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Hungary by atlatszo.hu

How to waste public funds

Landowners kept in the dark about new Hungarian MotoGP track to be built on their farmlands

After the failed Balatonring project in Sávoly more than ten years ago, the current government is once again trying to build a MotoGP track in Hungary. The 500-hectare circuit will cost HUF 65 billion, in Eastern Hungary, near a small town called Hajdúnánás. The first upcoming Hungarian Grand Prix will take place in 2023. The project will begin with land expropriation this year, affecting dozens of families and landowners. We managed to talk to a few stakeholders who stated that they have not yet received any official document on when and for how much they will have to sell their property.

In November 2019, Lajos Kósa, former mayor of Debrecen, and current Fidesz MP announced the construction of a MotoGP track in Eastern Hungary. At that time, all that was known was that the track could be constructed near Hajdúnánás, and according to preliminary plans, 65 billion HUF would be spent on the construction of a training and conference center and a hotel, in addition to the race track.

This year, the government allocated one third of the total amount for the construction, HUF 20.4 billion, from the Economy Protection Fund, which is intended to offset the negative effects of the COVID-19 pandemic.

This is not the first time that Hungary is planning the construction of a motor racing track: it was exactly ten years ago when the construction of the first Hungarian racetrack, the Balatonring in Sávoly failed. The cornerstone of the track was laid in 2008, but construction stalled two years later because the Spanish investor was not given a loan by the state-owned Hungarian bank. The investment, which altogether would have cost 80 million euros (approximately 22 billion HUF) stopped in 2010, by which time roughly 30 million euros had already been invested in the project.

According to the plans, the first race in the newly constructed track will be held in 2024. By this time, the construction of the hotel, as well as the conference and training center, must be completed as well.

Press conference about the MotoGP project on June 20, 2020. Source: Facebook / Lajos Kósa

Dozens of billions for motorcycle races

A Hungarian newspaper, G7 examined other international examples to find out how profitable these races would be. Accordng to their calculations, the price of the track could be recouped in about 200 years. In addition, construction costs are much higher than anywhere else in the world.

The tender for designing the MotoGP track was launched in December 2020. The public procurement revealed that the size of the facility will be approximately 500 hectares and the size of the planning area is 620 hectares. According to the plans, the track will be 4.4 km long, and the multifunctional complex will be able to accommodate approximately 30,000 people.

But it’s not just the cost of the construction that has to be paid, because acquiring organizational rights also costs billions. Hungary have to pay the Spanish Dorna Sports company a net nine million euros for royalties, which is about 4 billion HUF. The contract was signed in early March 2021 for 10 years.

Not only MotoGP races will be held on the track, Superbike racing series  will also take place in Hajdúnánás. The license fee in the first year is 900 thousand euros, roughly 323 million HUF, which can increase by a maximum of three percent per year.

This means that in ten years, the government can pay a total of 123.5 million euros (44.3 billion HUF) from the central budget to support car and motor sports, which, together with the 65 billion needed for the construction, will exceed 110 billion HUF.

Lajos Kósa’s old „friend” in an important position

The state-owned Kelet-Magyarországi Versenypálya Kft. is responsible for the operation of the MotoGP track. The company was established in August 2020 with a subscribed capital of HUF 3 million and a capital reserve of HUF 100 million. The managing director of the company is József Pacza, who was previously the deputy head of the urban development department of Debrecen and the head of the urban planning department of the mayor’s office, so he was working together with Lajos Kósa for years.

The track in Hajdúnánás is not the only place where the paths of Pacza and the Fidesz MEP, Lajos Kósa intersected: in 2019, the company of Pacza was responsible for the technical inspection and consulting tasks of the investment managed by Lajos Kósa and the construction of the National Skating Center planned for 43 billion HUF.

What is more, Pacza’s companies (KEM-Ber Kft. and Első Mérnöki Iroda Kft.) have won a lot of high value public procurements in the region in recent years. According to Opten, KEM-BER achieved 143 million net sales and 30 million after-tax profit in 2019, but it was a similarly successful year for his other company, Első Mérnöki Iroda, which generated HUF 145 million net sales and 117 million profit.

It has recently been revealed that the BORD Architectural Studio has won to design MotoGP Circuit and Sport Complex in Hajdúnánás. The company has participated in a number of significant projects in recent years: among others, they wonthe design competition of the Debrecen International School where Pacza’s company was also present, but another investment, also related to Pacza’s company, the reconstruction of the Nagyerdei Stadium in Debrecen was also based on the design plans of Péter Bordás’s company.

Valor Hungariae Zrt., renamed to Hungarian Automobile Motorsport Development Agency Zrt. (HUMDA) in September 2020, has the right to exercise control over Kelet-Magyarországi Versenypálya Kft. The name Valor is best known for the Hungarian Pavilion known as the „Shaman drum” which was built for the 2015 Milan World’s Fair. We also dealt with the scandalously high construction and reconstruction costs, as well as the designer’s complaint in our article:

Hungarian Pavilion of the 2015 Milan World Expo still swallows taxpayers money

The chief designer of the eclectic Hungarian Pavilion known as the „Shaman drum” filed a report to the Hungarian prosecution in September to stop wasting public funds on the now defunct and dismantled building, the remains of which have been transported to the Hungarian town of Karcag to rebuild.

