7days, 2004. szeptember 6

7/28/2019 7Days, 2004. szeptember 6.

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1051 Budapest, Hercegprímás utca 19 Tel: 354 3290 Fax: 354 0130 Mail:[email protected]

30.08.2004.BUSINESS OMV not among MOL gas bidders

Trade union demands Ft 60,000 minimum wageNew Nokia plant completedArchiCAD 9 to be shipped in mid-SeptBumper year for cornRobust to produce 1 mln LCD TVsMalév reports lower losses in H1Olympics help public TV beat commercialMOL: Gazprom, Gaz de France interestedHungarian product grand prix awardedWienerberger builds brick factoryHungary's 1st wind energy parkMcHale to buy MezogépCircus publishes reconstruction tender30 day suspension of Brau share tradingMore and more welcomes for EuroEasyJet starts Budapest-Dortmund flight

Economics Gov't approves Bill on 2003 BudgetRetail lending rates fall 35 b.p.EU citizens eligible for housing subsidies

Mrkt's bad reaction to lengthy gov't changePolitics Socialists Select Gyurcsány as new PMSZDSZ: PM resigned in self-interest

Domestic Majoros wins gold in men's 55kgHungary Risks Losing 2nd Gold MedalConscripts to be discharged in Nov Jewish Summer Festival opens Sat.

31.08.2004.Business Fuel prices to drop tomorrow

Explanation requested for Brau lossesUkraine's NAK joins MOL biddingFt 1.5 bln warehouse finishedNumbers up, profits down

Papa CEO sells his company stakes Three banks in bidding for JubankaEx-gov't spokesman resigns from TVKaiser Ft 1 bln meat plant ready2 more investment firms blacklistedH&M comes to BpMÁV,DAM Steel cross swordsKesz heads eastDagály Ft 3.5 bln developmentSynergon awarded new titleM6 motorway details announcedHolcim eyes oraganic wastePaks nuclear plant at 90% of capacity

Economics 3.9% growth forecast for Q2FM appoints gov't reforms commissioner

Politics Fidesz posts best result in pollGyurcsány still mum on DraskovicsGyurcsány meets with 4 ministers

Domestic Metro plan pushed back a yrFascist posters removed l

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01/09/2004Business Pannonpower starts up biomass block

IKEA sales up 20% yr/yrPM did not ask minister to revise M6 tenderEmerson procurement center for BpVideoton Ukraine boundUPC fixed line phone servicePhilips shuts down Szombathely PlantPápa car safety component plant enlarged Tender out for HollóházaRenovated spa to reopenMineral water H1 sales up 8% yr/yrPaks to return to full capacity soonGraphiSoft buys own sharesMalév hikes jet fuel surchargeDeep-freeze fire put out after 8-days

Economics 2003 budget bill before parliamentFHB Bank cuts interests on loans

Industrial production prices upEconomic confidence downEconomy climbing, driven by exports

Politics President Madl to nominate PM Sept 27Six candidates in race to chair MSzP

Domestic Heating fees to go up by 7.4%Gyurcsány to Review Iraq MissionMedgyessy decorates a Hungarian thinker

02/09/2004Business Erste and Postabank merger registered

Trade union demands Ft 60,000 minimum wageNew Nokia plant completedArchiCAD 9 to be shipped in mid-SeptBumper year for cornRobust to produce 1 mln LCD TVsMalév reports lower losses in H1Olympics help public TV beat commercialMOL: Gazprom, Gaz de France interestedHungarian product grand prix awardedWienerberger builds brick factoryHungary's 1st wind energy parkMcHale to buy MezogépCircus publishes reconstruction tender

30 day suspension of Brau share tradingMore and more welcomes for EuroEasyJet starts Budapest-Dortmund flightEuro 10 mln renovation of hotel planned

Economics Gyurcsány vows to keep econ. policyMKB's Ft 100 billion note program

GDP growth slows for 1st time in yrHungary's PMI up in AugustAKK accepts only a fraction of offers

Politics Polgár becomes new foreign affairs spokespersonMedgyessy to leave for Italy, Brussels

Domestic World microsurgery congress in Debrecen1st "wine village" kicks off Sept.9

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03/09/2004Business Heineken to submit Brau offer price formula

World's biggest seed factory opens TriGránit eyes Bulgarian real estate4 companies win Ft 400 mln in grantsMÁV to save Ft 12.5 billionCredit Suisse to buy ARAG accountsConcrete block plant opensParmalat liquidator sells off propertyBetonút signs contract on Mon 6Int Min suggests Volan bus transferK&H offers new package to SMEsLe Belier expands in SzolnokState takes over Bábolna loans by Sept endUPC launches cable telephone servicesInvestkredit comes to HungarySopron's Ft 4.9 bln sewage project

Economics Mines produce 13,300,000 tons of coalGovernment to cancel foreign debtHousing plan for the youthStudent Loan Center

Politics 5 MPs eyeing MDF chair excluded from groupForeign and security policies-no changeDomestic Scandal at PSZÁF

Hungarian - Chinese bilingual school opensPolice suspect mafia in arson caseBuda Castle and Vienna Burg cooperate

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30/08/2004BusinessOMV not among MOL gas biddersA spokesman for Austrian oil and gas company OMV, which owns 9.1% of Hungarian oiland gas company MOL Rt, has said OMV had not submitted a bid for MOL's gas divisions. The spokesman said OMV "had enough in the pipeline already". The spokesman addedthat the company is satisfied with the present situation, when asked whether thecompany planned to boost its stake in MOL. MOL will announce the number of bids after a

board meeting on September 2. Hungarian daily Népszabadság reported on Friday that ithad learned MOL had received several bids. Russia's Gazprom, Germany's Ruhrgas, OMVand Gaz de France had all requested access MOL's data room. The deadline for biddingwas Thursday (Econews; Ng 7, MH 9, Vg 13)

Chains protest at bag and bottle taxRetail chains Auchan Hungary Kft, Cora Hungary Kft, Tesco Kft, Plus Discount Kft, SparHungary Kft and wholesaler Metro Kft are protesting against the planned amendment tothe Environmental Product Fee Law in a joint written statement, according to unnamedsources. The chains claim that the planned changes regarding non-refundable plasticbottles and plastic bags, if accepted, will cause price increase. Changes are aimed atreducing plastic waste by imposing a considerable tax on plastic bags and setting outthat companies should change at least 30% of non-refundable plastic bottles torefundable ones in a year. (NG 1) R.G.

