The wealthiest Hungarian builds railway in Budapest for ten times the average price

The execution of the Ferencváros-Kelenföld railway track will cost net EUR 936.7 million that will be carried out by V-Híd Építő Plc., directly owned by the richest Hungarian, Lőrinc Mészáros. According to experts, the Southern Railway Bypass has become a tenfold overpriced project.

Hungary’s busiest railway line can be found between Ferencváros and Kelenföld. Besides the two 100-year-old existing tracks, the Hungarian government would increase the capacity by an additional track here. The project’s first step was the expansion of the Southern Railway Connecting Bridge that will be completed soon. The next phase is the construction of the missing six-kilometre-long rail track. However, the railway traffic on the other two tracks must be maintained because, without it, the railway transport in the whole country would literally stop. Therefore, the project is not easy to carry out.

As the Hungarian news portal, Népszava reports, what is even more surprising is that

the execution will cost net EUR 936.7 million and will be carried out by V-Híd Építő Plc., directly owned by the richest man in Hungary, Lőrinc Mészáros.

The company had only one rival in the public procurement with an offer of EUR 160 million per kilometre. But eventually, V-Híd Építő Plc., directly owned by Lőrinc Mészáros, won first place in the public procurement for EUR 155.6 million per kilometre.

As the Hungarian news portal 168.hu reports, it is questionable how genuine the competition actually is in two-player procurement. According to corruption-researchers, we can only talk about substantive competition in public procurement with four or five participants. Still, it is striking that no foreign company has submitted a bid for such a contract.

Some engineer experts say the Southern Railway Bypass has become a tenfold overpriced project.

This provoked the outrage of opposition politicians, according to whom the government should not conclude this “cheekily overpriced” contract and cancel the public procurement immediately.

The Hungarian economic news portal G7 has aggregated major international rail projects in recent years. In unit cost, none is comparable to the current price:

a Munich railway tunnel for EUR 105.6 million per kilometre was the most expensive, but even one kilometre of the domestic four-meter metro came out of EUR 85.6 million. The overpricing of domestic projects is well indicated by the fact that the high-speed TGV line between Tours-Bordeaux is being built for an amount equivalent to EUR 11 million per kilometre, also cheaper than the Budapest-Belgrade railway, which is technically simpler and designed for significantly lower speeds.

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Source: nepszava.hu, 168.hu, g7.hu