Neither the Hungarian state nor Budapest City Council will pay back EU funds demanded by the European Commission’s Anti-Fraud Agency (OLAF) after it issued a report on abuses and irregularities regarding construction of the M4 metro line in Budapest, Magyar Nemzet reports.
The OLAF report on the M4, the biggest investment during Gábor Demszky’s four-term tenure as mayor of Budapest from 1990-2010 and which cost HUF 452 billion (USD 1.7 billion), was released in October 2016. According to the report, out of the HUF 181 billion (USD 682.91 million) of EU funds spent on M4, the spending of at least HUF 167 billion (USD 630 million) was irregular, stolen or unlawfully used. OLAF has demanded Hungary pay back HUF 59 billion (USD 222.6 million) to the European Commission.
“Over the course of the negotiation, try to achieve the smallest correction possible,” reads a letter acquired by Magyar Nemzet written by Budapest Mayor István Tarlós to Minister in Charge of the Prime Minister’s Office János Lázár.
Mayor Tarlós considers this penalty unacceptable as the contracts that were found problematic by OLAF were all – except one – concluded between 2004 and 2009, meaning that the current City Council cannot be held responsible.
According to Tarlós, OLAF also considered items that were removed from the project between 2009 and 2010. He said the report does not differentiate clearly between simple anomalies, fraud, corruption and serious abuses.
Lénárd Borbély, the Fidesz member of the work group investigating corruption connected to M4, concurred with Tarlós. According to Borbély, moral and legal responsibilities must be differentiated in the case. Borbély said that pre-2010 former mayor Demszky and one of his Socialist Party (MSZP) deputies had decided which companies Budapest Transport Company must use as contractors in M4 construction.
Currently there are two ongoing investigations into M4. The Central Detective Chief is investigating the acquisition of the subway cars while the National Bureau of Investigation is looking into the contracts that covered station and tunnel constructions.