PSzÁF approval of buyout rejectedA court has blocked market watchdog PSzÁF's approval of a public purchase offer bybrewery Amstel Rt for shares in peer company Brau Hungária Rt, lawyers for the privateBrau shareholder who filed the suit announced on Friday. The shareholder had arguedthat the price Amstel offered for the Brau shares was far too low. Market observers notedthat although the offer was in line with the law, it was a little less than half of the realisticmarket price. The court's decision is legally binding and may not be appealed, meaningPSzÁF will be forced to consider the buyout again and withdraw its approval of the deal.(Econews; Ng 8, Vg 13)

Videoton closes Kumhegyes factoryElectronics producer Videoton Holding Rt has closed its speaker factory in Kunhegyes,east Hungary. Videoton used to produce in the factory for six years and the factory had tostop after the bankruptcy of a foreign partner. Videoton hired more than 200 employeesin Kunhegyes, but orders have gradually declined. Videoton, nevertheless, continues talkswith another company in the region to offer new jobs for 150 former employees. (Nb 13)M.K.

One yr ban for fake wine producersParliament will soon discuss a new bill on the punishment of firms that produce fake wine,MP of the Hungarian Socialist Party (MSzP) István Göndör said. Parliament has recentlyabolished the wine registration law, which obliged restaurant owners to keep a daily

register of wine consumption, because restaurant owners complained of too much extrawork due to the regulation. Now, Parliament wants to carry out stricter check-ups with theinclusion of National Wine Quality Institute and wine production firms failing the testsmay be closed up to one year, Göndör said. (Vg 4) M.K.

Bábolna to be liquidatedState-owned agricultural firm Bábolna Rt will be liquidated without a legal successor, thecompany said. Bábolna has a total debt of Ft 30 billion. The liquidation will start onSeptember 1, debtors may submit their demands to the liquidator Reorg Rt fromWednesday. The company's profitable food production part will further operate under thename Bábolna Food Industry Rt. Bábolna could not yet say how many employees couldcontinue their work at the profitable Bábolna branch. (Vg 5) M.K.

Austrians buy office complexSparkassen Immobilien AG, a company listed on the Viennese stock exchange has boughtMaros Utca Business Center, an office complex in Distr. 12 of Budapest for Euro 12.5

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million, announced real estate consultancy DTZ Hungary Kft. Sparkassen Immobilien AGexpects an annual 9% yield from the center. The 9000 sq m complex was built in 1992 bySwedish developers. Its occupancy rate is continuously around 100%. (MH 13, NG 16) R.G

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Merkantil H1 profit of Ft 2.49 blnOTP's Merkantil group, along with its ten subsidiaries and seven project companies hadcombined after-tax profit of Ft 2.49 billion in H1 2004, up 87.5% yr/yr. The group hadcombined total assets of Ft 203.4 billion at the end of June 2004, as against Ft 150.8billion a year earlier. Chairman-CEO Adam Kolossváry said on Friday. The group's carfinancing division signed 30,749 new contracts in H1, up 18.4% yr/yr, worth Ft 48.848billion, up 40%. Forint-denominated car loans accounted for just a tenth of all of Merkantil's car loans, even less than a year earlier. (Econews; Ng 5)

6 through to next round of tender6 construction companies, Magyar Építo Rt, Arcadom Rt, Strabag Rt, KÉSZ Kft, Market Rtand Középületépíto Rt can enter the next phase of the tender announced for theconstruction of the National Bank of Hungary's new logistics center in Soroksár, South of Budapest. Porr AG was disqualified from the tender while Vegyépszer Rt and Hídépíto Rtwere not invited into the next round. The 12,500 sq m complex will be built with aninvestment of Ft 10 billion. (NG 4) R.G.

Equis launches real estate serviceEquis Corporation has launched a project services program for companies seeking tolocate and build facilities in Central and Eastern Europe. The new service was announcedby Valter Kalaus, vice president and head of Equis' Budapest office since 2001. SinceHungary joined the EU in May, banks and other businesses have sought to build andexpand throughout the country, Kalaus said. "Now we will be offering project services asa special service in Hungary, the only real estate firm in the country doing so." Kalausexpects the new service will be valuable to banks and other types of businesses includingmanufacturing, call centers, and back offices and multi-national companies. (BU.S.INESSWIRE; Ng 5)

BUX inches up to new peak The Budapest equity market's BUX index edged higher to new peaks on four days thisweek, reaching an all-time high of 12,070.48 on Friday, up 0.83% over the week.Investors appeared not to be shaken by Prime Minister Peter Medgyessy's surpriseresignation on Wednesday and the announcement of his replacement, millionaire-

businessman-turned-politician Ferenc Gyurcsány. However, turnover for the week waslow. At Ft 30.8 billion, it was less than the previous four-day week's Ft 38.2 billion.Hungarian Oil company MOL Rt saw the most activity during the week, with trades worthFt 13.47 billion. (MTI; Ng 7)

GraphiSoft buys own sharesAfter three years, software developer Graphisoft Rt. again bought 51,097 of its ownshares at Ft 1,370 price apice on Friday, the company announced. The company boughtthe shares because it offered a share option program to its management and members of the board in July. In scope of the program most of the shares can be called in in 2 years'as the earliest, while 117,000 shares can be exercised immediately. Graphisoft closed atFt 1,350 per share on Monday. (NG 7) R.G.

