Hungary

Under existing practices in Hungary, local municipalities are involved largely in financing the development of waste management facilities, while in other areas involving environmental investment, such as air quality protection, private business dominates. Co-financing by central government is available in most such cases. The government's environmental policy is based on a strong partnership between the public and private sectors, despite the fact that the latter takes on the greater burden of investment.

Public private partnerships seem to be an ideal scheme to fulfil investment needs and bring private sector knowledge and experience into the provision of municipal services. Existing pilot projects in

Hungary, such as development of the M6 road in transport sector, provide the experience necessary to frame PPP policy at the state level.

However, Hungarian legislation omits any input from companies (that is, from those who are the main investors in PPP projects); meanwhile, in business life such legislation has already been introduced. A PPP in Hungary should result in a company in which the state or the local municipality owns more than 50 per cent of the shares, yet the investor's (private partner's) position is assured by management rights and exclusivity over utilization.

With many issues arising from the transformation of Hungary's legal system and the substantial investment that this entrails, it is imperative that central government develop a high-quality PPP framework. Rapid changes in legislation and an effective enforcement system will ensure that the prosperous climate essential for profitable and secure investment is implemented.