Hungary’s government says it will terminate the country’s 35-year motorway concession, launch criminal complaints and seek to return the operation of much of the motorway network to the state. The government argues that the contract is legally questionable and places excessive financial risks on taxpayers.

Hungary’s overnment targets 35-year motorway deal

Prime Minister Péter Magyar announced on Friday that the government would take steps to terminate the motorway concession agreement held by MKIF, a company associated with businessmen Lőrinc Mészáros and László Szijj.

The agreement, signed in 2022, covers the operation, maintenance and development of a substantial part of Hungary’s motorway network until 2057. MKIF originally took over 1,237 kilometres of existing expressways, with the network ultimately expected to reach around 1,670 kilometres under the concession.

Magyar said the government would use all lawful means available to end the arrangement and would also file criminal complaints. He described the contract as involving more than HUF 23,000 billion over its 35-year duration.

Transport and Investment Minister Dávid Vitézy said the government estimates that keeping the agreement in place could result in payments of HUF 23,196 billion in nominal terms over the full period. He said HUF 870 billion had already been paid to MKIF and that a further HUF 1,986 billion would be due by 2030 under the existing arrangement.

Government alleges excessive costs and legal problems

Vitézy argued that the agreement does not constitute a genuine concession because, in the government’s assessment, the state ultimately assumed most of the financial risks while MKIF retained the potential benefits.

The minister claimed that the state could operate and maintain the motorways 53 per cent more cheaply than MKIF and carry out major maintenance work at a 61 per cent lower cost. These figures are based on a comparison between MKIF’s prices and estimates prepared by state-owned Magyar Közút (Hungarian Public Roads), according to Vitézy.

The government also objects to subsequent amendments to the contract. Vitézy said changes made in 2023 increased the financial compensation by 50 per cent and introduced compensation for additional costs, including higher construction and financing expenses. The European Commission has also launched infringement proceedings concerning the concession, according to the government and Reuters.

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State could take motorway operations back

If the concession is terminated, Hungary’s Magyar Közút is expected to take back responsibility for operating and maintaining the affected motorway network. However, Vitézy stressed that this cannot happen overnight. MKIF currently controls motorway engineering bases, equipment and vehicles, while more than 900 employees previously working for Magyar Közút moved to the concession operator when the arrangement began.

MKIF itself says these assets were purchased from the state and that the concession was awarded through an EU open procurement process. The government wants the transition to begin by the end of the year, but Vitézy warned that cooperation from MKIF will be necessary.

If the two sides cannot reach an agreement, disputes could ultimately go before an international arbitration tribunal and potentially last for years. The government has also pledged to ensure that ongoing motorway projects, including works on the M1, are not left unfinished during the transition.

The press conference can be watched below:

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