The rise of Békés Drén Kft.

Easy winnings for Békés Drén Kft., otherwise known as the local Közgép, which since 2010 has gone from one successful public sector contract in water management to another. Its success has been helped by the almost total lack of competition, made possible by splitting contracts to just below the threshold requiring a tendering process. A healthy interest in football helped to cement relationships at the highest level.

A relatively obscure company, Békés Drén Kft. has experienced astonishing growth since the change of government in 2010. While they won public tenders only occasionally under the previous socialist government, during the last 5 years, together with its partners, the company won contracts worth more than 200 million euros (HUF 70 bn).

The owner of the company, Sándor Barkász, is described as an influential entrepreneur, who has been winning big public contracts since Fidesz came to power. Let’s meet this unknown star of the Fidesz era, whose companies have won contracts worth 3 million euros from the Hungary-Romania Cross-Border Co-operation Programme 2007-2013.

Despite the fact that among the general public few people have heard of Békés Drén Kft., entrepreneurs and politicians from near the eastern border, Békéscsaba (HU) and Gyula (HU), sneer when asked about the company and its owner, Sándor Barkász.

A businessman we talked to said: “Békés Drén Kft. is the local Közgép”. He went on to comment, bitterly, how Barkász says that it is very easy to do business in Hungary these days, “Well, for him, it sure is easy,” he added.

Our source was right: while we had never heard of the company, during the last four years they seem to have won everything. Átlátszó reviewed more than 100 public procurements, finding that under the previous government, the company had not been very successful: occasionally they won a public tender, but nothing notable.

However, since 2010, the company was contracted for work totalling 32 million euros. In partnership with other companies, they won another 190 million euros. Moreover, they won 30 procurements worth 66 million euro without competition, as theirs were the only tenders.

Taken together, the contracts won by this company and its partners total 223 million euros. This is a huge amount of money, comparable to the 7-year budget allocated by the ERDF to the HURO programme, where hundreds of organisations would normally be contracted.

The value of public procurement contracts won by Békés Drén Kft. was substantially increased by a tender from the General Directorate of Water Management for a programme aiming to improve the quality of drinking water in Békés county. The tender had a record budget: 113 million euros. And the largest part of this went to Békés Drén in partnership with other companies close to Fidesz.

For a part of this tender, Békés Drén Kft. participated in a consortium with two other very successful companies, Duna Aszfalt Kft. and Mészáros és Mészáros Kft. Together, they won contracts worth 85 million euros. Another contract worth 27 million euros was won by a partnership between Békés Drén Kft. and Aquaprofit Zrt. In fact, Duna Aszfalt Kft. and Mészáros és Mészáros Kft. were partners of Békés Drén Kft. in a number of public procurements. In addition to the huge tender issued by the General Directorate of Water Management, the companies partnered for four other procurements involving waterworks, where the total value of the contracts came to 22 million euros.

Together with Duna Aszfalt Kft., Békés Drén Kft. won a project worth 17 million euros to develop the emergency flood reservoir from Mályvád. Then they received 2 million euros from the Trans Tisza Water Directorate for building canals and other riverbed works.

The company owned by Sándor Barkász signed most of its contracts with regional directorates of the General Directorate of Water Management. In total, the general directorate and regional directorates contracted work with Békés Drén with the value of 170 million euros. Together with Mészáros és Mészáros, Békés Drén Kft. won two contracts worth more than 3,3 million euros. They signed a contract worth 2,9 million with Middle Danube Water Directorate for the rehabilitation of the Séd-Sárvíz canal, then another two contracts with the Bükk National Park valued at 895,000 euros.

Among the usual partners of Békés Drén Kft. there is Közgép Zrt. This company has won one public procurement after another since the Fidesz government came to power. The owner of the company is Lajos Simicska, once the closest ally of PM Viktor Orbán. The companies close to Lajos Simicska paid earnings per share coming to tens of millions of euros, while much of their income came from tenders involving public funds. However, the good old days are gone: Lajos Simicska fell out of the grace, and currently there is an on-going feud between Simicska and Orban.

