The Hungarian head of government just cannot let go. Since previous attempts to bring Budapest Liszt Ferenc Airport under state control* failed, he has now started another assail to force the private operator out of business. His method of threats and intimidation is reminiscent of the infamous raiders attacks on ground handler Swissport in Ukraine in 2014, backed by corrupt judges.
About two years ago, Orbán began launching aggressive attacks on AviAlliance, the private operator of Budapest Airport, owned by the Canadian Pension Fund PSP. His rush forward was aimed at regaining state ownership of the country’s leading aviation hub. To his disappointment, however, the PSP leaders in accord with the AviAlliance management, categorically declared that BUD was not for sale. Firstly because of operational concessions extending until 2080, a bargaining counter worth a lot! And, secondly: their investment was starting to pay off slowly, having concluded a costly refurbishing and modernization program which increasingly put BUD on the map of intercontinental passenger and cargo flights. Yet, Orbán would not be Orbán if he were deterred by such rejections.
Any means will do
Last week, the Chief of State and his political entourage tightened the thumbscrews to achieve their goal, as evidenced by agitator László Palkovics, the government official responsible for regaining control over BUD. Orbán‘s mouthpiece claimed that the airport had not developed since its partial privatization back in 2005, and had failed to do so after 2011, when the government sold its remaining 25% stake to AviAlliance.
Unsubstantiated allegations to build up pressure
However, a closer look reveals how unfounded Mr. Palkovics’ assertions are, because only a year after AviAlliance had taken full control, the investor had channeled 261 million euros into the modernization of the once dilapidated facility. Next example: In 2019, a 50-million-euro state-of-the-art CargoCenter, financed by operator AviAlliance, was inaugurated, upping the airport’s throughput capacity to a total of 250,000 tons per year. Thanks to this future-oriented infrastructure, BUD has good prospects to become Eastern Europe’s prime cargo airport.
The above-mentioned examples, just two out of a dozen of others, very clearly illustrate how infamous Palkovics’ claims are that the airport has not developed under private ownership.
Small “presents“ to best maintain friendship
Instead of making false assertions and igniting smoke grenades, this justification for Orbán's hounding of the airport's private owners would have been more honest: “We want to regain state ownership of the airport by spending as little money as possible for the place, in order to sell the meanwhile refurbished airport with its newly-erected facilities to influential Hungarian financial and political Orban supporters as soon as we have pushed the AviAlliance out for good.” As gratification, so to speak, for the Orbán claqueurs and their political backing of the autocratic head of government since he first came to power in 2010.
Actions that the EU is also fed-up with. In a recent GMX News interview, the German Green MEP, Daniel Freund was exasperated: “Orbán fabricates facts every day. He plunders public property at a speed and on a scale that is hard to imagine. Motorways are being privatized for the benefit of henchmen and social housing is being sold off to his own people at 90 per cent below the market price.”
The airport is just another item on his political shopping list, therefore. Yet, whether he will have the money for it now that the majority in the EU parliament is threatening to cease funds to Hungary, remains to be seen.
Little money for high value
Meanwhile, the government has presented AviAlliance with an offer for the share buyback “well below market price,” according to Bloomberg and local Hungarian media reports, though without revealing figures.
Before the outbreak of the coronavirus epidemic, the value of the airport was estimated at 3 billion euros. The Hungarian portal HVG reported last year that the operating concession could be worth between €1.95 billion and €2.2 billion.
All in all, a lot of money. Orbán wants to reduce these costs by making life as difficult as possible for the operator through bureaucratic hurdles, rigid regulations, and by imposing harassing conditions. The usual torture devices that autocrats prefer when imposing their will on opponents.
Please stay tuned.
*See also: https://www.cargoforwarder.eu/2020/10/11/make-bud-airport-magyar-again/
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