The Hungarian PM’s son-in-law stepped back from public money. But his long-time business partner moved closer to it


When István Tiborcz, the son-in-law of Hungary’s prime minister, sold his shares in Elios Innovatív the Hungarian and EU authorities were already investigating how the company was awarded so many public contracts. Tiborcz did not explain publicly his decision but Napi Gazdaság, a government-leaning daily, reported that he took this step because he got fed up of the numerous attacks against him and his business.

Tiborcz’s companies indeed have not participated in any public tenders since then but people with ties to him have not stayed away from this sector. The company of a businessman called Endre Hamar, who was one of his closest associates for years, has been awarded several important state contract recently.

Last summer, Eupro Ltd, one of Hamar’s companies, was one of the first beneficiaries of the new European Union grant cycle. The company gets 141 million forints (450 thousand euros) to assist the government in spreading flexible employment practices. A few months later, the company was also awarded a public contract worth 12 million forints (38 thousand euros) for conducting quality control in procurements. Finally, last December Eupro won a tender from the Central Smart Metering (KOM) Plc., a new Hungarian state company.

Even though the value of this last contract is relatively low – 20 million forints (63 thousand euros) – the task is significant. The job will give Eupro important insight into a program worth of 6.5 billion forints (20.6 million euros).

During the next few years Central Smart Metering (KOM) Plc., is going to spend these billions of forints on a pilot project involving at least ten thousand households in Hungary. In this program, KOM is going to swap the current electronic, gas and water meters to modern measurement technology that makes consumption measurement easier and more economical. After four years of preparation, the first public tenders for the project were announced in November 2015.

Winners of the largest tenders have not yet been announced, but Endre Hamar’s company, Eupro, has already been chosen for consultancy and project preparation jobs in the pilot program.

From the catering industry to telecommunication

Tiborcz and Hamar did not answer to our questions concerning their relationship, but according to the information found on the website of Lajos Nagy High School of the Cistercian Order in Pécs – a town in South-Western Hungary – they both studied there around the same time. There is a two-year age gap between the two so they were not in the same grade and former schoolmates declined to disclose any information concerning whether Hamar and Tiborcz knew each other back then.

It is clear, however, that they have become close business associates as adults.

Hamar, 31, has a degree in law, started his business career in 2011, when together with Tiborcz they launched Hamar&Tiborcz Legal and Economic Consulting Ltd. Hamar left the consultancy company in 2013, but business links between the two remained.

One of these concerned Elios, the company known for winning tenders for modernizing public lighting with LED-lamps. Hamar sold his shares in the company to Tiborcz just as later he sold Tiborcz a construction company that was involved in building the University of Public Service. Also, in a beverage trade company they followed each other as CEO.

Recently, their names appeared in connection with the castle of Tura, which was sold to a mysterious, newly founded company in November 2015. Hamar’s law office provided the paperwork for the property deal, and Tiborcz personally paid the fee for the foundation of the company that bought the castle, reported, citing court records.

Hamar, through one of his companies, Sistrade, also played an important role in Elios’ easy wins of so many public lighting modernization projects. As we reported in a previous article, Sistrade prepared the lighting modernization program in at least ten towns where later Elios won the public tender to complete the project. The project preparation had important consequences, because the preparatory documents decided the budget and the type of lamps that had to be installed by the winning company.

Sistrade was not the only Hamar-company involved in lighting modernization. One of his other companies, Green Investment Ltd., was the co-owner of Elios at the times. According to the Hungarian procurement laws, this means conflict of interest. After an article by pointed this out, LMP, the Hungarian Green party, filed a criminal complaint with the police. The subsequent investigation is still ongoing.

Eupro, Hamar’s company hired for the smart meter program, was also involved in some LED-lamp projects along with Elios and Sistrade. Eupro was established in 2005 as a catering business, but in 2013 it switched to project management. Beside two LED-lamp projects, Eupro mainly worked in EU-funded water management projects. The company does not have any experience in the field of telecommunication or electricity.

Eupro was chosen for the smart meter project in a closed bidding process which is allowed under certain amount. KOM Plc., the state company in charge of the pilot program, invited three companies for the procurement. Besides Eupro there was Tender Network, which also prepared street lighting projects later won by Elios and worked together with Hamar’s Sistrade.

The third company invited for the bidding was MSB Development Consulting, owned by Peter Madár who, as revealed, is the cousin of Erik Bánki, a Fidesz MP. Madár told Direkt36 that his company was not invited to closed public procurements because of this family connection, but because of its experience and competence.

KOM Plc. claimed that the procurement complied with the rules but did not disclose why these three companies were invited to bid. Eupro did not respond to our inquiries.

What is smart metering?

Smart electronic, gas and water meters are called smart because they are connected to a network and constantly send consumption data to service providers, therefore consumers do not have to report their consumption monthly and the company does not need to send out inspectors to gather data. Consumers can also check their energy consumption trends. In countries where energy prices are not fixed, smart meters can help saving money because consumers can calculate when it is cheaper to use machines with high energy consumption. Smart meters are also important to households using solar panels or other alternative energy sources, because the meters can track how much energy the alternative sources add to the network.

In Hungary, energy prices are currently fixed, so smart meters will only ease invoicing and consumption tracking. Energy providers Elmű, Émász and E-on launched the first smart metering pilot project in 2012, swapping a few thousand old meters to smart ones in their service area. The aim of the pilot project was to gain technological experience and look into possibilities of national expansion.

In 2011, the Hungarian government also decided to launch a pilot project. They asked financial support from the European Commission which was granted in 2013. KOM Plc. was founded to execute the governmental pilot project and spend the 22.4 million euro subsidy. As part of the project KOM is going to swap electronic, gas and water meters in tens of thousands of households, and set up the communication system between the smart meters and the energy providers.

The public procurement procedures for the largest parts of this project – supplying the smart meters and setting up the communication network – were already completed in November 2015 but KOM Plc. will only announce the winners in the upcoming months. Until then they are not giving out any information about the winners, KOM told Direkt36.

For information on companies, we used the databases of Ceginfo and Opten.