It was last summer that I wrote an post on "The ill-fated Budapest metro." It was an overview of the whole mess of Line 4, still unfinished. The story goes all the way back to 1972 when it was already obvious that the city needs more metro lines, but it was only in 1998 that work could begin on the project. The City of Budapest managed to convince the Hungarian government of Gyula Horn to give a guarantee on a loan that was necessary in order to start work. But then came Viktor Orbán, and the new government refused to honor the agreement. Four years later, after Orbán lost the elections, construction began at last. The original deadline for completion of the line was 2012, but it is highly unlikely that anything will come of it. First of all, István Tarlós, the new Fidesz mayor, claiming financial troubles, wants to shorten the planned length of the new metro line. However, there is another problem that most likely will postpone the whole project far into the future. It is the controversy concerning the braking system of the metro cars manufactured by Alstom Transport, a large and well respected French company whose cars are being used in China, India, Chile, Singapore, Spain, and Turkey.
Last July the National Transportation Authority announced that the Alstom cars are not good enough and it refused to certify them. According to the Authority's experts there were several problems, but the most serious was the brake system. This happened a year and a half after the same National Transportation Authority had announced that upon preliminary inspection the metro cars passed muster and thus, as the contract specified, the City of Budapest paid half of the total cost, 30 billion forints.
The July decision was more than strange considering that the Alstom cars conformed to European Union standards and have been running without any trouble for a number of years. There was a strong suspicion that the National Transportation Authority's decision was not based solely on technical considerations. I always suspected that the long arm of Fidesz, then still in opposition, managed to reach the "brake experts" at the Transportation Authority. My suspicion was reinforced by the obvious delight of the Fidesz members of the the City Council at the prospect of breaking the contract with Alstom. They wanted to break the contract right there, on the spot. Eventually BKV (Budapest Transit Authority) sued Alstom for the 30 billion forints but in a French court the Hungarian side lost. The Hungarians appealed and now the case is being argued before the appellate court in Versailles.
Common sense would have dictated some kind of compromise with Alstom, but Fidesz people loathe compromises. Although prior to his election Tarlós talked about possible further negotiations with the French firm, he changed his mind. Knowing something about the internal workings of Fidesz, my hunch is that the word came straight from Viktor Orbán. No negotiations. Why not? Why should they risk the loss of 30 billion forints? Perhaps once again to derail the completion of the metro that after all was being built during the liberal leadership of the city. Tarlós later claimed that he tried to negotiate but that Alstom refused. Apparently that is a lie. They were ready to negotiate but wanted to have 4-5 billion forints for the changes the Hungarians insisted on.
Most likely BKV will not only lose 30 billion forints but can start the whole painful process of finding another supplier of metro cars. Further delays. According to people in the know, that might mean a delay of another year and a half. But that's not all. The European Union is providing 180 billion forints in assistance to build the new metro line, money which might be lost if the project is not finished by the EU deadline–2014. Moreover, if the Hungarian side loses the law suit, which is likely, BKV will have to pay very hefty court costs as well. Over and above the 30 billion deposit. According to some estimates that might mean as much as 60 billion forints altogether.
Tarlós is especially furious about the contention of Alstom's lawyers that the Hungarians wanted to break the contract because they actually had a secret understanding with the Russians to purchase Russian cars. In fact, he is ready to sue them for so arguing in the courtroom. As if one lost suit weren't enough. It is very unlikely that the people at BKV actually wanted to buy Russian cars, but I'm sure the French wouldn't understand that a party's political interests are so important in Hungary that to this end they are ready to sacrifice 60 billion forints of the taxpayers' money. Indeed, few people would be able to grasp that such things can happen. But, I'm afraid, they can. In Hungary.