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European Anti-Fraud Office finds serious irregularities in contracts for Budapest Metro Line 4 project 

Alstom-az-M4-es-vonalonHungarian Government has made public the investigation carried out by the European Anti-Fraud Office (OLAF) in relation to irregularities identified in Budapest Metro Line 4 project implementation. OLAF investigations has revealed a conflict of interests in the HUF 22.9 bn contract signed with Alstom Transport, for which a financial correction of 100% should be applied. “There is a serious fraud suspected in the ongoing criminal investigation”, according to OLAF. Multiple situations of conflict of interests were also identified in the contracts signed with Siemens M4 Budapest Consortium.

Budapest Metro Line 4 project is the most expensive EU financed infrastructure development project in Hugary implemented during 2007 – 2013. The total cost of the project amounted to EUR 1.7 billion, of which EUR 679 million were financed under EU’s Cohesion Fund. Two EIB loans also contributed to the project’s financing. More then 100 contracts were signed in the course of the implementation of the project, of which 20 were considered large works contracts.

According to OLAF’s investigation, a series of management irregularities and errors, possible fraud and other offences were identified from the very beginning of the project implementation e.g. lack of necessary professional capacity and conflict of interest related to some of DBR Metro Project Directorate staff and contractors. A significant number of the public procurement procedures were affected by the irregularities, either at the stage of the tender publication or during the procurement evaluation procedure. The total amounts of contracts affected reaches EUR 1 bn (60% of the project’s total cost), while the estimated financial impact by the irregularities is over EUR  664 million.

Read the OLAF investigation published by Hungarian publication Index.hu

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