 002 
 
 
demonstrating in front of Parliament, that's where the real 
problem is." 
 
--On one packed bus, even the bus driver got involved in the 
debate.  Pushing her way onto an especially crowded bus, one 
passenger complained, "I pay $55 for my monthly pass and I 
have a right to be on this bus.  BKV is a bunch of thieves. 
It's a scandal."  Referring to the upcoming parliamentary 
elections, she added, "After the April elections we're going 
to throw every last one of these corrupt socialists (the 
current MSZP government) out of power and vote FIDESZ in." 
Although the passenger was complaining to no one in 
particular, the bus driver responded to her over his glass 
partition: "If you think that the elections are going to 
change anything, you are completely mistaken."  The passenger 
responded, "BKV is a corrupt, criminal company, and I am 
being robbed to ride this bus.  This will all change after 
the elections."  Reaching the end of the route, the driver 
got in the last word: "I can promise you this, after the 
elections, absolutely nothing will change." 
 
¶5. COMMENT: Although the drivers' strike has not yet 
paralyzed the city, those who depend on bus lines have 
experienced the brunt of the impact and are frustrated. 
After a series of corruption scandals, BKV finds itself in a 
position of having little money to offer its unionized 
employees and little sympathy from the public for having 
wasted its money.  There is some sympathy for the bus 
drivers, but this may wear thin if the strike continues 
indefinitely and passengers are left out in the cold.  Over 
the election cycle the opposition FIDESZ party may try to 
make BKV a poster child for corruption in the current 
government.  Given the extent of BKV's troubles, however, the 
task of truly reforming the company may prove daunting. 
KOUNALAKIS