Modernizing Hungary's Logistics Infrastructure

Ten years ago, in April 1989, Hungary was a member of the political and military structure of the Warsaw Pact. Troops of the Soviet Union were stationed on Hungarian soil. The Hungarian People's Army numbered around 160,000 personnel in peacetime. Hungarian military expenditures exceeded 3.5 percent of its gross domestic product (GDP), although this figure was not made public, of course. Hungary was ruled by a one-party Communist system and had an economy based on centralized planning.

Today, in 1999, 10 years after the fall of the Berlin Wall, Hungary is a full-fledged member of the North Atlantic Treaty Organization (NATO), and preparations for its entry into the European Union (EU) are advancing at full speed. Hungary joined NATO on 12 March 1999, along with the Czech Republic and Poland. For these three countries, the road to NATO membership has been long and sometimes filled with tears and blood. In the last half century, each nation has demonstrated its desire for freedom: Hungary in 1956, Czechoslovakia in 1968, and Poland in 1980.

As full members of NATO, Hungary, the Czech Republic, and Poland will gain new advantages, but they also will assume new responsibilities. Each must adopt reforms to meet the new challenges of NATO membership, including reform of operational logistics. The success of each nation's participation in peacekeeping, peacemaking, and humanitarian actions depends on the capabilities of its logistics system, both civilian and military. For Hungary, the logistics reforms needed for full participation in NATO are tied closely to its preparations for EU membership and its integration into the European economy. What follows is an examination of the logistics situation and emerging logistics changes in my country, Hungary.

Before we analyze the current logistics system of the Hungarian Home Defence Forces (HHDF), we must understand its roots. We also must touch on the close historical connections between the civilian and military sectors of Hungarian society.

In World War II, almost the entire infrastructure of the country was destroyed. Hungarian creativity restored many things quickly and with great diligence. However, because of the Communist social and economic policies of the postwar decades, development was possible only in a limited way. After the havoc of the war, the nations of Western Europe were fortunate to have the Marshall Plan to help them rebuild. Hungary did not have the advantages of participating in the Marshall Plan. Instead, in 1948, Hungary's Communist-controlled government, along with the other "new Soviet Allies," undertook an ambitious plan to industrialize the country's economy, but without regard for its resources and capabilities.

This map shows the 10 logistics service centers planned for development by the Hungarian Government. Note how roads and railways in Hungary radiate out from Budapest.

Under the Communist economic structure, a distribution system to meet the needs of the people was unimportant; the needs of the State were most important. The quality of life of the people did not play an important role in Government decisions. (Fortunately, the Hungarian standard of living was one of the highest in the Eastern Bloc). The nation's infrastructure, services, and technologies were not developed to benefit the people; instead, they were developed to support the needs of the State.

The interests of the Soviet Army, expressed through Hungary's civilian and military leaders, were paramount in Hungary. Hungarian telecommunications, transportation, medical services, electrical power, and water supply all served Soviet military needs first and foremost. An example of the power of the Soviet military was their request that the railways between Hungary and the Soviet Union not be "overdeveloped." (Today, these railways run into an independent Ukraine.) The general staff in Moscow said that it was good to have different railway gauges, since that would create a big mobility problem for NATO if it had to operate in Hungary. (The width between the rails in Hungary, like almost everywhere else in Europe, was 1,435 millimeters, but it was 1,520 millimeters in the Soviet Union.) This view prevailed over the need for good economic transportation links between the two countries. The Soviets thought that the cost of changing the wheels on every railcar moving across the border was acceptable if using different railway gauges would hinder the advance of NATO forces.

Hungary is divided into three regions by the rivers Danube and Tisza. From the Soviet military standpoint, because the Danube and Tisza had few bridges, they formed good natural barriers to invading NATO forces. In order to support any troops that might have to operate in the Western theaters, the Soviet Army stationed a number of engineering units on the eastern side of the rivers, where they would be ready to build temporary bridges quickly when needed. When the Soviets ordered, "Don't build any new bridges over the Danube and Tisza rivers," because that would give mobility advantages to NATO troops, Hungarian leaders couldn't build any new bridges. From the 1950's until the mid-1980's, Hungarian Government plans to build new bridges were stopped by Moscow. It was only in the mid-1980's that Hungary finally was able to build a new bridge over the Danube. In these ways, the demands of supporting the Soviet military hindered the development of Hungary's infrastructure.

