Hungary as the Orbán family’s private estate

It was almost a year ago that I wrote a post about the then newly launched real estate business of Prime Minister Viktor Orbán’s son-in-law, István Tiborcz.  The young man, when he was barely out of law school, set out to become an entrepreneur. He became part owner of what would soon become a thriving, highly profitable business specializing in LED street lighting technology. His family connection to the prime minister practically ensured his success. One city after the other signed contracts with his firm to modernize its street lighting with funds that came from the European Union. All went well until OLAF, the EU’s anti-fraud office, started to investigate. Tiborcz quickly sold his share in the business and moved on to safer pastures. He and his foreign business partners, like the Saudi Gaith Pharaon and the Turkish Suat Gökhan Karakus, began buying up run-down but valuable pieces of real estate. They especially liked stately mansions.

One of their first purchases was the Schossberger Mansion in Tura, about 50 km from Budapest. Although Tiborcz tried to hide his presence in the company, within a few days 444.hu learned that he was one of the new owners of the mansion. Angelina Jolie so admired the mansion that she used it as one of the sets for her movie “In the Land of Blood and Honey.” Although the purchase price was low (280 million forints), fixing up the place will be a very expensive undertaking. Ten years ago the estimated price was 6 billion forints or $203 million. After seeing a 10-minute video tour of the interior, I’m convinced that the cost of renovating and modernizing the place will be much higher than this old estimate.

Of course, we have no idea of the size of Tiborcz’s stake in this business venture, but it is most likely substantial because sometime in the spring of 2016 Győző Orbán, father of the prime minister, showed up and spent a whole day looking around. As a young man from Tura told the reporter from Bors, “it took a long time because he was shown everything inside.” As far as the locals know, the new owners want to use the former mansion as a luxury hotel.

Work began in March 2016, first on the ten hectare park that surrounds the mansion. By September the workers began refurbishing the interior as well. The mansion, which used to be open to the public as a tourist attraction, had to be closed. Some of the locals were sorry that the castle will be transformed into a luxury hotel, but others were convinced that the Orbán connection will do miracles for the sleepy little town of 8,000 inhabitants.Until now Tura was forgotten by the Orbán government. As a local man told HVG’s reporter: “We will have something here only if Viktor Orbán wants it.”

It looks as if Viktor Orbán, now that his son-in-law is part owner of the Schossberger Mansion, wants it. Tura has hit the jackpot. According to estimates, in the next year or two perhaps as much as 20 billion forints’ worth of investment will arrive in Tura.

In May several online news sites reported that a 2.7 MG geothermal power plant will soon be built. It will produce electricity for 800 houses and will also eventually heat greenhouses on 11 hectares. The water temperature of the geothermal well is 129°C. After this incredibly hot water is used to generate electricity, it cools down to 70°C and will then be used to heat the greenhouses. The water, once it has finished its heating cycle, will be returned underground, an EU requirement. The power plant will cost 5.5 billion forints, half of which will come from the European Union and the rest from a consortium of domestic investors.

Tura until now couldn’t offer much to visitors, but its fortune will soon change thanks to the Orbán family.

By late June work began on the power plant. It is being built by KS Orka Renewables Pte Ltd. of Singapore using technology from Iceland, where 90% of the buildings are heated geothermally. The first greenhouses, which will most likely be ready within a year, will occupy 5.5 hectares at a cost of 2.3 billion forints. Again, half of this sum will come from Brussels. Later, other greenhouses will be built, occupying another 5.5 hectares. Altogether the greenhouse project will cost 4.5 billion forints. The greenhouses are expected to produce 6,300 tons of tomatoes, most of which will be for export. The hope is that the greenhouse businesses will be able to amortize the initial investment over six or seven years. The investors project an eventual annual profit of about seven billion forints. In addition, the greenhouses are expected to employ 170 people. It sounds like a terrific project, assuming the projections are halfway realistic.

But surely, it cannot be a coincidence that Tura suddenly became the recipient of all this largess. The investments were declared to be “priority projects,” meaning urgent and important for the national economy. I should add that most of the money comes from three banks: Eximbank, MKB, and Gránit Bank. The first bank is state owned; MKB is apparently owned by someone close to Fidesz and Orbán; and 49% of Gránit Bank belongs to the Hungarian state. Thus, projects that will make the Schossberger Mansion business venture of Orbán’s son-in-law more viable are being financed mostly by the Hungarian state. It is easy to become a millionaire this way.

