Budapest’s contested contract with Russia’s Metrowagonmash under the spotlight again

By bne IntelliNews June 2, 2016

Hungary may have received new metro cars from Russian subway manufacturer Metrowagonmash instead of the ones that had been sent for refurbishment, local press reported on June 2.

In August, Budapest awarded a €219.1mn contract to Russia’s Metrowagonmash for the modernisation of trains on the Hungarian capital's M3 metro line. It is alleged, however, that to avoid public procurement rules brand new metro cars were sent instead of renovating the old ones.

According to local daily Nepszabadsag’s sources, if the tender had been called for new metro cars, the out-of-date technology of the Russian manufacturer would clearly not have had a chance versus new models of other companies. “The terms of the public procurement could not have been as tailor made [for the Russian company],” the paper wrote.

Besides Metrowagonmash, Estonia’s Skinest Rail also submitted a bid for the renewal of metro cars. However, Skinest Rail was excluded from the tender despite offering a lower price. Skinest Rail filed a complaint with the European Commission against the Hungarian transport operator’s decision, claiming that the eight points cited as reasons to disqualify its bid are formal in character.

Nepszabadsag’s sources claim it was obvious that the deadline for refurbishing Budapest’s metro trains was too tight. They claim that the metro trains that arrived to Budapest last week are completely different from the ones that had been sent for renovation, and Metrowagonmash shipped cars that it already had in store.

Unnamed sources claim that awarding the metro tender to Russia might have been part of a deal relating to Hungary’s Paks II project. Budapest tore up an international tender in January 2014 to hand Russia a €12.5bn contract to expand Hungary's only nuclear power plant. However, questions have recently been asked over the project’s profitability, and there are hints that Russia may pull out of its agreement to lend Hungary €10bn for the project.

Related Articles

Waberer’s finally set to deliver an IPO on Hungarian bourse

Hungarian trucking company Waberer’s International is preparing for an IPO on the Budapest Stock Exchange in July, according to media claims. If accurate, the reports will be hugely welcome in ... more

Hungarian PM's "proxy" moves into the nuclear industry as Paks tenders approach

Firms controlled by Hungarian oligarch Lorinc Meszaros have purchased a 51% stake in the Hungarian subsidiary of Czech nuclear ... more

RBI doubles net profit y/y in Q1 as Russian business recovers

Raiffeisen Bank International (RBI), the second largest bank operating across Central and Eastern Europe by assets, reported that net profit almost doubled year-on-year to €220mn in the first ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss