EU may claw back €300m over Budapest metro fraud

The European Commission’s anti-fraud office has recommended that Hungary repay €300m to the EU after it uncovered "serious irregularities" in the construction of a metro line in Budapest.

The office, which goes by the acronym Olaf, identified issues with the €1.7bn M4 metro line that runs northeast to southwest and connects the centres of Buda and Pest.

According to documents seen by the Politico website, Olaf is recommending that the commission’s directorate responsible for regional and urban policy reclaim €228m and that the European Investment Bank (EIB) be repaid €55m.

Florian Szaloki, Hungary’s deputy state secretary for transport issues, told Politico that the authorities in Budapest had received Olaf’s 104-page report but said it would take months before any decision on repayment was taken.

The EIB said it is considering how to respond to the recommendations from Olaf, and that in the past it has requested repayment of loans when corruption had been uncovered.

Problems have dogged the construction of Budapest’s metro system. The "Green Line" project was opened in March 2014 after a 10-year construction period marked by what one Hungarian newspaper described as "endless failed deadlines and allegations of corruption" as well as a legal battle with train supplier Alstom.

Second and third stage extensions of the line remain undeveloped.

Image: The Metro 4 "Green" line (Simon Trew)

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