Under orders from Moscow, Hungary prepared to host a massive army. Despite what the Hungarian revolt in 1956 showed Moscow (perhaps that they could not continue to build Soviet-style Communism in Hungary), the orders continued to flow. Hungarian leaders (both civilian and military) executed those orders, but not quite as well, or as faithfully, as Moscow intended.

In the operational plans of that time, the role of Hungarian forces, as the southern wing of the Warsaw Pact, was to occupy the northern part of Italy by way of Austria. As an operational theater, Hungary played a secondary role by acting like a buffer zone for the Soviet Union and supporting the deployment of Soviet land forces to the west.

The buffer military role that the Soviet Union forced on Hungary, along with Hungary's Communist economic system and its inherited radial transportation system (roads and railways radiate out from Budapest toward the borders and do not extend to all areas of the country), were the main reasons for the inadequate state of Hungary's civilian and military infrastructure in the early 1990's. Fortunately, this "poor" infrastructure is one of the most developed in Eastern Europe. (See map on page 45.)

In Hungary today, there are 35 to 40 military strategic storage warehouses and maintenance facilities. They are much smaller than a normal depot, and they usually are located in the middle of nowhere—far from a railway junction or main road crossing, far from towns, and far from the eyes of outsiders. They never have been civilian facilities and have not worked with civilians. They can be characterized as part of a ponderous and unaffordable system. These facilities are located mainly east of the Danube, in a northeast-to-southwest corridor.

Whatever the scale of operational plans, the warehouses and other installations were strategic, high-level resources under the Warsaw Pact and thus were under central control. Every service branch (clothing, cargo, fuel, transportation, medical, armor, weapon, vehicle, engineering, ammunition, aviation material, chemical, map, communication, and culture)—15 to 17 different material supply and maintenance services in all—had its own "central resources." That meant items were stocked not by material class but by the branch responsible for those items. This is still the case.

It is for these reasons that the HHDF today does not yet have a common stockline system, a material class system, a hazardous materials identification system, a priority code system, or a trustworthy item identification system. On top of all that, the equipment and weapon systems used by the HHDF are of many types and models. For example, there are 84 different versions of one vehicle type in use.

In the past, soldiers' hands were substituted for forklifts and cranes as the cheapest labor option. The inventory system was manual, without an item identification system that users could trust. Sometimes, when someone retired, the remaining personnel did not know how many items were held, what they were, and where they were held. Today, the warehouses very often are unequipped or poorly equipped buildings of older construction that lack modern technology.

In the HHDF, the Army traditionally has been allotted more resources than the Air Force. That is why our airfields also had poor facilities. Only a few of them—the ones used by aircraft everyday—had slightly better conditions. However, their facilities never were used for civilian purposes because they were located far away from civilians.

When Russian troops left Hungary between 1989 and 1991, the Federal Government of Hungary became the owner of the Soviet-used infrastructure. The poor condition and inconvenient locations of these facilities meant that they were largely useless for civilian purposes. Only a few found a new owner, usually for much less than the asking price. Today, you can find little villages in Hungary that have their own airfields, but those airfields have no air traffic—only a lot of environmental pollution problems. The reduction in size of the HHDF (from 160,000 troops in 1989 to 50,000 in 1998) has only exacerbated the decline of the military infrastructure. Most of that infrastructure remains empty and unused.

As a consequence of half a century under a Communist system, Hungary's transport and communication systems, water management, and other infrastructure have fallen behind those of Western Europe. However, the change of our political system and our transition to a market economy, which started with the democratic elections of 1990, opened new possibilities, including infrastructure development.

Half of every dollar investment that has come to the former Eastern Bloc in recent years has come to Hungary. These new investments cannot succeed without adequate infrastructure, so the biggest item in the state budget for the last 10 years (and for the next 10 years, too) has been the development of the infrastructure in Hungary. Public transport, railway and combined transportation, domestic water navigation, and goods transportation will be organized in an integrated logistics system.

The emphasis on infrastructure development reflects more than a general desire for economic growth. It also addresses a specific national goal: Hungary wishes to become a full member of the EU as well as NATO. For this reason, the civilian sector of Hungary—both the legal system and the infrastructure—follows EU guidelines while implementing fundamental changes. The main objective of the logistics development program is to build a logistics system meeting the most advanced European standards that fulfills all market needs.

A Hungarian convoy bound for the SFOR in Bosnia travels on a Hungarian road.

