Hungary – two projects to break the cycle of corruption in public procurement

Filed under - Integrity Pacts Programme

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In 2016 the European Commission teamed up with Transparency International to pilot the use of Integrity Pacts for 17 projects in 11 Member States, including Hungary, worth a total of EUR 900 million. To find out more about each project click here.

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 the relevant laws are complicated and full of 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. This will encourage more bidders, make pricing more competitive, and safeguard public money.

TI 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 the five projects were lowered by 36 per cent.

The notorious M6 highway

Highway construction and maintenance  in Hungary are  notorious  for corruption. The M6 highway is a case in point. It has been beset by problems almost since the planning stages.

The 193km motorway runs from Budapest to Pécs along the River Danube through a rolling landscape of farms and vineyards. During construction of the M6 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 clearly not up to standard. Again corruption was alleged to have played a role.

Then in February 2011, one billion HUF (EUR 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 EUR 157 million. Transparency International Hungary is going to monitor the project  in the hopes of ending the catalogue of corruption scandals.

The 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 an EUR 89 million project to construct several new emergency reservoirs. One element of the flood protection system, the construction of the Tisza-Túr flood reservoir, will use an Integrity Pact. Transparency International Hungary will monitor the project to help ensure transparency and accountability.

"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,” said the Executive Director of TI Hungary at the Integrity Pact signing in May 2017. “The public procurement landscape is very vulnerable to corruption risks but cleaning up the system benefits everyone involved."



Country / Territory - Hungary   
Topic - Public procurement   
Tags - Public procurement   |   European Union   |   Integrity Pacts   |   Infrastructure   |   Hungary   |   citizen participation   |   TI Hungary   |   clean contracts   

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