DECISION TO BE MADE SOON ON THE AID APPLICATION CONCERNING METRO 4 – CONTRACTS ARE CONCLUDED ACCORDING TO THE REGULATIONS OF THE PUBLIC PROCUREMENT LAW

Soon positive decision may be made about the aid application of metro 4 of the Cohesion Fund. Negotiations are still ongoing, there are not official numbers yet, however, based on the news previous comments were proved to be unsubstantial, as per which the project may not receive the aid or only a fraction of the required amount. The EU’s Committee responsible has asked more information in the process of decision-making on the aid application about contracts made before the project became a European project in order to decide whether they also satisfy the requirements of the EU competition law. If not, the amount may reduce the total amount of the aid. But the fact is that these contracts were also concluded according to the regulations of the public procurement law, in compliance with the national rules in force.
The financing of the new metro line is ensured without the support, it is a matter of common concern of the Hungarian government and the city of Budapest in 79 and 21% percentage. The aid application of the Cohesion Fund shall apply to the first section that costs 353 milliard Forints. Eligible project cost is 292 milliard Forints having regard to the fact that the aid applies only to the payments after 20th December 2006. In the aid application, the beneficiary city of Budapest has asked from the European Union maximum 224 milliard Forints.

Last August the documents were submitted by the National Development Agency to Brussels and audited by a Dutch expert team that was requested by the European Commission. As to the information supplied by the DBR earlier, in the last months the committee responsible of Brussels has posed additional questions in two cases. Firstly, requested the actualization of the feasibility study regarding the time passed since its provision, on the other hand, asked additional information in connection with contracts concluded at the beginning of the project in order to check the conformity with the EU’s competition law.

The mentioned contracts were concluded in 2004 and 2005 at that time when the European Union aid was not in the agenda. These contracts were concluded according to the Hungarian laws, in compliance with legality, according to the requirements of the public procurement law, with the knowledge and agreement of the Public procurement Board, and with the subsequent and multiple inspection of the Governmental Inspectional Office.

The updated tender submitted, and the accountability reports on the conformity of the public procurement process of the project were evaluated by the Committee and has noticed that those contracts in which the Hungarian parties did not apply the European Union directives may reduce the eligible amount, thereby the amount of aid requested. Intensive audit are made by NFÜ with the Committee responsible of Brussels according to the DBR regarding the details on the possibility of aid reduction thus, on the rate of aid.

Budapest, 14th May 2009
DBR Metro Project Directorate