To promote Hungary's entry into the EU, the national transport infrastructure needs to link Hungary more closely with international transport systems while also supporting the growth of a fledgling economy. If Hungary is to continue on its upward economic trend, it needs a highly developed transport infrastructure and a restructured industrial base to ensure integration into international trade and commerce. Government transport policy emphasizes the importance of ensuring that Hungary meets the requirements of transit by providing higher quality services. The Government also recognizes the increasing political importance of improving the national infrastructure to link Hungary more closely with the economy of the EU. The aim is to set up a modern logistics system that can supply the logistics needs of a geographical area with a good quality of service for the 21st century.

This Russian-made AN62 transport is only one example of the legacy of former Soviet material and installations inherited by the Hungarian Home Defence Forces at the end of the Cold War.

In the last 10 years, the Hungarian civilian sector has changed very quickly. The modernization of civilian life has been going much faster than military modernization. There are many reasons for this, but the main one has been the need to respond to the requirements of the free market.

The successful privatization of industry, banking, tourism, and the small and middle sectors of the economy has advanced significantly. Most importantly, the mentality of the people has changed quickly and thoroughly. Despite operating with a "poor" infrastructure, reforms in law and administration have created the basis for the recent economic progress of Hungary.

The infrastructure programs of the turn of the millennium focus on the intensive development of the public road network, paying special attention to the construction of sections of main roads that bypass populated areas and to the maintenance of existing roads. Despite the advanced age of railway tracks, vehicles, and operational equipment, modernization of transport has developed at a spectacular rate. Apart from airline and railway transport, which traditionally have used electronic systems, modern equipment is being used to an increasing extent in Hungarian domestic water and public road transport as well.

The main components of infrastructure projects will be financed primarily from the state budget. This means that the external infrastructure (public utilities and rail and road connections) will be the property of the public utility companies that will operate the facilities.

From the beginning of Hungary's economic transition through the second half of 1998, the domestic motorway and highway network increased by 38 percent. The role of public companies in transport has been reduced significantly, and the transportation of goods on public roads now is almost entirely privatized. The businesses performing scheduled passenger transportation on public roads are owned entirely or mainly by the Government or local councils. The public road management and public utility companies of the counties, which maintain and operate the national network of public roads, are small or medium-sized companies, which, to an increasing extent, operate on a tender basis.

In spite of increased use of public roads, the ratio of railway transportation to all modes of transport is twice the EU average, both in passenger and goods transportation. Coach traffic, including city bus transportation, also is above the EU average. The Government departments strive to provide transportation methods and technologies that are less threatening to the environment. To pave the way for Hungary's integration with the rest of Europe, Hungarian transport policy places special emphasis on protecting both the human and natural environments. Partly as a result of an increased awareness of environmental concerns, transportation by rail today accounts for 35 percent of freight transportation.

Because of the emphasis on infrastructure development, the reform of the HHDF has involved more reduction than modernization. In the state budget, the HHDF received less than 1.4 percent of the GDP in 1997. This was less than what was needed, so the budget will be increased by 0.1 percent of GDP each year in order to reach 1.8 percent of GDP by the year 2001.

Ten years ago, every Federal department had its own military special section, where the military could support its own requests for things that the civilians had to build into their plans. For example, if the Ministry of Transportation or the Ministry of Industry wanted to develop a project, or change something in law or policy, they had to ask the opinion of the "special" military section. They had to compromise with the requests of the military. The best result was multipurpose use projects that supported both civilian and military purposes.

At the beginning of the 1990's, as a result of antimilitary feeling, most of those special sections were reduced. The idea of multipurpose use projects was forgotten. The absence of military sections, together with reductions in the military budget, meant that the Ministry of Defence did not determine its priorities for incorporation into new infrastructure development projects.

Recent civilian projects include two new bridges across the Danube, a (half) circle highway ring around Budapest, a brand new international airport terminal in Budapest, a few hundred kilometers of brand new highways, and hundreds of kilometers of railway and road modernization. All were developed within the new EU norms. However, sometimes the results of this infrastructure development did not enhance Hungary's military capability within NATO. For example, the capacity of the bridges of the highway ring around Budapest cannot support a fully loaded military tank transporter.

Those projects are complete, but there are more underway, and there will be many more when consideration is given to EU infrastructure requirements.

The geographical location of Hungary is not the same as her geopolitical location. Hungary traditionally has been in the heart of Europe, but today it is on NATO's forward edge, and tomorrow it could be the EU's border. Hungary is in the center of the flow of trade and transportation across Europe.

