Orbán-Linked Oligarchs Profit €38 Billion in State Motorway Concession
The Hungarian government’s decision to outsource a significant portion of the highway network has raised eyebrows and concerns among taxpayers. The motorway concession, which cost taxpayers HUF 15-17 thousand billion, equivalent to around EUR 38.4 billion, was awarded to a consortium of private equity funds owned by László Szíjj and Lőrinc Mészáros, two well-known Hungarian businessmen with close ties to the government.
The details of the motorway concession contract, which were obtained by Free Europe after a lengthy legal battle with the National Concession Office (NKOI), revealed the owners of the private equity funds and the amount to which the concession company will be entitled – information that was previously undisclosed.
The winning consortium of the tender established in 2021 consists of seven private equity funds, with László Szíjj and Lőrinc Mészáros as owners of four and three funds, respectively. Both individuals have strong connections to the government and Prime Minister Viktor Orbán.
The recently obtained contract also sheds light on the financial aspect of the concession. It was revealed that the government’s 35-year motorway concession deal will cost Hungarian taxpayers even more than initially estimated. Previously, Transparency International had received calculations prepared by the government, indicating that a total of 12,600 billion forints (32.2 billion euros) would go to the winning firm. However, the actual cost of the concession is now estimated to be a staggering HUF 15 thousand billion (EUR 38.4 billion), potentially rising to 17 thousand billion forints (44.2 billion euros) with additional sections included.
The contract outlines that the concession company, Hungarian Concession Infrastructure Development Ltd (MKIF), will manage 1,666 kilometers of roads, with the possibility of an additional 381 kilometers being added. The construction and operation costs specified in the contract are substantial, and there are provisions for potential adjustments based on inflation targets set by the National Bank of Hungary.
The motorway concession scheme has raised concerns about possible corruption and lack of transparency. The government’s plan to spend billions on new investments without the need for public procurement procedures has raised red flags. Furthermore, the involvement of two major contractors closely tied to the government in the concession has sparked controversy.
The European Commission has initiated infringement procedures against Hungary for potential violations of EU regulations in the motorway concession agreements. Transparency International’s complaint highlighted issues such as lack of transparency in contract value projections and inadequate transfer of operational risk.
Overall, the motorway concession in Hungary has attracted attention from both taxpayers and EU authorities, raising questions about accountability, transparency, and potential conflicts of interest.
