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Kozgep’s fall from grace – in numbers
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Oligarch Lajos Simicska’s business took a beating after he spectacularly fell out with premier Viktor Orban in 2015. The records show that his Kozgep construction firm, which won every public procurement tender it entered, saw a dramatic drop in state contracts.
Hungary’s construction sector is highly reliant on state projects which are mainly financed from European Union funds. Last year saw the end to payouts in the 2007-2013 budgetary period, which is evident from the 20% drop in construction sector output in January 2016. Atlatszo.hu had a look at how contracting patterns may have shifted in the past years to review who benefitted and who lost out.
In recent years, 2013 was the best year for the builders, when top ranked Switelesky was contracted for state jobs amounting to HUF 157 billion (€506 million), and Lajos Simicska’s Kozgep came in second with HUF 144,4 billion (€466 million).
As conditions shifted, so did the rankings. Although overall volumes had dropped significantly by 2015, the situation also reflects the political landscape. Duna Aszfalt, which was in a distant fourth position in 2013, is now almost tied in first place with “market leader” Swietelsky. Meanwhile, Simicska’s vocal and public clash with his former friend Prime Minister Viktor Orban in early 2015 left its mark on Kozgep. The company quickly saw its supply of state jobs dry out, to receive only HUF 1,5 billion (€4,8 million) from the state funds last year.
This article was monitored by the Corruption Research Center Budapest. CRCB was created in November 2013 in response to the growing need for independent research on corruption and quality of government in Hungary. The Center was established as a non-partisan research institute independent of governments, political parties or special interest groups. It is initially financed by the founders, but also from private donations and EU and government research funds.