Békés Drén Kft., together with Közgép Zrt. and Euroaszfalt Kft. won a 3 million euro public tender from the Trans Tisza Water Directorate for the reconstruction of suction-pump batteries. Then, together with Közgép Zrt. and Kötiviép ‘B Kft. they won another project worth 4.5 million euros involving inland water management.

Békés Drén Kft. also won tenders together with Közgép Zrt. and Mészáros és Mészáros Kft. Together with other companies, they won a 15 million euro project from Duna-Vértes Regional Waste Management Association. The project aimed to recultivate garbage dumps. The company owned by Sándor Barkász signed most of its contracts with regional directorates of the General Directorate of Water Management. In total, the general directorate and regional directorates contracted work with Békés Drén amounting to 170 million euros. In this period, the General Directorate of Water Management was led by Béla Molnár, a Fidesz politician from Békés county. Besides his mandate as a director, Béla Molnár remained a member of the chair of the Fidesz organisation in Orosháza (HU). Béla Molnár was president for 10 years at the Fidesz organisation in Orosháza. He was re-elected in 2014.  

Within the CBC programme, Békés Drén also won a few big projects with a total value of 3 million euros. They faced real competition in only one of the 8 public procurements: the company won the rest through negotiations and without a prior call for competitive bids. The main partners of Békés Drén Kft. were the regional water management directorates. Békés Drén Kft. was awarded a number of implementation projects. They built suction-pump batteries at Malomfok, an industrial access road on the right bank of the Maros flood protection area, coastal protection works on the Fekete Körös. For these projects, the company was paid 1,2 million euros.

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The lack of competitive bidding was justified by saying that the approximate value of the four projects is below the threshold set at 500,000 euro (A public tender call needs to be issued only above this limit. However, open tendering is permitted below this value.).

The most important thing about the negotiated procedure without competitive bidding is that the tendering entity can choose which three companies can place their bid. We wanted to know what were the criteria applied that meant the water management directorates choose Békés Drén Kft. as the potential bidding company.

We found out that the tendering bodies invited companies with whom they have a previous working relationship, and were happy with the work they carried out. At the Körös Area Water Management Directorate there was one more criteria: they wanted a local contractor.

The value of the Sarkad project was 13,000 euro below the threshold set, therefore the city council choose the contractor through a negotiated procedure without prior call for competition.

When choosing the contractor, the city council regarded the reference for canal building, and they wanted the majority of employees from Békés county.

The city council of Sarkad (HU) also contracted Sándor Barkász’s company through a negotiated procedure without prior call for competition. Sarkad won a project together with the Romanian city of Salonta for water drainage works.

Sarkad executed this investment through the project with the code HURO 1101/030 (Waterman 2). The project with a total budget of 2 million euros was necessary because “in the Nagyszalonta-Sarkad border area the poor drainage is a huge problem. Both cities are confronting with inland inundation near the Kölesér and Gyepes-canal.”

As part of this project, Békés Drén Kft. won another contract worth 60,000 euros for sewage system building. This is interesting because if the two contracts were not separated, the threshold level would have been exceeded and the city council would have to announce a public competition. But this way Békés Drén Kft. could obtain both projects through a negotiated procedure and without competition.

The company won a total of 7 tenders under the CBC programme, but only one through open tendering. The Research Institute for Fisheries and Aquaculture (HAKI) from Szarvas (HU) won a project concerning the modernisation of their experimental lakes. The project with a value of 1,1 million euro was contracted by Békés Drén Kft. The tender was won without competitors: only Békés Drén Kft. submitted a valid submission.

When asked to comment, The Research Institute for Fisheries and Aquaculture said that the technical requirements could be met by a number of other Hungarian companies (they named companies like Strabag, Swietelsky, Beton út Zrt., Colas, Közgép). They added that the tender was open, meaning that companies from all over the EU could compete. “We don’t know why they didn’t submit proposals”, the company said.