New Pécs Vienna InterCity The first InterCity train offering a direct connection between Pécs, southern Hungary, andthe Austrian capital, Vienna, will start running on December 13 of this year. Running timeis expected to be around six and a half hours, while ticket prices will be around Ft 3,000. The Corvinus InterCity will have one car for first-class ticket holders, and two for second-class passengers, and the train is scheduled to call at Sopron, Szombathely, Nagykanizsa,and Kaposvár, among others. (Nv 14) P.O

KÉSz starts Szeged office buildingConstruction company KÉSZ Kft has recently started the construction of a 5,235 sq moffice building for Lombard Leasing Rt in Szeged, South Hungary, the companyannounced. The five-storey building, which is being built with an investment of Ft 1.2

billion, will also house an underground parking lot. KÉSZ Kft's other assignmentsnowadays include the construction of two new Tesco stores in Kalocsa for Ft 950 millionand in Kiskorös for Ft 894 million, both in Central Hungary. (NG 16) R.G.

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Storage fire damage over Euro 4 mln The fire, which has been raging in the cold storage plant of Zalaegerszeg since Tuesday isestimated to have caused damages exceeding Ft 1 billion, the National DisasterManagement Center spokesman, said on Friday. "The smoke billowing from the plant hasan abominable smell but poses no hazard to the local population and gives no reason forevacuating anyone from the city," Tibor Dobson said. The 20x70-metre warehouse still inflames contains tons of deep-frozen ducks, which will be transported to an incinerator, hesaid. (MTI; Nv, 16, Nb 20)

Toxic Brazilian paprika discoveredRepresentatives of the State Public Health and Medical Officer's Service (ÁNTSz) foundsixty tons of contaminated ground paprika in two processing facilities in Bács-Kiskuncounty, commercial television channel RTL Klub reported. The paprika was imported fromBrazil, but it has not been processed or put on the market. The ÁNTSz specialists imposedan embargo on the goods, and ordered the companies to either ship the paprika back toBrazil or destroy it as soon as possible. (MH 5) P.O.

High speed Vác connectionHungarian railways MÁV Rt has cut the running time of its suburban railway connectingVác to the capital from 45 minutes to 25, as part of an ambitious overhaul of thecompany's suburban railway services. The calculated and zonal transport system willenable trains to depart at the same time every hour, and run without stops, cutting therunning time considerably. More than 6 million people commute between Vác andBudapest every year, and MÁV wishes to lure away many of them from other transportcompanies. MÁV plans to manage 458 suburban railways instead of the current 271 from2007. (MH 10) P.O.

EconomicsGyurcsány calls for stable econ growthPrime Minister designate Ferenc Gyurcsány has said he wants to see Hungary's economicgrowth rate stabilized at the current level or slightly higher. Speaking to MTI on Friday,Gyurcsány said the country's current growth rate was just over 4% and "could bestabilized at this level or slightly higher," generating Ft 800 billion-900 billion a year in

national revenue, he added. Such a growth rate would lead to greater economic balance,he said, "keeping us from spending much more than our inflows, while leaving us withfunds to for a vigorous welfare policy." (MTI)

Market for house brands growsAccording to a survey prepared by economic research institute GfK Hungária Kft,households will spend around Ft 400 billion on stores' own house brands in Hungary in2004. Households spent Ft 310 billion on house brands in 2003, up from Ft 252 billion theyear before. House brands accounted for However house brand sales are growing inHungary. According to the GfK survey, the most popular house brands are food, followedby household cleaning products. (Econews; Ng 5)

Politics"Kovácsism" to end The Hungarian Socialist Party (MSZP) opens a new chapter in its history with its chairmandeclining to run for re-election in October, the party's deputy chair said yesterday.Speaking on Hungarian public television, Katalin Szili, who is also speaker of Parliament,said an era of "Kovácsism" will end after MSZP chairman and Foreign Minister LászlóKovács steps down, to leave for Brussels as Hungary's EU commissioner. Kovács andother leaders of the senior ruling coalition MSZP had to swallow a bitter pill administeredby the rank-and-file of their party when an extraordinary convention on Wednesdayelected businessman-turned-politician Ferenc Gyurcsány as prime minister candidate bya wide margin over the party elite's nominee Péter Kiss. (MTI; MH 4, Nv 3)

Better MSzP and gov't links pushed

Leaders of the ruling Hungarian Socialist Party (MSzP) on Saturday dismissed conspiracytheories about the government change and said that the main challenge for the party inthe coming period was to improve coordination with the government. Former prime

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minister Gyula Horn called for a new kind of political style. "I am not afraid for the party;I've seen worse times for us. It makes me optimistic that Socialist politicians are nowdetermined to make changes," he said. (MTI; Nv 3, MH 4)

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DomesticGergényi will not head ORFK Interior Minister Mónika Lamperth decided not to appoint Budapest police chief PéterGergényi to become head of the National Police (ORFK). National Police chief LászlóSakgó resigned some weeks ago to pursue a diplomatic career. Previously, Prime MinisterPéter Medgyessy said he would prefer Gergényi to head ORFK, but according to law theNational Police chief must hold a university degree and Gergényi only has a college one.Currently, police generals István Ignácz, József Bencze or László Ferenczi may be selectedto lead ORFK. (Nb 8) M.K.

