The Heart of Budapest Programme under EU investigation
HUF1.8 billion fine for Budapest can be the financial punishment from EU due to incorrect procurement procedure in The Heart of Budapest Programme. The European construction inspectors of the supported development have complained about the conditions of the tender, because only a few, more precisely, one Hungarian company was able to meet them only, even at high prices.
6 March 2012
The European Commission is planning to collect a fine of HUF HUF900-900 million each project through the project companies of Municipality of District V. The reason is that the European Commission found out that public procurement was "quasi driven" concerning the Heart of Budapest Programme. Thanks to this urban project, new main street of District V between Kálvin tér and Szabadság tér develped, for instance.
Quasi driven public procurment
The European inspectors of the Commission noticed that a net HUF1.2 billion worth at least- construction in historic environments - and with a net HUF300 million worth of decorative paving each(3 projects at least) references had to have (one decorative paving reference should have taken place in historic environment at least).
The inspectors were not surprised by the fact that because of the serious conditions, the group of Reneszánsz Zrt. and Bau Holding 2000 Zrt. named the Heart of Budapest Consortium made a bid. Due to lack of other competitive tenders, the only one tender accpeted at 10-15% higher price compared to the original tender price.
In Hungary, 40% of public procurements are one-role game and the winner selected from "competitive offers", so the competition was completely pointless. The EU have started investigations partially based on this aspect when auditors to revision of Hungary's support. The one-player game is not necessarily synonym of corruption, but the potenctial risk of corruption multiplied. Inspectors to select from carefully-highlighted tenders in advance where one-player games are marked with red. The most "colorful highlighted" projects are the New Main Street of District V, the Heart of Budapest Programme and restoration of Margaret Bridge. The developments has also been suspected, because even in calculations at Western European price standards, the constructions seem to be too expensive, this is the auditors' preliminary view at least. Even if they raised this aspect - when price control was not part of the inspection in October - and value for money ratio rarely in focus of their analysis due to many subjective elements.
Renewal the Inner City of Budapest
- ELTIS - Urban renewal project - The Heart of Budapest (Hungary)
- Best Practice: Historic City Center Renovation - Budapest
- National Development Agency - The Heart of Budapest Programme
Most popular news
Sign up for updates