 

 

 

“Everything needs to be discussed with him”

 

The company’s success in contracting projects is shown on its results. The company’s profits increased threefold (from 890,000 euro to 2,7 million euro), its revenues increasing from 7 million euro to 18 million euros between 2010 and 2014. When asked about the secret of Békés Drén’s success, our sources started talking about Fidesz.

Until now, the only information to be found about Barkász Sándor was that at age 29 he built his empire from nothing. As beol.hu noted: “All he had was a Dacia car, and with this, he founded the ninth most dynamic company in the country”.

In 2013, Figyelő weekly analyzed companies that show the most dynamic growth, and Békés Drén was ranked at number 9. Thanks to his hard work, Békés Drén became a company with almost 100 employees. Later Barkász started a political career: he is a local counselor in the Békés city council in the colours of the Right-wing Collaboration Circle for Békés (Jobboldali Összefogás Békésért Polgári Kör). “This is the other Fidesz” – commented a local politician.

Barkász is considered to be the most influential entrepreneur of the area. “Everything needs to be discussed with him” – complained a man who has known Barkász for decades. The connection between Barkász and Fidesz is considered a fact, and his company has the gained the nickname of “Little Közgép” (Közgép has been one of the most known companies close to Fidesz).

The owner of Békés Drén Kft. also founded something that seems like a school: the Delta Academy. The school is a nonprofit with its address at the offices of Békés Drén Kft. The company was founded in 2011 together with H. Kovács Judit, who used to be a director at the National Development Agency.

From the website of the academy we know that its most important programme is the Summer Academy, where those interested can attend lectures over a 5-day period. In 2011, the academy has seen many lecturers that can be linked to Fidesz. Cser-Palkovics András, the mayor of Székesfehérvár talked about youth programs, while a media panel was led by Boróka Gábor, the editor-in-chief of Heti Válasz, a weekly known to be close to Fidesz.

Among the lecturers, there was the actual president of the State Audit Office, Domokos László. Barkász is a long-time friend of Domokos, our sources confirmed. Just like Barkász, Domokos started his political career in Békés county, before being named in front of the State Audit Office. From 1998 to 2002, then from 2006 to 2010, he was the president of the Békés county council. We were informed that despite its mandate at the State Audit Office, Domokos is still an influential person in the area.

Domokos, when asked about his relationship with Barkász, said that their friendship has nothing to do with Békés Drén Kft. He added that the State Audit Office is among the sponsors of the foundation behind the Delta Academy.

Many people said that Barkász must have other, even higher connections in Fidesz. “Otherwise how could he win tenders together with Mészáros and Simicska?”, asked one of our interviewees

It is commonly believed that Barkász is all but a family member of PM Viktor Orbán: he might be the godfather of one of the daughters of the prime minister. We heard this from multiple sources, but we could not confirm it officially. Bertalan Havasi, the press officer of the prime minister said that he can neither confirm, nor deny this information. “I believe this is an inquiry about private matters, therefore it is not my task to gather and provide information on this issue”.

Sándor Barkász also refused to answer our questions. We contacted him with questions regarding his relations with PM Viktor Orbán and László Domokos, as well as the success of his company. None of our inquiries was answered.

One thing is sure, there is one common denominator between Sándor Barkász and the prime minister: football. In 2012, Barkász purchased shares in the Békéscsapa 1912 Előre football club which plays in the second division. Soon the club received public funds amounting to 2.6 million euros for the enhancement of their stadium. And among the sponsors of the football academy founded by the prime minister, we can find Békés Dren Kft. along with Közgép Zrt. and Mészáros és Mészáros Kft.

Authors: Ildikó D. Kovács – Babett Oroszi – Zoltán Sipos
Tableau visualisation created by Attila Bátorfy