Hungary claims men's water polo goldHungary defended men's water polo Olympic title by beating Serbia and Montenegro 8-7yesterday. Gergely Kiss led the Hungary team with four points in his six shots, TamásKasas added two. "To win two consecutive Olympic golds is wonderful," said DenésKemeny, head coach of Hungary. Aleksander Sapic scored two points for Serbia andMontenegro. Hungary claimed the title at 2000 Sydney Olympic Game. Early yesterday,the host Greece was defeated by Russia in the bronze medal play-off. (XIN)

Jewish Summer Festival opensSorrow and joy - this is the central message of the 7th summer festival celebrating Jewishculture in Budapest and seven Hungarian cities over the next week. "We are overjoyed,

because we celebrate Jewish culture, and we are full of sorrow, because this year was the60th anniversary of the Holocaust," the president of the Hungarian Jewish organization(Mazsihisz), Gusztav Zoltai said at the festival opening event in Budapest yesterday. Theweek-long festival started Saturday night with Hungarian composer Tamás Wolf's Örömes Banát (Joy and Sorrow), a concertino for flute and string orchestra, dedicated to theNobel peace prize laureate Hungarian-born Holocaust survivor Elie Wiesel. (MTI; Nv 6)

31/08/2004

BUSINESSFuel prices to drop tomorrowHungary's leading fuel distributor Hungarian Oil Company MOL Rt, will reduce petrol anddiesel prices by Ft 3 tomorrow, September 1st, the company said in a statement. The

move follows a fall in international crude prices triggered by greater Iraqi exports, MOLsaid. As market volatility remains, short-term price movements are seen as possible inboth directions, the statement added. From Wednesday on, 95-octane petrol will cost Ft247.50 per liter and the price of diesel will drop to Ft 229 per liter. (MTI; Nv 1, Ng 3, Vg 5,Nb 15)

Explanation requested for Brau lossesInvestment company Concorde Holding Rt, which is a small shareholder in brewer BrauUnion Hungária Rt, has requested Brau to explain an 83% yr/yr decline in its pre-tax profitin the first half to Ft 390.7 million, Concorde said yesterday. Concorde suggests in theannouncement that Brau suffered financial losses on contracts it signed with otherHeineken group members. Brau Union Hungária's parent company, BB AG of Austria, waspurchased by Heineken a year ago. (Econews; MH 1, Nv 5, Vg 9, Ng 11)

Ukraine's NAK joins MOL biddingNAK Naftogaz Ukrainy said it will bid for natural-gas transmission and storage units of Hungarian Oil and Gas company MOL Rt while Austria's OMV AG said it's not interested ininvesting in any of the four MOL companies for sale. Naftogaz, which transports 80 % of Russia's gas exports to Europe, wants to use the Hungarian companies as steppingstones for further expansion, Chief Executive Yuriy Boyko said. Naftogaz is Ukraine'slargest natural-gas company. MOL is focusing on selling refined oil products in EasternEurope where economies and demand are growing faster than in the West. (Bloomberg;Nv 5, Vg 10, Ng 11)

Ft 1.5 bln warehouse finished

The Waberer's Group announced yesterday the start of construction of a Ft 1.5 bln,15,000 square meter warehouse at the Budapest Intermodal Logistics Center (BILK), inwhich it owns a majority stake. BILK is located in Soroksar, south of Budapest. Work onthe warehouse will finish in March of 2005, according to the announcement. The general

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contractor for the warehouse is Market Épitó Kft, which won the contract in a closedtender. (Econews; Ng 4, Vg 7, Nv 10 )

Numbers up, profits downAccording to preliminary figures, the number of tourist accommodated at Budapest hotelswas up 15% in the summer months compared to last year, a growth partly backed by theincreasing popularity of budget airlines, said Ákos Niklai, chairman of the HotelAssociation of Hungary. Profits, on the other hand, slipped in the same period as hotels'

per-room revenues plunged 20% on rising costs, Niklai added. This summer, Hungary wasmost popular, as always, with Germans, but more visitors came from the US, Japan andIsrael. The prime destination continues to be Budapest and the Balaton area. (NG 1) S.F.

Papa CEO sells his company stakesIstván Móczár, outgoing chairman and CEO of meat producer Pápa Hús Rt has sold hiscompany stakes to Goldsun Cold Storage Rt and Carnex Kft, the company confirmedyesterday. Pápa was privatized in 1993 and is currently 43% owed by foreign investors,10% by employees and 56% by Iványi and Partner Kft. The latter had been co-owned byMóczár. The meat producer has seen hard times in recent years with revenues on asteady decline since 2001. Last year, Pápa had pre-tax profit of Ft 240 million on sales of Ft 20 billion. (Ng 1) S.F.

Three banks in bidding for JubankaIn addition to OTP Rt, the French bank Societe Generale and Alpha Bank of Greece havesubmitted bids for an 88% stake in Jubanka of Serbia and Montenegro, whic is up forprivatization, Serbian Finance Minister Mladjan Dinkic said in Belgrade yesterday.Originally eight banks had expressed interest in the bidding for Jubanka, but only thesethree submitted bids by the August 27 deadline, Dinkic said. The winner of the bid will bechosen by the end of the year, according to plan. (Econews; Nv 5, Vg 10, Nb 15)

Ex-gov't spokesman resigns from TVEx-government spokesman turned news channel manager Gábor Borókai submitted hisresignation to Hír Televizió yesterday, the station said. The management of the center-right station said it had "accepted Borokai's resignation and thanked him for the work he

did." Borókai was spokesman for the center-right Fidesz government that held office inHungary from 1998 to 2002. He was unavailable for comment on the reason for hisresignation. News channel Hír TV began broadcasting in late 2002. (MTI; Nv 3, Ng 4)