From the point of view of the EU, this means that Hungary will be the land border for trade between the EU countries of Western Europe and the nations of Eastern Europe (and beyond them the countries of Asia as well). If Hungary joins the EU in the near future, as expected, its membership will increase the need for high-value services for producers, distributors, and consumers, operators of services, and transportation companies.

This future as the EU border, together with the new quality of logistics in industry, will require a new distribution system. In 1993, after analyzing future transportation requirements in conjunction with future local logistics needs, the Hungarian Cabinet approved the concept of setting up a network of logistics centers to support the development of the national economy. The German Government helped to prepare those projects, which will result in a modern logistics service support system (infrastructure, carriage, manpower, and technology) in the different areas of Hungary.

This type of logistics center can be found in Western Europe, North America, and the Far East, usually where different modes of transportation meet each other. Such centers are the result of the technological revolution developed since the 1960's. In the 1980's, when competing for customers in the international marketplace intensified and delivery times became critical, industry started to use integrated logistics service centers to create service bases closer to markets. In this way, industry is better able to act to meet the changing demands of customers. The "just in time" method of distribution, made possible by new computer technologies, gives these logistics centers a big lead in international competition. Today, cities such as Rotterdam, London, Paris, New York, Bologna, and Bremerhaven, with their intermodal logistics service complexes, are not only consumer logistics centers and production centers; they also serve military users, supporting their deployments or their daily peacetime logistics needs.

The Hungarian engineering battalion in Bosnia has built 22 bridges. Hungary has partcipated in the IFOR and SFOR missions—a harbinger of the future.

The Hungarian concept is for a combined transport network of up to 10 logistics centers, of which Budapest, Z�hony, and Sopron will be the most important ones. (See map on page 45.) The Sopron terminal already is well known to international freight traffickers. The Z�hony and Budapest terminals, each lying on one of the busiest transit routes in Europe, have attracted considerable interest. In designing these logistics centers, experts have taken into account domestic and international freight traffic data and economic indicators and forecasts, while planners have considered international experience, regional development plans, and the need to use the infrastructure to the fullest. A few of the logistics service centers, after they are joined to the EU infrastructure network, will assume the role of logistics land border gates between the EU and Eastern Europe.

The common NATO mobility standards are very high and are going to be higher. Of all NATO members, only Luxembourg and two of the newest members, the Czech Republic and Hungary, have no exit to the sea. However, all of the countries bordering Luxembourg are NATO members, and the Czech Republic can use the seaports of its NATO neighbors, Germany and Poland. Hungary does not border any member nation of NATO and thus is something of an "island country" within NATO. As a result, Hungary has higher mobility requirements than the other NATO members.

In Hungary, we are well aware that we still have a long way to go to achieve full interoperability with the rest of NATO. The HHDF already have joined NATO's joint defense planning system as an invited country. Accordingly, Hungary has made a medium-term political and military commitment, for the period from 1999 to 2003, to fully or partially accomplish 48 different target force goals.

These plans concentrate primarily on the areas that are the most important to Hungary's integration into NATO. They include language training; high-level command, control, and communications; host nation support; inclusion in NATO's integrated air defense system; preparation of reaction forces; and participation in NATO's defense intelligence information exchange.

The new requirements for host nation support, together with the new requirements for a deployment capability for Hungarian troops, mean a big challenge for the HHDF. Fortunately, Hungary has some experience in the area of host nation support. The NATO-led peace support operation in Bosnia has been proceeding for several years with Hungarian soldiers serving under a multinational command. At the same time, Danish, Finnish, Norwegian, Polish, Swedish, and U.S. soldiers carry out their tasks on Hungarian territory and receive host nation support from Hungary.

Three years ago, two logistics bases were set up in the southern part of Hungary to support the Implementation Force and Stabilization Force (IFOR and SFOR) troops deployed in Bosnia. One of them is an American logistics base at the Tasz�r military airfield. The other one, in P�cs, is a multinational logistics base supporting the North Multinational Brigade (composed of forces from Denmark, Finland, Norway, Poland, and Sweden).

Today Hungary has an engineering battalion in Bosnia, at Okucani. Supporting this unit of 400 soldiers, only 180 kilometers from Hungary, has required a big effort from all of the HHDF. In the course of the IFOR and SFOR operations, the Hungarian engineering contingent has carried out 200 tasks of different types. It has constructed 22 bridges and 65 kilometers of railroads and helped to reconstruct public main roads. In addition, it has carried out mine-clearing activities.

