“I am very surprised that you claim that there is a project funded by the European Union, in which anybody from my family participated as contractor, main contractor or subcontractor.”
This is what Hungarian Prime Minister Viktor Orbán told Direkt36 in June 2017, on a press conference held in Brussels, after having been confronted with the fact that his family receives public money from state projects. The PM’s answers suggested that he thought – as opposed to his statements from years ago – if his family’s companies participate in public constructions only as suppliers of building materials, it is not a problem.
However, after a refused freedom of information (FOI) request and a four-month-long trial, Direkt36 received documents proving that one company of the Orbán family did participate as a subcontractor in a huge railway reconstruction project on the Southern side of “Hungary’s sea,” the Lake Balaton. The company called Nehéz Kő Ltd. receives nearly HUF300 million (€970 thousand) from the project.
In Hungarian construction projects, companies may participate at three different levels. Public tenders are won by main contractors, or consortia of several main contractors, which are responsible for the full implementation of the projects. These main contractors can hire so-called subcontractors for the executions of specific parts of the projects. Similar to main- and subcontractors, those companies that supply building materials for the construction also receive public money – on the market, these companies are called suppliers.
Public information is only published about the main-and subcontractors of state projects. However, companies of the Orbán family participated in state projects at a lower level, as suppliers, that is why their involvement could remain hidden. In recent months, Direkt36 has found several evidences of the companies’ involvement in state projects, but only as suppliers of building materials. Now documents of the Lake Balaton railway project reveal that at least in one case, the Orbán family received public money also as a subcontractor.
Last June, Viktor Orbán told Direkt36 that he would “check out” whether his family members really participate in state projects – before the publication of our article, we asked Orbán whether he did so since the press conference. We also told him that the documents we acquired prove that his family’s company is a subcontractor of a state project, and asked whether he thinks this is problematic, but the PM did not answer our questions.
Subcontractors at Lake Balaton: the Orbáns and the Mészáros
In spite of the fact that back in 2001, the Orbán explicitly asked his father to stay away from state funded projects, in a series of articles we have revealed that the recently outstanding performance of the businesses of the prime minister’s family has been helped by their involvement in numerous state projects, mainly financed by the European Union.
Companies owned by Orbán’s father and brothers participated in public projects including motorway and sewerage system constructions. In an article published in November, we revealed that an Orbán-company also worked on the railway construction at Lake Balaton.
The renovation of a 53-kilometer-long railway line on the Southern side of Lake Balaton started in 2016 and planned be completed this autumn. The final budget of the investment is HUF 72.4 billion (€232 million), HUF 16.9 billion (€54 million) higher than originally estimated. 79 percent of the project is financed from European Union funds. The public procurement was won by a consortium of three companies: R-Kord Építőipari Ltd., V-Híd Ltd. and Swietelsky Vasúttechnika Ltd. R-Kord is owned by Lőrinc Mészáros, the Prime Minister’s friend, whose wealth increased massively over recent years. V-Híd is majority owned by István Sárváry, former deputy state secretary. Swietelsky Vasúttechnika is a Hungarian subsidiary of the Austria-based Swietelsky Group, a frequent winner of public tenders in Hungary.
At the site of the reconstruction, several workers said that some of the building materials used for the project came from a mining company, whose majority shareholder is the PM’s father Győző Orbán. The main contractors and state institutions, however, refused to answer our questions about the origins of the building materials.
This is why we launched a lawsuit in August against the state-owned National Infrastructure Development Company (NIF), acting as the main developer of road and railway construction projects, with the help of the Hungarian Civil Liberties Union and with the pro bono support of a lawyer, Zsolt Szegedi. In December, the court of first instance ruled that NIF has to provide data both on subcontractors and suppliers, free of charge.
Almost HUF300 million for the PM’s father
NIF has not yet named the suppliers of the projects, but it did send us data about the subcontractors. The main contractors hired a total of 134 subcontractors, including Nehéz Kő Ltd, which produced the most impressive growth in recent years among all companies owned by the Orbán family. The company was founded in 2004, and it had been co-owned for years by the PM’s father and two younger brothers. Since October 2017, the company is solely owned by the PM’s father, Győző Orbán. According to the company’s website, it purchased a fleet of trucks in 2012, which allows if to transport the building materials of Dolomit Ltd, a mining company majority owned by Győző Orbán.
Until 2017 October, the 134 subcontractors became entitled for a total of HUF21.6 billion (€69.7 million) of payments from the project budget. Mészáros and Mészáros Ltd. – owned by Lőrinc Mészáros, the Prime Minister’s friend – became entitled for the highest amount (HUF2.64 billion, €8.5 million), followed by Híd Tám Ltd, owned by the brother of Lőrinc Mészáros, János Mészáros (HUF 1.67 billion, €5.4 million). Among 134 subcontractors, Nehéz Kő Ltd. receives the 18th highest amount, HUF298 million (€962 thousand) in total.
Nehéz Kő Ltd. became entitled for payments in last March, April, May and October. The documents sent by NIF do not detail what services the company provided for the project, and neither NIF, the main contractors, nor Nehéz Kő answered our request to provide more details about the company’s involvement in the project. Apart from Nehéz Kő Ltd, 14 other freight companies participated in the project as subcontractors, but neither of them became entitled for higher payment than the Orbán company.
For the Hungarian company data we used the services of Opten.