Systemic corruption in Hungary’s public procurement system adds more than 20 per cent to the cost of government contracts. Since joining the European Union, the nation has made strides in introducing new anti-corruption rules, but relevant laws have loopholes. In many cases, the private sector trust in public procurement processes is so low that they don’t even bother to bid. In this context, Transparency International Hungary has signed an Integrity Pact to monitor two high-profile projects. The goal is to show that transparency, accountability and good governance measures result in cost savings and better services from public contracts – not only for taxpayers, but for the government and the private sector too.
Transparency International Hungary is not new to Integrity Pacts. They have used the tool in the past to monitor projects in collaboration with the National Bank of Hungary and local authorities in Budapest. Thanks to the IP, costs across five projects were lowered by 36 per cent.
Highway construction and maintenance in Hungary are notorious for corruption. The M6 highway is a case in point. The 193 km motorway runs from Budapest to Pécs along the River Danube through a rolling landscape of farms and vineyards. During its construction in 2009, corruption-driven crimes lead to the theft of batteries, clods of earth, fuel and concrete. When the main stretch of the road was finally completed in 2010, one of its tunnels collapsed under the weight of the first rainfall. This suggested the materials used and quality of the engineering were not up to standard, and corruption was alleged to have played a role.
In February 2011, one billion HUF (€3.25 million) worth of fictitious invoices were discovered by the inspectors of the National Tax and Customs Administration Office during an audit of the construction of the section between Dunaújváros and Szekszárd. The final stretch of highway construction between Boly-Ivandarda and Hungary’s border with Croatia will cost about €157 million. Transparency International Hungary is monitoring the project in the hopes of ending the catalogue of corruption scandals.
TISZA-TÚR FLOOD RESERVOIR
The regulation of the Tisza River was a grand 19th century building project that began in 1846 and lasted for almost 40 years. It was Hungary’s first step in managing flooding along what was once known as “the most Hungarian river”.
Recently, recurring and devastating flooding along the Tisza near its confluence with the Túr River has necessitated a €89 million project to construct several new emergency reservoirs. Transparency International Hungary is implementing an Integrity Pact to help ensure transparency and accountability in the construction of the Tisza-Túr flood reservoir, one element of the flood protection system.
“It is a really encouraging sign that the General Directorate of Water Management has been willing to work with Transparency International Hungary to promote integrity in Hungarian public contracting. The public procurement landscape is very vulnerable to corruption risks but cleaning up the system benefits everyone involved.”
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