Kaiser Ft 1 bln meat plant readyKaiser Food has finished renovating its two meat processing plants near Gy?r at a cost of more than Ft 1 billion, marketing manager Éva Penzes said yesterday.. The renovationadded another 1,200 square meters of production space at the sites and included workon refrigeration systems and waste water management systems. Kaiser Food hadrevenue of Ft 4.4 billion in 2003 and, and due to the ongoing renovation, expects to boostturnover by a modest Ft 80 million this year, selling 5,650 tons of meat products, up from5,600 tons a year earlier. (Econews; Ng 4, Vg 7, Nv 10)

2 more investment firms blacklistedFinancial market regulator PSzÁF has blacklisted two more investment companies, whichare operating outside of PSzÁF's regulatory scope, PSzÁF said. The two companies areBernard Simpson and Whitman Pearce es Tarsai. The other companies on the list areCambridge Global, Bowen Reece, Livingstone Asset Management, KRD Europa and AstralEuropean 2002. All five firms are based in Budapest. PSZAF noted that the companies areoperating without licenses and are not covered by the National Investor Insurance Fund.(Econews; Ng 3, Vg 9)

H&M comes to BpSwedish design company Hennes & Mauritz (H&M) is to open its first fashion store inHungary next fall. The largest European fashion distributor opened its 1000 th store last

week in France, Hungary will be the 22nd country in which it has established retailoutlets. H&M's first shop will target downtown Budapest, the company plans to extend to

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the rest of the capital and other major Hungarian cities thereafter. Apart from clothes, italso sells cosmetic produts in most of its European stores. (Ng 5, Vg 7) E.C.

MÁV,DAM Steel cross swordsDespite plans, Ukrainian-Swiss consortium Donbass-Duferco did not sign the agreementon the purchase of DAM Steel Works' assets yesterday because of a prosecution initiated

by MÁV Rt in connection of a previous transaction between MÁV and DAM Steel. MÁVclaims that its castoff, rundown cars were sold to DAM Steel last year at an unreasonablylow price which caused MÁV Rt billions in losses, according to unnamed sources. MÁVdeclined to comment on the issue. (MH 11) R.G.

Kesz heads eastOne of Hungary's largest construcion companies, Kesz Kft, has won new orders inRomania worth nearly Ft 1 billion. The company had an income of Ft 34 billion last yearand now has acquired half a dozen projects in Romania. Its Romanian subsidiary, S.C.Kesz s.r.l., recently started the construction of factory in Torda, Romania for Rigips, aplasterboard and false ceiling production company. Kesz Kft, which is soon to convert toRt, is expected to have an income of over Ft 40 billion this year with more than Ft 2.5billion after taxes profit, where 10% of its turnover comes from state orders, the rest are

from private contractors. (VG 7) E.C.

Dagály Ft 3.5 bln development The Budapest Thermal Spa Rt decided to reconstruct the Dagály Pool in Budapest's Dist.13, planning to create the capital's first water theme park, announced the company'stechnical director Tibor Rák. Reconstruction costs are estimated at Ft 3.5 billion, the totalamount of which is not yet raised, Rák also added. If the finances are settled and themunicipality of Distr. 13 gives its consent to the project, works will start in the beginningof next year and should finish in 2 years. (Nv 12) R.G.

Synergon awarded new titleSynergon Rt has been awarded the title of 'systems integrator' by IBM, the Hungariancomputer services company announced yesterday. As the highest of its kind, the title willallow Synergon to buy UNIX-based servers and storage systems directly from, and formcloser partnership ties with IBM in the fields of trade and marketing. (NG 11) S.F.

M6 motorway details announced The Ministry of Economics and Transportation announced yesterday the details of atender to build a 57-kilometre stretch of the M6 motorway between Érd and Dunaújvárosand operate it for 22 years. The tender winner, M6 Duna Autopalya, a consortium of Austrian and German companies, including Bilfinger Berger BOT, Porr Infrastruktur andSwietelsky International Baugesellschaft, was announced on August 6. Pendingparliamentary approval, the Minister of Economics and Transportation is due to sign a 22-year concession contract for the private public partnership (PPP) project with the tenderwinner by September 30. (Econews; Vg 4)

Holcim eyes oraganic wasteCement production company Holcim Hungaria Rt. is intersted in using organic waste asits source of energy. In preliminary tests, the Swiss firm's Hungarian subsidiary burnt 250tons of organic waste recently in Hejocsaba. They conducted a detailed research on theeffects of the use of this alternative fuel source on the environment and concluded that ithad a normal level of carbon-dioxide emission. Two power plants in its neighbourhoodowned by AES Corporation have been using organic waste efficiently as a supply of energy. (Vg 8) E.C.

Paks nuclear plant at 90% of capacityBlock two at Hungary's lone nuclear power plant, knocked offline over a year ago by aserious incident, is now operating at 90% of capacity, the facility management said

yesterday. The block, located in Paks, was re-started a week ago with permission fromthe National Atomic Energy Agency, and all of its systems are being tested. Themanagement hopes to see it in full operation by the first few days of September, aftercareful scrutiny at the current level. (MTI; Nv 5)

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ECONOMICS3.9% growth forecast for Q2Experts forecast GDP growth in Q2 around 3.9% in a survey carried out by Reuters. Otherforecasts range between 3.6% and 4.2%. GDP growth in Q1 was 4.2%. According toeconomic research institute Ecostat's Szabolcs Erd?s, GDP growth between April and Julyis 3.6%. His cautious prognosis is explained by slackening consumption growth in thesecond quarter and the fact that real wages increased only by 0.3% in H1 yr/yr. Accordingto his estimate the growth in the volume of investments in Q2 is only 10% compared tothe 19% in Q1. (MH 1) R.G.

