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construction contracts, and none of the three qualified Hungarian construction firms in
possession of the appropriate equipment to carry out such large-scale road works were
contacted by NA Rt. (Pócza 2000). Instead, two Hungarian construction companies who
had never before been involved in motorway construction (and who were characterized as
politically close to the governing Fidesz party in the national press, see e.g. Lovas 2000),
Vegyépszer Rt. and Betonút Rt., were awarded both the first contract for the M3 and
numerous subsequent ones.
The circumstances of this contracting and funds
disbursement process were highly dubious from the start, and even included sub-contracts
with quarries owned by the family of the Prime Minister (ibid). 28
Under these
circumstances, EU Commission representatives made it clear to the Hungarian
government that they could not realistically expect to receive any ISPA co-financing for
their motorway construction program. As we will see, ISPA grant funding in Hungary
was therefore heavily concentrated in the rail sector during the first two years.
28 By the time that the Orbán government was ousted in the May 2002 elections, none of the motorways in
the above listed table had been completed, and for many of them, work in fact had not even begun. In the
end, allegations of corruption and incompetence related to the construction program were a significant
factor in the 2002 elections. The opposition especially criticized the fact that financing the expressways via
the Hungarian Development Bank (MFP) and not through the state budget meant that there was no
parliamentary control over these expenses. In the weeks following the election, the new center-left socialdemocratic
government formed by the MSZP and the SZDSZ and headed by Péter Medgyessy acted
quickly. By late June 2002, the entire management and board of directors of NA Rt. had been exchanged,
and the vast majority of the incoming representatives are now also members of the two governing parties.
Similar measures were taken at the Hungarian Development Bank. In late July, the new government then
even annulled a previous July 11 invitation-only tender (in which Vegyépszer Rt. had not been invited to
take part) and promised open tenders for all subsequent contracts. In early August, the new CEO of the
Hungarian Development Bank told the Hungarian press that the repayments of the credits taken out for the
expressway construction projects might cost Hungarian taxpayers as much as HUF 180 billion (over € 730
million) for want of cover on the part of the Hungarian Development Bank.