Jávor: Highest levels should be held responsible for E.ON debacle

August 14, 2014

Javor

Benedek Jávor, the Hungarian MEP who has initiated a case against the state’s purchase of E.ON’s gas divisions, told The Budapest Beacon on Wednesday that Hungary’s leadership should accept ultimate responsibility for the allegedly disadvantageous deal.

“As everybody was pointing to a higher level decision during the business process, I would say the final responsibility should be held at the highest level – but this is something that must be decided by the public prosecutor and the court,” asserted Jávor, who represents the Together-Dialogue for Hungary (E-PM) alliance in Brussels.

“Buying something for a price that is HUF 150-600 billion (USD 640.1 million – 2.56 billion) higher than the estimated value – and spending taxpayers’ money on it – is misappropriation or malpractice, in the legal sense. Misuse of public money must be investigated,” he said.

According to Jávor the data obtained by the investigative journalism website atlatszo.hu after an 18-month freedom of information court battle “clearly prove” that the deal was hugely disadvantageous for the state. “These documents show that the independent estimation of E.ON’s value was between minus HUF 360 billion and plus HUF 111 billion, due to the risks of the ‘take-or-pay’ contracts. This means that the price agreed was HUF 150-600 billion higher than the estimated real value.”

The MEP says that the newly accessible documents have only confirmed the suspicions he held from the outset. “I heavily criticized the nationalization of the gas branch of E.ON from the very beginning. We were absolutely convinced that the price of HUF 260 billion was far too high compared to the real value of the E.ON gas divisions. We insisted on the publication of all the valuation documents and calculations for the E.ON gas arm but the government refused.”

Jávor says he does not oppose nationalization of energy companies in theory but has always held misgivings about the rationale for shaking up Hungary’s existing deals.

“There are good arguments for the public ownership of strategic energy sector companies (however) our experiences with the free-market but strongly regulated gas sector have seemingly been good in the last couple of years. The country’s gas supply was solidly ensured and E.ON could agree on a relatively good price with the Russians, as they were negotiating for a vast overall amount, of which the Hungarian gas consumption was only a small part. Gas storage capacities were far enough for ensuring energy security in Hungary, and they were in good condition,” Jávor recalls, before concluding that “taking all this into consideration, the very rationality of the whole business is highly questionable.”

Noting that the numbers had been unknown until atlatszo.hu received the documents this week, Jávor says “they show that the decision-makers knew that they are making an outstandingly bad deal. This is also backed up by the fact that, according to the new documents, decision-makers at different levels had tried to deny responsibility, by requesting higher level decisions.”

http://atlatszo.hu/2014/08/13/akar-600-milliard-forint-veszteseget-okozhat-az-eon-foldgaz-nagykereskedo-megvasarlasa/