In the Kosovo crisis, Hungary provided additional host nation support, permitting her airports and airspace to support the airstrikes against Yugoslavia. Twenty-four F-18 Hornets and 3 A-10 Thunderbolts used the U.S. airbase at Tasz�r, and 20 KC-135 tankers airlifted to the Ferihegy 1 airport of Budapest to support the air attack. (These aircraft have returned to the United States.) Hungary also sent a medical team to Kosovo to protect refugees from epidemics and 350 troops to guard the Kosovo Force (KFOR) headquarters in Pristina.

At present, Hungary's infrastructure cannot always support the very high mobility requirements and the new tasks and missions facing the nation as a new NATO member. However, it is not necessary to build whole new infrastructure elements for the military because the civilian sector already has begun to develop solutions to its logistics infrastructure needs. What will help Hungary integrate into the EU also will help Hungary integrate into NATO.

Only three of the available civilian logistics service centers are able to provide for a very important military need, that of support to air movements as airports of debarkation and embarkation. They are Budapest, Sz�kesfeh�rv�r, and Szolnok, which incorporate civilian or military airfields. Every airfield needs some reconstruction and modernization for military use.

The benefits will be greater (and cheaper) if military improvements can be integrated with the civilian logistics development projects. As part of the official economic development program, the logistics centers (including the three with airports) will operate as industrial parks to promote the development of the national infrastructure. This complex program requires cooperation among different transportation modes and a sound transport policy based on harmonization. The Ministry of Defence needs to prepare contracts to use the capabilities of these centers to establish a modern, strategic central depot system that has modern computer technology support. There should be no more than 2 or 3 depots, which will permit the disposal of the 35 to 40 old bases and warehouses. The state will play an important role in developing infrastructure (both civilian and military) by providing funds for building up the external infrastructure linking the sites to public utilities.

Hungary's new military mobility requirements as a member of NATO require a new agile and trustworthy logistics infrastructure. Civilian logistics centers and systems are growing rapidly, but unless they include military requirements they will not be able to serve the nation successfully. As part of the NATO Security Investment Program (NSIP), and with the financial help and experience of our Allies, we intend to invest in big military projects. Under the NSIP program, we developed the requirements for three groups of projects to support interoperability with the other NATO members, in the areas of communications, air radar, and airports. They all are very complex and expensive projects, but they will determine the future capability of the HHDF and affect the future capabilities of the other NATO countries.

The idea of multipurpose systems has to be given a new chance, but sometimes we in Hungary are afraid to develop such systems. The first reason, as I mentioned earlier, is the "antimilitary" feeling that grew up in the last 10 years. The second is the lack of a history of military-civilian cooperation. Close cooperation with civilians presents a new challenge for the HHDF. How-ever, success in cooperation will be to the benefit of all NATO members. Eleven members of NATO also are full members of the EU, so they have an additional interest in seeing that Hungary develops the new multipurpose (civilian and military) infrastructure projects.

There are several important areas in which, now or very soon, we will have to develop our civilian logistics infrastructure. One of them is the transportation network. Here we are going to plan some brand new lines, including the new rail and road connection with Slovenia. There is presently no rail connection between the two countries. This connection is very important to give access to the nearest seaports, on the Adriatic Sea. It also is important to have a rail connection with the rest of NATO via Italy. Hungary already has experienced some military transportation problems from the lack of such a connection, when Austria did not let the HHDF move through her territory to a NATO exercise in Italy.

Another area is the development of the logistics serv-ice centers. The availability of airports of debarkation and embarkation, depots, and other installations will form a modern, 21st century logistics system. They can be bridgeheads of host nation support and provide the main strategic logistics resources of the HHDF to support missions far away from home, including aid in times of natural disasters.

The infrastructure being developed will reflect a strong linkage between the logistics needs of both the civilian and military sectors. That in turn will be based on the new strong spirit of cooperation. In Hungary, we are aware of our special geopolitical situation. Hungary has become the NATO member closest to Yugoslavia and the Balkans. For Hungary, this means both responsibility and opportunity: to contribute to the solution of conflicts through our historical experience. ALOG

Captain Imre Eszenyi is an instructor in the Logistics Department of Mikl�s Zrinyi National Defence University in Budapest, Hungary.

Modernizing Hungary's Logistics Infrastructure

by Captain Imre Eszenyi, Hungarian Army

As Hungary joins NATO and seeks admission to the European Union, one of its greatest challenges is upgrading its logistics infrastructure to meet Western European standards.