January 3, 2017
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Istvan
Guest

totally off topic. This news will possibly be much to the amusement of Petofi. Gabor Vona sent a nice letter to the Unified Hungarian Israelite Community and its leader on the occasion of Hanukkah. This has set off a bit of a crisis inside the Jobbik which can be read about at http://www.origo.hu/itthon/20170103-most-veszprem-megyebol-szoltak-be-vona-gabornak.html , http://www.origo.hu/itthon/20161229-eztikai-vizsgalat-vecsesi-jobbik-zsidoellenessege-miatt.html , and about the original letter http://hvg.hu/itthon/20161228_vona_gabor_koves_slomo_valaszlevel .

petofi
Guest

@ Istvan

Not much pleasure for me to see a cut-rate brownshirt prospering in the swamp that be Hungary. Vona, probably
not well read, doesn’t know what happened to the brownshirts of yore…If anyone was to mention the “night of the long knives” he’d probably think it some invite for a pig-do.

Knows he not that eventually, he will be the one trussed up…

Tyrker
Guest

Vona used to be a history teacher by profession.

Observer
Guest

The Orban mafia doesn’t go into real business where profits are market controlled and risks are lurking. Their “business” always involves government, central or local, where the profits are outrageous (Simicska’s main cos booked avg 29% for years).
And, of course the risk is underwritten by the state, which tops up as much as necessary to keep these profits flowing. Out of the dupes’ pockets into the Fidesz pockets.

The only thing that surprised me here is that KS Orka Renuable was given the contract – “normally” a Mèszaros would win the tender and KS Orka would do the job as a subcontractor.

Alex Kuli
Guest

Thermal water at 129 celsius?
I’m pretty sure water turns into steam at 100 celsius. Or did Orban manage to change that as well?

Guest

It is possible because of the underground pressure.

Guest

At what temperatures and pressures water is liquid, steam or ice can be studied in a phase diagram.

http://www.ck12.org/user:Obristl/book/CP-Chemistry-Obrist/section/43.0/

Alex Kuli
Guest

Thanks for the info!

Member

Steam is still water, just in its gaseous form. Just like ice is still water in its solid form.

bimbi
Guest

Na, und?

bimbi
Guest

Wow! This sounds like a great investment for baba Tiborcz and his friends – Pasha Pharaon as well? It is always tricky converting billions of HUF into Є but the rate is:

HUF 1 billion = ~ Є 3 million.

The investment for greenhouses and geothermal totals 9 billion HUF (= Є 27,000,000)
The EU pays half and Tiborcz et al. pay half or Є13,500,000.

In effect the “investors” are given a tax-free gift of Є13,500,000 because they get to keep everything after it has been built, right?

The annual profits are listed as HUF 8 billion (= ~ Є 24,000,000) or, over 8 years Є 192,000,000.

Well, we all know that Viktor Orban (“I am not a wealthy man”) is the master of the EU/Hungarian state rip-off but this beggars belief. Theft on the grand scale – it must be those 2024 Olympics dreams…

bimbi
Guest

If the 6,300 tonnes of tomatoes are sold at Є 4/kg they could just make the profit, but of course, they will have overheads, so they’d better make the price Є 10/kg, unless the tomatoes are a screen for a very high-class whore house in the cleaned up castle!

Observer
Guest

I guess the incredible profits are projected to get the subsidies. If the tomatoes don’t sell well. they will do some asset stripping, ie. “sell” the renovated castle to themselves for peanuts in a bogus tender and let the rest sink, grants, credit and debt included. This started with Csaba Sleht (?) in the 1999-2002 period.

bimbi
Guest

“(Tiborcz) and his foreign business partners, like the Saudi Gaith Pharaon…”

Wait a minute, lemme get this right. The Hungarian government, through Viktor Orban is not only engaging in brazen nepotism but is also financing the business of an international criminal on the lam for whom an arrest warrant has been issued and is using money donated by the EU to do so? Am I right or am I right?

F’get about setting up the brothel in Tura – we already have one right there in the prime Minister’s Office!!

l_mborn
Guest

Seems not only the Hungarian state likes to do business with Ghaith Pharaon:

“Pharaon was awarded a total of $120 million in contracts by the United States military in 2008.”

https://en.wikipedia.org/wiki/Ghaith_Pharaon#Personal_life

Observer
Guest

Wrong. Further Wiki says the oil co was awarded the contract to supply fuel. Pharaon was on its board.
Not the same thing.

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