HUMDA owns another company, called Humda Pro Szolgáltató Kft. whose managing directors are Zoltán Szujó, sports reporter and Kornél Kalapács. The latter was the member of the Board of Directors of Bayer-Construct Zrt., A construction company group currently owned by Attila Balázs. Last year, Válasz Online refered to him as the the “new comet” of the System of National Cooperation (NER), as the circles of Lőrinc Mészáros and István Tibor can be found near some business concluded by the company.

Company network about companies and people involved in the MotoGP construction

There is no official notification yet

The consultations with the affected landowners began in mid-December 2020. „The expropriation process, as far as I know, will take place sometime by the end of spring. However, the exact location of the track can of course be known sooner” – stated Tibor Szólláth, the mayor of Hajdúnánás (Fidesz-KDNP). The government has set aside altogether 800 million HUF for the expropriation of the lands.

In connection with the construction of the track, MPs from the opposition already approached the Ministry of Innovation and Technology (ITM) several times recently, to gain more information about the project, but without real results. At the beginning of March, we also tried to get more details regarding the feasibility study regarding the investment, but we did not receive the requested documents either.

For the time being, no official information is available about the exact location of the construction, but based on the knowledge of locals, the location can be roughly outlined. It is already certain that the MotoGP track can be built between Görbeháza and Hajdúnánás, less than 10 kilometers from the city boundaries of Hajdúnánás.

According to our information, the construction of the MotoGP track between Görbeháza and Hajdúnánás can take place around this area. Source: Google Earth

We also contacted several local landowners, who, to our knowledge, will be involved in the expropriation, but few have agreed to talk to us as well, even anonymously, fearing of possible consequences.

The main complaint was that although the mayor said the expropriation was expected to finish by the end of spring, they still did not receive any specific information or official paper on the process.

„Everything happens here in a way we don’t even know who is behind the events,” said one landower,  who added that lands had been appropriated from them before, but „it wasn’t like this”.

The lack of information is also shown by the fact that one of our sources stated that he heard of someone who only became aware that his land will probably be involved in the works that he noticed surveyors in his property in the beginning of autumn, but they weren’t able to prove what they are doing on site, and on whose behalf.

The public forum informing the landowners took place only in the middle of October. However, no progress has been made on the matter since January, so for almost 3 months no information has been provided to the farmers and landowners concerned.

In March, Lajos Kósa stated that „intensive negotiations are taking place with affected landowners, and I see that there is a near-agreement for the Hungarian state to acquire ownership of these lands for investment”. However, those we interviewed think it is a strong exaggeration to talk about intensive negotiations, especially in light of the fact that so far they received no official document. „We didn’t get anything. In the autumn, the municipality of Hajdúnánás told us that there would be a meeting we could attend, but not everyone was informed about it, even though their land falls into the MotoGP track ” – one of the farmers mentioned.

This land may also be involved in the investment. Source: author’s own photo

Months of uncertainity

After the forum in autumn, a face-to-face meeting also took place in December. „We sat down at the table with two lawyers, but we didn’t even know who they were, where they came from. At that time, the lawyers stated that affected families have to leave their properties by the end of October and by that time an agreement had to be reached on the lands. “We’re going to have to pack up soon and I don’t even know for how much money, and exactly where I should buy another property” – one local said.

At present, it seems that one of the demands of the landowners would be fulfilled, as Kelet-Magyarország Versenypálya Kft responded to us. They also added that a significant amount of more than 400 hectares of exchange land is available near Hajdúnánás, so they can make fair suggestions for those who want to farm in the future.

We contacted the mayor of Hajdúnánás to ask about the consultations with the landowners concerned. However, we received a rather concise answer to our questions: the mayor stated that „all information related to the MotoGP track is being organized by Kelet-Magyarországi Versenypálya Kft.

The situation of Hajdúnánás is special because after the 2019 local government elections it had 6 representatives from Fidesz and 6 from the  opposition, but this changed with the September 2020 by-elections when Fidesz gained a 7-5 majority. Incidentally, the opposition did not nominate a mayoral candidate in the municipal elections, so only the name of Tibor Szólláth of Fidesz appeared on the ballot paper.

Judit Bódi (president of MSZP in Hajdú-Bihar county, who we also contacted regarding the MotoGP project but despite her promise, she failed to send us a response) said that she thought it would be better for the city to have a Fidesz mayor because this way they could raise funds more successfully. Later, however, she corrected this statement. Incidentally, the name of the Bódi family also appeared in the 2018 Ángyán report among the winners of the state farmland auctions:

Retired government politician says Orban is building a new feudal system

A former state secretary of the reigning political side has compiled a new report on what he claims is a scheme to pass valuable farmland to individuals close to the government.

In addition, the lands of the Bódi family’s company, Tedej Zrt. may also be involved in the construction of the MotoGP track – at least this can be concluded from the words of Lajos Kósa who said that both landowners and Tedej Zrt. have been very positive about the investment so far.

Written and translated by Zita Szopkó. The original, more detailed Hungarian version of this article can be found here.

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