János Lázár, the Minister of the Prime Minister’s Office described the case of the metro line 4 project as a textbook example of fraud on the basis of the report of the European Anti-Fraud Office (OLAF) on the case.

The Minister pointed out in an interview given to the programme European Time of Kossuth Rádió which was broadcast on Sunday morning: some HUF 380 billion has been disbursed to date out of the metro project budget of HUF 430-450 billion, and the closing of the project is ongoing also at present as Hungarian grants are featured in the budget every year. A further sum of HUF 20 billion should be paid from the central budget to Budapest, however, the payment of this sum will be suspended. As long as the OLAF investigation is not fully closed, and until the responsibility involved is established beyond doubt, according to the legislation on state finances, “Hungary cannot hand over the taxpayers’ money”, given that “a multitude of criminal practices” may have been committed, he explained.

He reiterated that the Prime Minister’s Office has instituted an irregularity procedure, the purpose of which is to establish whether any instances of fraud were committed in respect of the grants provided by the Hungarian State. “It is to be presumed that instances of fraud were committed” as the OLAF report indicates: there was fraud not only in respect of the EU funds, but also in the case of the funds disbursed directly from the Hungarian state budget, Mr Lázár said, adding: if any of these irregularities is confirmed, the Government will have to ask Budapest to repay the funds.

According to the Minister, in simplified terms, what happened was that large foreign corporations – such as Siemens and Alstom – “colluded with the leadership of the Metropolitan Municipality and the various technical supervisors and designers, and embezzled money from Brussels and the Hungarian state budget”.

In many instances, “the method of embezzlement” was that the technical supervisors and designers served the interests of the contractors, rather than those of the principal, and “the principal generously signed for the souped-up sums”, he said.

The head of the Prime Minister’s Office took the view that “due to the activities of Gábor Demszky and his team”, the Metropolitan Municipality will find itself in a difficult situation because the EU will demand the repayment of money, and the Hungarian State, too, may follow suit.

He said: it is obvious that efforts will have to be made to seek the repayment of the sums in question from the foreign contractors, and this will be the duty of the Metropolitan Municipality.

He indicated at the same time: Prime Minister Viktor Orbán has instructed members of the Government to provide every assistance – both legal and financial – for Budapest in the interest of the resolution of the case.

According to Mr Lázár’s summary, the case presents a major problem not only on account of the theft and embezzlement involved, but also due to the obligations of repayment as the EU will not wait for the decision of the Hungarian prosecution service and courts. This will eventually cause the Metropolitan Municipality major financial losses, he said.

(MTI)