A short while ago I devoted a post to the financial collapse of the City of Pécs, which, after many years as an MSZP stronghold, chose Zsolt Páva as its Fidesz mayor in October 2009. Within weeks it became evident that Viktor Orbán, in anticipation of his electoral victory, was using the city as a political laboratory. It was in Pécs that the new Fidesz leadership tried out the practice of “citywide consultations.” Páva sent questionnaires to the inhabitants, asking them questions to which the answer could only be “yes.” One of his most expensive moves, most likely at the urging of Fidesz, was the forcible takeover of the French share of the water company, which years later cost the city three billion forints in a legal settlement. The city’s attempt to take over the famed Zsolnay porcelain factory ended in failure due to the determination of the Syrian-Hungarian-Swiss owner. This was also a costly affair for Pécs because, in the course of the machinations to ruin Zsolnay, the city set up a rival company called Ledina Kerámia and enticed 150 Zsolnay employees to join the phantom firm. The city had to pay the wages of 150 workers for no work whatsoever.
These two financial ventures by themselves have been very costly, but they were only a small fraction of the enormous debt Zsolt Páva and the city council amassed in the last seven years. According to a new website called Szabad Pécs (Free Pécs), the city owes 7.5 billion forints, which apparently the national government will take over. That’s not all, however. There are several municipal-owned firms that are in the red to the tune of 10 billion forints. This is an enormous amount of money ($29 million) for a city of about 170,000 inhabitants with not much of a tax base. Viktor Orbán, while visiting the city at the end of August for the 650th anniversary of the founding of Hungary’s first university, established in Pécs, asserted that the city’s leadership got itself into this mess and they will have to pay for it.
I don’t think anyone knew at the time just what Orbán meant, but a few days ago local investigative journalists working for Szabad Pécs learned that the government is not planning to bail Pécs out without some kind of compensation. A week ago rumors began circulating in town that the city-owned Pécs-Pogány International Airport will be taken over by the government, which will in turn write off 2.8 billion forints of the city’s debt. On the face of it, such a government purchase wouldn’t be profitable. The number of passengers, which was over 6,000 in 2009, by 2014 had shrunk to 2,500. But the deal might actually be quite lucrative for the Orbán government because the airport will likely be leased to Rosatom, the Russian company that will build the Paks II Nuclear Power Plant. The distance between Paks and Pécs is almost 80 km, but the four-lane M-6 highway is sparsely traveled. Moreover, Mohács along the Danube is only 40 minutes from Pécs. Material could easily reach Paks via Mohács.
A few days after the appearance of Szabad Pécs’s article, a Russian delegation led by Alexey Likhachev, the CEO of Rosatom, visited the Pécs airport. He and his fellow Russians were accompanied by members of TEK, Hungary’s Counter Terrorism Center. The delegation first visited Paks. From there they traveled to Pécs to take a look at the airfield. The journalists of Szabad Pécs were on hand and took several photos. I may add that none of the local “government” news outlets said a word about either the government’s takeover of certain municipal assets in Pécs or the possible leasing of the Pécs airport to Rosatom.
Despite the visit of Rosatom’s CEO to Pécs, János Lázár denied any knowledge of a deal that might exist between Rosatom and the Hungarian government. As he said, “this topic was not discussed at the cabinet meeting. We did talk about the situation in Pécs, but nothing was said about the exchange of property. As far as the airport is concerned, I read about it in the media.” Of course, the lack of discussion of the matter at a cabinet meeting doesn’t necessarily mean that such negotiations didn’t take place. But Lázár, as usual, went further. He claimed that “if that is important to Rosatom, it has to talk to the municipality. The government has no information, no knowledge of such negotiations. They didn’t approach us with such a proposal.”
Well, as far as we know, the CEO of Rosatom didn’t visit Pécs to talk to the city fathers about leasing the Pécs-Pogány Airport. Moreover, as far as the journalists of Szabad Pécs know, the transfer of certain properties to the government is still on the table.
Today Attila Babos, the local journalist at Szabad Pécs, was invited to publish a longer article in Magyar Nemzet on the possible Rosatom takeover of the Pécs Airport. He claims that it is also likely that, in addition to the airport, the government will take over two city-owned companies: Pétáv Kft., the local district-heating company, and Tettye Forrásház Zrt., the city water company. The latter is the company the city established to take over the functions of the water company operated and partially owned by the French Suez Company. The city promised lower rates, which didn’t materialize, but at least the company is now profitable. Pétáv Kft. is also in the black. But, given the size of the debt, the fear in town is that several other pieces of property might end up in government hands. No one knows whether the city will have any say in what properties it is willing to part with.
Not surprisingly, Fidesz’s name is mud in Pécs. Páva and his coterie of Fidesz politicians, including the two Fidesz members of parliament representing the city, are blamed for the present state of affairs. As Attila Babos said in his article, “not even within Fidesz does anyone seriously think that the government parties [Fidesz-KDNP] can possible win in the city in the spring of 2018.” Still, Viktor Orbán cannot leave the city in the lurch. At the same time, the government feels that it has to make “the city pay” in order to show that such irresponsible behavior cannot be tolerated.
Finally, a few words about Szabad Pécs. On March 22 several internet news sites reported that three former employees of Dunántúli Napló who lost their jobs when Lőrinc Mészáros bought the last eight of the 109 regional papers not yet in government hands, including Dunántúli Napló which has been in continuous existence since 1946, decided to start an online paper, concentrating on Pécs and Baranya County. Without them we would know next to nothing about Rosatom’s interest in the Pécs airport or the quick visit of Alexey Likhachev. That tells us a lot about the state of the Hungarian media outside of Budapest.