OTP rumored to join the reconstruction project of M3

NOL.hu reports that it seems the OTP-led financial consortium would finance the reconstruction of the infrastructure of metro line M3 in case the European Union refuses to support the project costing 137.5 billion HUF.

According to the site, it gets more and more likely that the application for support would be denied, or the project would gain partial support only. OTP has not confirmed nor denied their possible involvement yet. The chief mayor of Budapest sent a message through his communication director saying whatever resources are used does not matter. Someone has to pay the costs.

Rumour had it the European Investment Bank may become further involved in the financing process, though it already provides a 100 billion HUF loan for the capital. Of this amount of money, 62 billion are earmarked to be spent on projects regarding transportation, and thus, will be paid for the Russian carriages.

However, Budapest should be better without any more loans, as repaying the debt to BKV already needed governmental support, and Tarlós – unlike his predecessors – is proud of not having been tossing the city into huge debts. Moreover, the decreasing resources would not benefit further loans, either.

Also, the outsourcing of the agglomeration lines and bus lines of the capital narrowed down BKV already, while the fights about the overhead costs caused less available coverages for the public utility companies.

Thus, by law, and because of the limited credit solvency, the government has to ensure guarantee, which would surely be provided on conditions, and at a high price. It appears that financing the reconstruction may be a political case: the European Committee – especially after Brexit – might wary making a decision that could be titled as a bad use of EU resources.

Besides, the EU usually never finances investments that only include reconstruction, but no development or expansion, and, in the case of M3, the length of the tunnels will not change and there will be no new stations, while the accessibility will not get much easier either.

Therefore, the Committee had suggested that other community financial resources may be better, for example, it would provide support through the European Strategic Investment Fund. Although, that would be a non-refundable support and it does not seem probable that it could cover the costs of the investment.

In case of partial support by the EU the developmental ministry would have to look for further resources, whose use could be then decided by the government. Some think that other necessary investments somewhat related to M3 could be sold to the EU as new developments: e.g. turning the rusty area behind the Nyugati Station into a park, or closing off the Déli Station.

However, the application for EU support is not even submitted yet, nevertheless, the National Developmental Ministry said it has to be done by the end of 2016, thus they are not late at all. Albeit, Tarlós said that without a signed contract of support it would be an unfounded commitment to make business agreements.

Though, that seems to be very far, as not even the tender has been announced, and the costs are not known either, for defining the prices is the job of the implementer, and the plans are just in the making. Further details will be only known at the end of October. Hence, the reconstruction will not start this year, but finish later than 2019.

Copy editor: bm

Source: nol.hu