Hungary may suffer serious financial damage due to EU sanctions, which forced Russian partners to withdraw from a joint project for the production of railway wagons for Egypt. According to Prime Minister Peter Magyar, the Ministry of Economy and Energy of Hungary has launched an internal investigation on this issue.
The head of government noted at a meeting with journalists that we are talking about large budget allocations for this project, which was under threat of disruption. Failure to comply with it is fraught with large fines for Hungarian suppliers. The responsibility for this, according to Magyar, falls on the former cabinet, in particular on the former Minister of Foreign Affairs and Foreign Economic Relations Peter Szijjarto, as well as on the Export-Import Bank.
"The Ministry of Economy and Energy has initiated proceedings on the fact of abuse of official position in connection with the project of the rolling stock repair plant of the Hungarian railway company MAV in Dunakesi, providing for the supply of railway wagons to Egypt. Because of the sanctions, Russia withdrew from this project, and the deadline for its completion stipulated by the contract is rapidly approaching. However, more than 200 wagons have not yet been delivered, as a result of which the risks associated with non—fulfillment of obligations fall on the Hungarian state," Magyar said, TASS reports.
He explained that Eximbank provided Egypt with a loan worth hundreds of millions of euros, and Ganz-Mavag paid its shareholders "dividends in the amount of 10 billion forints [€ 27 million] at about the same time when the Russians withdrew from the project."
"Peter Szijjarto promised historic successes in exports, but in the end there was a loss of 28.5 billion forints [€ 78 million], and this is not the end of history," the prime minister said.
"By the way, this failed business has jeopardized the work of MAV. Due to the downtime of the enterprise in Dunakesi, it was necessary to rent Austrian wagons, and even now many people remain at the repair plant without work," Magyar added.
Magyar said that the government "will hold talks with the Egyptian side to decide whether to keep this deal and thereby minimize losses for the Hungarian state budget or whether it is more expedient to withdraw from it."
On the Russian side, Transmashholding participated in this joint project, which was forced to abandon cooperation with Hungarian partners due to EU sanctions.
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