Budapest’s leadership in the Orbán cabinet’s trap after buying Rákosrendező and baulking the Mini Dubai project?
Dávid Vitézy, a former Fidesz-backed mayoral candidate and leader of the Podmaniczky Movement, believes that Budapest would be able to buy Rákosrendező from the state by using MOHU money. MOHU says Vitézy is wrong. Meanwhile, Mayor Krisztina Baranyi said the Hungarian government would not carry out the infrastructure developments they promised for the UAE investor, including the extension of the M1 metro line, overpass building, and railway development. Therefore, Budapest will pay for years for the acquisition, but the capital will not be able to develop the territory.
Mayor Baranyi talks about a possible trap
Baranyi says it was a political success that the leadership of Budapest exercised its pre-emption rights and would buy Rákosrendező instead of giving the UAE investors a free hand to build anything they would like there, including even 500-metre-high skyscrapers. However, she said Budapest’s leadership would find it difficult to reach an agreement with the Orbán cabinet, which promised inevitable developments on the polluted territory to make it acceptable for a grand housing development like Mayor Karácsony’s Park City Project.
Baranyi says that without such an agreement, it would be impossible for Budapest to develop the territory, and the leadership would only have to pay back its purchase price while distracting that money from other, presumably more important developments.
Private investors should be involved
Baranyi argued that private investors should be involved in the project, but without cleaning the area and carrying out the necessary infrastructure developments, there would be no companies which would invest their money there due to the high costs. Therefore, they would start construction projects not favourable for the residents to realise profits.
The cleaning and development of the area should be carried out with the involvement of private investors, but in such a way that the land remains in the ownership of the capital as much as possible, meaning that the investors only have ownership of new buildings, Dávid Vitézy, the leader of the Podmaniczky Movement group in the Budapest assembly, said in an interview with news portal Index.
Funds from MOHU, a unit of Hungarian oil and gas company MOL that has a nationwide municipal waste management concession, are allowing Budapest Közművek Nonprofit (BKM), a company owned by the Budapest municipality, to purchase the Rákosrendező brownfield area, he added.
Vitézy said in the interview that BKM has funds from the revenue of the waste management concession as “there was a one-time income from the transfer of a waste recycling plant, which was 33 billion forints, which the city can use for this” purchase, he said. Vitézy noted that the 33 billion forints (EUR 81.4m) would be enough to pay the first two instalments for the area’s purchase price, a combined 30.5 billion forints, but the third instalment, some 20.9 billion forints, would have to be provided by the city by 2039.
Problems with paying the purchase price
In response to the interview, MOHU issued a statement on Saturday saying that Vitezy was inaccurate and that city council will “definitely not buy the Rákosrendező area from the waste management revenues”. The company noted that MOHU had paid 39 billion forints to BKM for a 50 percent stake in MOHU Budapest and its operation, however out of this amount 17 billion forints can only be spent by BKM on the development of the jointly owned MOHU Budapest.
Alexandra Szentkirályi, the leader of Fidesz in Budapest, showed the garbage dumps:
MOHU further noted that at the end of 2024, as part of this contract, MOHU Budapest also purchased a waste sorting and logistics facility from the capital, partly financed with EU funds, for an additional 13 billion forints. However, the purchase price can be used by the municipality only in connection with EU support. The company said it was not MOHU’s business to determine what resources Budapest has, the company’s task was to “modernise and develop the domestic waste management system”.
Government wants to back out of Rákosrendező commitments, says Mayor Karácsony
Gergely Karácsony, the mayor of Budapest, has accused the government of wanting to back out from the transport development commitments it has made regarding the Rákosrendező brownfield area. “It will soon become clear if the people of Budapest are as important to the government as the Arab investor,” the mayor said in a post on social media on Saturday.
Karácsony said the government has committed to a 320 billion forint (EUR 789.5m) transport investment in a two-thirds vote law, without which the green residential area investment planned for the area could not even start. According to the purchase agreement, the government and the city council must agree on the details and exact schedule of the developments within six months, he added. These developments cost more than ten times as much as cleaning up the area, but as the government was focusing on the latter, this was in preparation for the government to “back out of its commitments”, the mayor said, adding they “will not let this happen, because the Arab investor cannot be more important than the people of Budapest”.
Clarifying rail infrastructure key to unlocking Rákosrendező development
The municipality of the capital must agree with state railway MAV on the status of rail infrastructure in the Rákosrendező brownfield area before the district’s development can get under way, the mayor of Budapest Gergely Karácsony said Friday at professional discussions on the matter.
Issues include the necessary upgrade of rail infrastructure as well as agreement on a detailed master plan, he said, noting that a common understanding was needed on train operations and the extent of the area required to meet these needs, as well as on any investments the government planned.
Noting the government’s acknowledgement of the pre-emptive rights on Rákosrendező belonging to a municipal company, he said the government had “embarked on the right path”. “We really want to believe the government has Budapest’s best interests at heart”, he said, adding that this was hard for now. Unless the government shows a positive attitude, “nothing will come of the dreams”, he added.
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