Government to spend HUF 34.5 billion at Mészáros for water utility development of Samsung factory in Göd

The Samsung SDI battery factory in Göd is turning into one of the largest public money sinks in Hungary, with Lőrinc Mészáros profiting once again. His construction firm is installing water utilities serving the plant for HUF 34.5 billion (EUR 85 billion) of public funds. Despite the massive costs, the project has been delayed, yet the government continues spending billions on it.

For years, we have been tracking how much public money Samsung SDI’s ever-expanding Göd factory is eating up. Tens of billions of Hungarian taxpayers’ money are being poured into road and rail improvements serving the plant, and into ensuring the water and energy supply to the factory – at a time of a spiraling budget crisis that forced the government to cut funding for public water network, road, and railway improvements.

In 2022, we wrote that the Samsung factory and the industrial area of Göd would receive enough water to supply a city with 100,000 inhabitants, 27,000 cubic meters of industrial and drinking water. We also reported that to provide this water, the coastal filtration wells of the southern water base of Vác, which were contaminated and closed 50 years ago, will be reopened on the Danube bank.

Work ongoing in the southern water catchment area of Vác (Photo: by our reader)

These wells have been closed since 1980s, when 860,000 cubic meters of groundwater were contaminated by the incineration of waste from the Chinoin pharmaceutical factory. Although the soil has not been completely remediated, the Danube Regional Waterworks (DMRV) says that some of the wells can be put back into operation, citing tests that show that contaminants are no longer present in the groundwater.

The improvements to the water supply for the Göd industrial area are being carried out by Mészáros & Mészáros Zrt., the family company of Lőrinc Mészáros, the Orbán government’s favorite oligarch.

The cost of the project has been rising steadily over the past few years:

the original government decision in 2020 was for “only” €12 billion, but an amendment raised the figure to €32.2 billion, followed by a further €2.3 billion increase last November. In other words, the Mészáros family is building the Göd battery factory’s water utilities for almost three times the original cost estimate, at 34.5 billion.

The price reflects the massive scope of the project: a 9.6-kilometre-long pipelines transport industrial and drinking water from the Danube bank to the Göd factory, and from there a 12.2-kilometre-long canal carries the 8,000 cubic meters of wastewater per day to the Vác wastewater treatment plant. The route of the pipelines had to be modified following public protests so as not to affect the residential areas of Göd and Sződliget. Instead, he the developers used a natural preserve, cutting down trees and destroying endangered plants.

Part of the Danube bank in Sződligeti has been cleared of vegetation due to the construction of the battery factory’s waterworks. (Photo by our reader)

In addition to the reopened shore-filtered wells, a surface water extraction plant was also built at Sződliget, and a second wastewater treatment plant was built in Vác to cope with the increasing volume of wastewater.

However, water experts say that it is extremely inappropriate, even scary, that a water intake plant has been built on the Danube

only 7 km from the plant discharging industrial wastewater from the battery factory.

Representatives of the waterworks and the Mészáros company said last year at a press conference that the project could be completed by the end of 2024, but this did not happen. The delay also led to additional costs: in November, an additional HUF 3 billion was allocated from the 2025 budget to complete the works.

The battery plant’s permit specifies “only” 7,500 m3 of water per day

While the hydrological permit states that the water supply system will be able to supply up to 29,700 cubic meters of water per day to the industrial area of Göd, the 2023 environmental permit for the battery plant specifies a much lower water consumption figure: according to the document, the plant will require “only” 7,500 cubic meters of water per day.

Benedek Jávor, former Member of the European Parliament, pointed out the discrepancy:

“The difference between the maximum water demand indicated by Samsung and the DMRV’s water permit and the capacity of the water pipeline under construction is more than three times the amount, estimated at 20,000 m3/day. The use of this amount of water is unclear.”

According to Jávor, the information provided by DRMV Zrt., which justified the volume of the investment by the increasing demand for water from the population, is not correct. The water for the industrial area is supplied through separate pipelines, and DMRV had previously stressed that the water supply for the population and the factory is separate, and that the two types of water do not mix.

The construction of the water supply system, which Jávor described as “brutally oversized”, cannot be explained by the fact that the needs of the industrial investments that will be made in Göd, which will be built in the future, were also considered: the sewerage network built as part of the project will lead exclusively to the Samsung battery factory.

However, in 2024, Samsung SDI applied for and received a permit to expand the factory and increase its capacity by 20% – specifically, the government agency amended the factory’s environmental permit, which is currently under legal challenge, to allow the expansion.

The construction of new factory buildings is proceeding apace. Several news portals, including e-cars.hu, have reported that Samsung SDI has raised more than €1 billion in capital to finance a major expansion of the Göd plant and the technological changeover of existing factories.

According to the amended license, the water consumption of the factory will not increase significantly after the expansion, i.e. it will not exceed 7,500 cubic meters of water per day. However, this seems highly doubtful given the scale of the planned capacity expansion.

While the government is allocating billions and billions of public funds to serve the water needs of the Göd industrial area, much less money is being spent on the development of the residential water network. We have repeatedly reported in Átlátszó that the previously promised residential water developments in Pest County have been delayed or failed.

Much less money for residential water network

In December last year, DMRV Zrt. shared the same good news: thanks to EU funding, improvements had been made in 12 municipalities under the KEHOP-2.1.11-21-2022-00005 project. The winner of the public procurement for “capacity expansion” was – almost as a matter of law – Mészáros & Mészáros Zrt., which was able to implement the investments with HUF 15.7 billion (EUR 37.5 billion). According to the water company, this involved the construction of 1 water tower, 2 water storage basins, 1 well and the construction or reconstruction of 12.3 km of water pipelines.

Mészáros & Mészáros Zrt. has built a second wastewater treatment plant next to the existing one to receive the wastewater from the ever-expanding Göd battery factory (Photo: by our reader)

However, these improvements have only marginally alleviated water supply problems in the region. Complaints from residents and posts on DMRV’s social networking site show that technical faults and burst pipes are still very common in Pest County.

This is not surprising, as only a small fraction of the HUF 15.7 billion – barely half of the amount spent on water improvements at the Samsung factory – was used to make the necessary investments.

The total length of the water network operated by DMRV Zrt. is 4,994 km, the sewerage network 3,486 km, and according to the company’s website, 12,771 failures occur each year. According to a study carried out by the Water Coalition on the state of the drinking water networks in 2023, the entire drinking water network of the DMRV would take 345 years to renovate at the current renovation rate.

Mészáros continues to make bank

Financially, 2024 was a terrible year for DMRV. Although its turnover increased from HUF 14.4 billion last year to HUF 21 billion, it failed to make a profit: the company closed 2024 with a loss of HUF 3.1 billion.

But Samsung SDI Hungary Zrt. did not do much better last year based on their annual report. Revenue fell by 27% compared to the previous year, but the fact that the multinational posted a loss of HUF 24 billion last year compared to its HUF 28.5 billion profit in 2023 shows an even more serious crisis. The company is currently seeking to regain success in the European market by changing and expanding the technology of its Göd plant.

However, the owners of Mészáros und Mészáros Zrt. could look forward to another profitable year in 2024. Although last year’s sales revenue of HUF 87.3 billion (EUR 70 million) for the oligarch’s company was down from 119.5 billion in the previous year, and the profit level also fell slightly – “only” 28 billion forints compared to 32 billion for 2023 – the company has no reason to complain.