FM appoints gov't reforms commissionerFinance Minister Tibor Draskovics announced yesterday that he has named acommissioner to coordinate reforms underway on the various fields of the general

government, the ministry said yesterday. Draskovics appointed Zsolt Arádi, a departmenthead at the Finance Ministry, effective August 23, according to the statement. Arádi hasthe task of organizing a system of collecting information needed to adjust state financingto performance and tasks, in line with the government's efforts to make the statecheaper and more efficient. (Econews; Ng 3, MH 9)

POLITICSFidesz posts best result in pollA poll conducted in mid-August, before the government crisis, yielded the worst resultsfor ruling party MSzP and best of the year for the senior opposition Fidesz party, anational paper said yesterday. Népszabadság quoted the results of polling agency SzondaIpsos, giving Fidesz an 11% advantage amongst people of voting age. Fidesz scored 33%,

while MSZP was on 22%. Among decided voters, MSZP's share fell to 36%, 2% down from July, whereas Fidesz was supported by 53%, up 3%. Only 14% of those asked thoughtthat MSZP could win the general elections if they were held the following Sunday, while59% saw Fidesz as certain to win. (MTI; MH 4)

Gyurcsány still mum on DraskovicsWhen asked yesterday whether Finance Minister Tibor Draskovics would keep his post,Prime Minister designate Ferenc Gyurcsány told reporters that "we will place theemphasis on continuity and stability in economic policy and on dynamism in socialpolicy." Gyurcsány then clearly outlined his priorities over the next month: first to discussthe program, second to address structure, and only then to talk about personnel.(Econews; Nv 5)

Gyurcsány meets with 4 ministersPrime Minister designate Ferenc Gyurcsány met with four cabinet ministers in Budapestyesterday, but declined to respond to media questions about whom he plans to keep on.He reiterated that the main topic for coming weeks would be how to make life easier forthe people. "We need to find the appropriate structures to do that, and once we have thatball rolling, we can get to the media's favorite question, which is the names of the cabinetmembers," he said. Gyurcsány met with Defense Minister Ferenc Juhász, AgricultureMinister Imre Németh, Education Minister Bálint Magyar, and IT Minister Kálmán Kovács.(MTI; Vg 5)

DOMESTICMetro plan pushed back a yr

The first section of Budapest new fourth metro line is now expected to be completed bythe end of 2009 - a year later than originally planned, project manager László Gulyás tolda committee of the Budapest City Council yesterday. Gulyas said the second section of the new line would be completed by the end of 2010. The City Council of Budapest will

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not hold a meeting today to give the final go-ahead for the start of construction asplanned, because of more lawsuits filed by environmental groups. (Econews; Ng 3, MH 5,Vg 5)

Fascist posters removedAn extremist right-wing group calling itself Association for the Hungarian Future pastedposters with symbols similar to those of wartime Hungarian Nazi party, the Arrow Cross,around Budapest's Grand Boulevard yesterday. The posters were aimed at recruiting new

members to the group and were citing slogans of Ferenc Szálasi, leader of the ArrowCross Party, who was executed after WWII. The police have not decided yet on aninvestigation as the symbol used is not exactly the same as the outlawed original one,but strongly resembles it. The posters were removed by late afternoon. (MH 1) R.G01/09/2004

BUSINESSPannonpower starts up biomass block Pannonpower Rt put its new Ft 8.86 billion, 49.9 MW-capacity biomass block on lineyesterday, the company said. The block, one of four, was refitted with technology fromKvaerner Power Oy of Finland, to burn wood chips. The wood chips are being provided byforestry companies Somogyi Forestry and Timber and Mecseki Forestry, with whichPannonpower has ten-year contracts. Pannonpower said the block, whose boilers operateat 90% efficiency, would generate 357.9 GWh of electricity in 2005. (Ng 5, Nv 5, Vg 7, MH9)

IKEA sales up 20% yr/yr The Hungarian subsidiary of home furnishings company IKEA had revenue of Ft 26.1billion in its financial year ending on August 31, 2004 up 20% yr/yr, CEO Cedomir Jankovicsaid yesterday. He added that the Hungarian subsidiary's turnover is expected to growfaster than that the of the parent company's in the 2004/2005 financial year. IKEA storeshad 4 million visitors in the past twelve months, up 10% yr/yr. Around 1.65 million peoplemade purchases, up 17% yr/yr. (Econews; Ng 4, Nv 5,Vg 8, MH 10)

PM did not ask minister to revise M6 tender

Economics State Secretary Gyula Gaál has insisted that, contrary to press reports, PrimeMinister Péter Medgyessy did not ask Economics Minister István Csillag to launch aninquiry before announcing the outcome of a tender invited for building a section of motorway M6. According to press reports, Medgyessy found it too risky for the section tobe constructed by M6 Duna Konzorcium, the lowest bidder. The press reports said thepremier had asked Csillag to carry out an inquiry, but the minister had refused and simplyannounced the result instead. (MTI; NG 3, Nv 5,Vg 5, MH 9, Nb 15)

Emerson procurement center for BpEmerson Process Management (EMS), the US supplier of process automation services andtechnologies, is set to open its CEE regional procurement center in Budapest, EMS's localsubsidiary said. The office will be set up to seek out potential suppliers to EMS's regional

affiliates and will be headed up by Ferenc Sz?cs, former executive of Fisher RosemountHungary Kft. The EMS Group operates three plants in Hungary: Székesfehérvár-basedFisher Rosemount Hungary Kft, Brooks Instrument and an engine manufacturing plant inIklád, with combined revenues of Ft 13.5 billion last year. (NG 1) S.F.

