Hungarian gov't commits nearly HUF 600 bn for a new Danube bridge and a new 4-lane expressway

A bridge too far... from being cheap

According to one of the decrees, the government agrees to the implementation of the project "Construction of the Mohács Danube Bridge and related road network". The second point of the decree stipulates that this investment is exempted from the investment freeze, with the proviso that "the entry into force of the contract for the implementation of the investment must be such that the performance of the contract will only be required from 2025 onwards".

The contract for the constructino of the bridge was inked on 21 June with Duna Aszfalt, owned by László Szíjj, a billionaire businessman with close ties to Prime Minister Viktor Orbán's Fidesz party. The winning bid was for net HUF 294.96 billion, which translates into gross HUF 374 billion, and apparently the government has already earmarked the required budget for the project.

According to the decree,

for the years 2024-2031, the government has set the total commitment for the investment at HUF 389.3 billion.

According to the previous tender, the winner has a total of 50 months to complete the project. The works were divided into three phases: the construction of the connecting road network on the island side and the urban side, and the construction of the bridge itself.

The distribution of the funds are as follows:

• HUF 2 bn in 2024
• HUF 50 bn in 2025
• HUF 100 bn in 2026
• HUF 80 bn in 2027
• HUF 110 bn in 2028
• HUF 47.1 bn in2029
• HUF 100 million in 2030
• HUF 100 million in 2031.

A HUF 189 billion expressway

In another decision, the government said that it agrees with the implementation of the M49 motorway between Ököritófülpös and Csenger (including the Kocsord engineering site).

The construction of the M49 expressway is progressing according to plan, with the development of a 28.15-kilometre four-lane road between Mátészalka and Ököritófülpös.

The same conditionality applies to this project: the project is exempt from the investment freeze, on condition that the Hungarian state will start paying only in 2025.

For the road development projects for the years 2024-2028, the level of commitment is set at a total of HUF 189 752 360 548, the decision states.

The distribution of the funding is as follows:

• HUF 15.3 bn in 2025
• HUF 70.1 bn in 2026
• HUF 80 bn in 2027
• HUF 23.5 in 2028.

The results of the tender for the new section of the M49 were announced in July this year, and the winner was Duna Aszfalt, as in the case for the Danube Bridge, and as in the case for the first section of the M49 motorway.

According to the tender documents, the winning company will be responsible for the construction of a 17.6 km long 2×2 lane expressway with 3 separate and 4 roundabout sub-nodes, 11 structures, a double axle weighbridge and a road border crossing, as well as the construction of the necessary utilities and the associated engineering works in Kocsord. The duration of the works is 34 months and the contract cannot be extended.

This means that the new section of the M49 will cost around 11 billion forints per kilometre.

A few weeks ago, Magyar Építők reported that asphalt is already being laid in the Duna Aszfalt project, which is the section from the M3 motorway towards Satu Mare, Romania. It will create a 28.15-kilometre four-lane road between Mátészalka and Ököritófülpös.

How much is it then?

In total, the two projects will cost the Hungarian state and budget (i.e. taxpayer) huf 578 billion over the next five years.

It is also worth recalling that over the past two years the government has postponed a series of public investments, most recently this year to the tune of HUF 675 billion. Now it seems that the government has found a way to finance these gigantic construction investments in the medium term.

It is particularly interesting that, based on the above schedule, these two projects will mean an extra HUF 65.3 billion in expenditure for the budget in 2025, at a time when all fiscal experts are concerned about how the government can meet its deficit target in 2025 and how much of an adjustment it will have to make next year, which it has already started to by way of increasing taxes.

The state is also planning to buy office buildings for HUF 600 billion, which are realistically worth HUF 425 billion, according to real estate appraisers surveyed by Válasz Online.

The state would give

• HUF 244 billion for the Zugló City Centre on Bosnyák Square, with an estimated market price of HUF 170-175 billion;
• HUF 100 bn for Dürer Park offices, which could be worth HUF 55-60 billion instead;
• HUF 255 for the office buildings of BudaPart, which could be worth HUF 185-190 billion instead.

So, according to Válasz Online, the government is paying developers 40% more than the market price. Earlier, it emerged that the office buildings were linked to István Garancsi, who has a good relationship with PM Orbán, and the prime minister's son-in-law, István Tiborcz.

Cover photo: Speciálterv