Válasz Online: All-time greatest property scam in Hungary involving Orbán cabinet and government-close businessmen unveiled
Válasz Online reported a week ago on the greatest property scam in Hungary in the last 35 years. However, learning more details, they said it was the biggest of all time. In a nutshell, the Hungarian government will buy office buildings for HUF 600 billion (EUR 1.52 billion) from government-close businessmen whose companies were the constructors of the buildings before. However, their market value is at least 40% less.
In an international comparison, the overpricing can reach 70%, Válasz Online wrote on 16 August. An approximate estimate of the overpricing is 40%. Who are the winners of the business if not the taxpayers who pay for it?
355,000 sqm of office building for EUR 1.52 billion
According to Válasz Online, the Hungarian government bought office buildings in three Budapest venues. They paid HUF 244 billion (EUR 620 million) for a Bosnyák Square office building complex. The Hungarian taxpayers will pay for another one at the Kopaszi Dam (EUR 650 million). Finally, the Orbán cabinet is paying HUF 100 billion (EUR 250 million) for a third office building at the Ajtósi Dürer sor, close to Budapest’s City Park.
All contracts were administered by Judit Pete, a Hungarian lawyer, who took the state assignments, and the law firm of Minister Márton Nagy’s sibling.
The Hungarian government decided about the transactions in secret. There were no public procurements or competition. One of the questions that arise is: what does the Hungarian state need 355 thousand sqm of office buildings for and why it is worth buying instead of renting it? Válasz Online suggests the purchase was in the interest of the Tiborcz-circle (the son-in-law of PM Orbán) instead of the Hungarian taxpayers.
A purchase on which taxpayers lose money
Válasz Online calculated the market value of the office buildings by asking experts and comparing the transaction costs with international examples. The result was devastating.
The overpricing of office buildings is between 40 and 70%, so it is probably the all-time biggest property scam in Hungary. Válasz Online presumes nobody ever earned this much money with only one idea. The essence is that you should convince the state to buy expensive office buildings regardless of whether they need them. Provided the government is headed by your father-in-law, such persuasions become possible.
Moreover, Tiborcz-circle companies constructed the office buildings (businessmen Attila Balázs and István Garancsi and their associates). That revenue complemented their profit.
Former PM Gyurcsány’s DK turns to police
The opposition Democratic Coalition (DK) is filing a police report alleging embezzlement regarding the government’s decision to buy an office building for HUF 600 billion (EUR 1.5 billion), the party’s deputy group leader said in Budapest on Wednesday.
Gergely Arató told an online press conference that it was “outrageous that at a time of a housing crisis, the government is spending on its own housing rather than that of young people and families.” That sum would have been enough to build 15,000 apartments, he said.
Citing experts, Arató insisted the offices were overpriced “by at least 40 percent”.
Read also:
- Lake Balaton overrun with luxury properties and controversial projects – read more HERE
- Orbán family associate develops massive new residential project in Budapest
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