Videoton Ukraine boundVideoton Rt is about to set up a plant in Ukraine, CEO Ottó Sinkó said. The company'smain profile is the assembling of electronic appliances. The main reasons for the decisionwere lower wages in the region and investment costs. These enable more orders to bewon. Setting up the new unit will cost about Ft 100 million. Meanwhile the company'sKunhegyes plant (Eastern Hungary) had to be closed recently because of decliningcompetitiveness of domestic assembly units. (Vg 1) G.R.

UPC fixed line phone serviceCable operator UPC Hungary Kft will launch a fixed-line phone service from Sept 2. Withthe use of the cable-based Voice over Internet Protocol (VoIP) technology UPC's tariffs can

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be as much as 67% lower than the tariffs of other companies. UPC will first offer theservice to its 300,000 Budapest subscribers, but it plans to expand the service to all its800,000 subscribers in the country in the near future, Communications Manager LászlóSz?cs said. (MH 10 Nv 10) G.B.

Philips shuts down Szombathely PlantPhilips is in the final phase of shutting down its monitor manufacturing plant inSzombathely, western Hungary. The plant was set up in 1993 in a greenfield investment

and put out a total 13 million monitors until May 2003, when, in a restructuring push, theplant's CRT production was moved to China. Meanwhile LCD manufacturing has also beengradually relocated to the electronics maker's Székesfehérvár plant leaving a possible800 workers laid off, although some of whom will be redeployed to Székesfehérvár. (NG4) S.F.

Pápa car safety component plant enlargedHirtenberger Automotive Safety car industry unit of Austrian Hirtenberger AG startedsecond phase of its investment in Pápa (North-Western Hungary). The company plans toenlarge its plant to 3400 sqm. Also two new production facilities will be introduced at theHungarian subsidiary Precision Technology Works Hungary Bt (PMH), general manager Tivadar Üveges said. The company will invest Euro 9 million until the end of 2006 in total

while increasing the number of employees to 300. The company produces pyrotechnicalcomponents for car safety systems. (Vg 8) G.R.

Tender out for HollóházaOne month after the official announcement, Hollóháza Porcelain Rt was finally put out totender by State Privatization and Holding Rt yesterday. Investors can hand in bids in apublic tender to acquire a 72.64% stake in 225-year-old porcelain maker. AilingHollóháza, which has a nominal value of Ft 673 million, saw its sales falling in the past 2years due to weak tourism and growing competition and was bailed out by the LaborMinistry in July when it was granted Ft 30.5 million to retain 110 jobs. (Ng 4) S.F.

Renovated spa to reopenAgárd Thermal Bath will reopen on Sept 3 in Gárdony, central Hungary. During the Ft 2.1billion investment the bath was completely renovated and expanded with a new6,800sqm building. The municipality of Gárdony won a Ft 560 million grant from theSzéchenyi plan for the reconstruction. The bath will open for the public after a trial periodof one week. (Nv 5) G.B.

Mineral water H1 sales up 8% yr/yrMineral water sales in H1 2004 rose 16% yr/yr in volume terms and 8% yr/yr in terms of value, according to the latest survey by market research firm GfK Hungária Kft. Thesurvey showed that 78% of households purchased mineral water during H1 2004,compared to 72% in the same period a year earlier. Purchases were also more frequent,with respondents saying they had purchased mineral water nearly every other week in H12004. The survey revealed that 33% of mineral water purchases are made in discount

stores, 27% in hypermarkets, 15% in supermarkets and 20% in small shops. (Econews;Nv 5, MH 10, Vg 12)

Paks to return to full capacity soonBlock II of the Paks nuclear power plant will resume commercial energy production in afew days, Paksi Atomeromu CEO István Kocsis said yesterday. The reactor was shut downin April 2003 after fuel rods in a cleaning tank adjacent to the reactor overheated. In themiddle of July, the Hungarian Atomic Energy Office (OAH) approved a request by nuclearpower plant Paks to restart its number two reactor pending the fulfillment of a list of conditions. The license runs until the end of the year, a period corresponding roughly tothe period of time the reactor can operate on its current fuel reserves. (Econews; Ng 3,MH 4, Vg 8, Nb 8)

GraphiSoft buys own sharesGraphisoft Rt decided to buy own shares until Oct 31, 2005; the company said. Thedecision was made at the AGM April 29. Its reason is to create a cover for the call optionsthe company gave to its employees. Graphisoft bought more than 51,000 of its shares at

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an average price of Ft 1,370 on Friday. The company decided on giving further 25,000call options yesterday. Graphisoft was in the black in H1 but reported declining turnover.(Vg 13) G.R.

Malév hikes jet fuel surchargeHungarian airlines Malév Rt has raised its fuel surcharge to Euro 7 on scheduled flightsbecause of the steady increase in jet fuel prices, Malév said yesterday. Malév introduceda Euro 4 jet fuel surcharge, an add-on to ticket prices, in June. The hike to Euro 7 takeseffect on Wednesday. The excess charge for a return flight is thus Euro 14. According toMalév, waiving the hike would have added Ft 1.5 billion to the company's costs. If jet fuelprices go down, Malév will repeal the excess fare. (MTI Econews; MH 9)

Deep-freeze fire put out after 8-daysFirefighters finally managed to win an eight-day battle against a blaze that consumed adeep-freeze warehouse in Zalaegerszeg, the fire-fighters' commander said yesterday. Thewarehouse, owned by Goldsun Rt, broke out on August 24, consuming a 1,500 sq.m deep-freeze facility, 10,000 tons of frozen food, and an unspecified amount of packagingmaterial. The damage is estimated to exceed Ft 1 billion The cause is under investigation(MTI)ECONOMICS2003 budget bill before parliament

The government has submitted the act closing the 2003 budget to Parliament, theFinance Ministry said yesterday. The GFS general government deficit was Ft 1,094.5billion in 2003, 5.9% of GDP. Tax and non-tax budget revenue rose from 40% to 41% of GDP and budget spending rose to 46.9%. The amended budget draft calculated withgovernment spending equivalent to 44.5% of GDP. Public debt rose to 57.5% of GDP, upfrom 55.6% in 2002 as the result of a higher-than- expected deficit in the state sector. The deficit, in turn, was widened by the weakening forint and lower-than-expectedprivatization revenue. (Econews; Ng 1, MH 1, Nv 5, Nb 13)

FHB Bank cuts interests on loans The Land Credit and Mortgage Bank (FHB) Rt has cut its interest rates on state-subsidizedloans with 5-year and 10-year interest periods for new homes from 6% to 4.95%. FHB hasalso cut its interest rates on state-subsidized loans for used homes with 5-year interestperiods from 6.95% to 6.45% and with 10-year interest periods from 6% to 5.45%. FHBhas decreased its interest rates to invigorate the stagnant home loan market and itsloans are now cheaper than the home loans of the commercial banks. (MH 1) G.B.

Industrial production prices upIndustrial production prices increased by 0.1% in July, which means 2.7% yr/yr. Prices of export products declined because of the strengthening of Forint while products sold inHungary became more expensive due to oil prices. The first process had stronger effectin last two month causing the index to decline from 5.4% rate of May. (Vg 5) G.R.

Economic confidence downIn August, Ecostat's 'Top 100' economic confidence index was slightly down at 53%, while

its small business confidence index fell to 49%, the research institutes latest poll showed.SMEs have been more unnerved by the prolonged political uncertainties than bymacroeconomic figures, the researcher said. Of the top 100 companies, 54% said theyexpected their business climate to improve in the short term, while half of them wereoptimistic about growth in the coming months, compare to 41% in June and 32% in July.(NG 3) S.F.

Economy climbing, driven by exports The economy has taken a turn for the better this year, with increasing exports drivinggrowth, a finance ministry official told a meeting of professionals in yesterday. Deputystate secretary Álmos Kovács told the two-day conference that exports were up by nearly20% year-on-year, and that company investments had grown by about the same amount.

Kovács added that VAT rates could only be reduced if increased employment yieldedsufficient inflows and expenditure was cut significantly at the same time. "The importantthing for the economy now is to reduce the current-account deficit," he said. (MTI)

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POLITICSPresident Madl to nominate PM Sept 27Socialist party (MSZP) leader László Kovács said yesterday that President Madl Ferenchad assured him earlier in the day that he would propose Prime Minister PeterMedgyessy's replacement on September 27, 30 days following the PM's resignation.Kovács said he had also assured Madl that MSzP and coalition party the Alliance of FreeDemocrats (SzDSz) would vote for their nominee for PM Ferenc Gyurcsány. He added thatthe coalition talks will cover the make-up of the new government and the coalition

agreement. The parties will also discuss budget and tax laws with the participation of theFinance Ministry. (Econews ; MH 1, Nv 1, Vg 5, Nb 6)

Six candidates in race to chair MSzPSix candidates are in the race to chair the senior government coalition party MSzP andreplace the current chair, Foreign Minister László Kovács, who is not running, IldikóLendvai, head of the party's parliamentary group and its nominations committee saidyesterday. The six are Culture Minister István Hiller, former Sports Minister György Janosi,Interior Minister Monika Lamperth, Prime Minister's Office State Secretary Imre Szekeres,Speaker of Parliament Katalin Szili, and Mayor of the city of Pecs László Toller. Thecandidates will appear before the nominations committee on September 3. The election isscheduled for a party congress held in mid-October. (MTI; MH 1, Vg 4, Nb 6)DOMESTIC

Heating fees to go up by 7.4%Budapest City Council yesterday decided to raise the district heating fees in Budapest by7.4% from Oct 1. The Council also approved the road reconstruction plans of themunicipality, 65 km of main roads will be reconstructed for Ft 13 billion. The Councildismissed the head of Szent István Hospital Lajos Molnár. The Council also voted thatthere is no conflict of interest between the two posts of Mayor Gábor Demszky, so he canbe mayor and Member of the European Parliament at the same time. (MH 5 Nv 4) G.B.

Gyurcsány to Review Iraq MissionFerenc Gyurcsány, the nominee for prime minister, called for a review of the country'smilitary presence in Iraq, daily Magyar Hírlap said. Hungary has 300 troops in Iraq as partof the U.S.-led coalition and the parliamentary mandate for the mission expires at the end

of the year. Outgoing Prime Minister Peter Medgyessy's government had earlier plannedto extend the troops' presence by one year. ``All legal, international and politicalcircumstances must be carefully examined,'' Gyurcsány said following his meeting withDefense Minister Ferenc Juhász, according to Hírlap. (Bloomberg)

Medgyessy decorates a Hungarian thinkerOutgoing Prime Minister Péter Medgyessy awarded writer, historian and journalist FerencFejto the Order of Merit of the Hungarian Republic Grand Cross in Parliament on Tuesday. The award was presented to Fejto, who lives in Paris, in recognition of his lifetimeachievement on behalf of President Ferenc Madl. Fejto was born Hungary 1909. Heparticipated in the outlawed communist movement and was imprisoned for one year in1932. Soon after he left, and joined the Social Democrats. He was sued for one of hisarticles and had to flee to Paris. From 1938 on he worked as the Paris correspondent of the left wing Hungarian daily Népszava, and participated in the French resistancemovement. He returned to Hungary for the reburial of Imre Nagy in 1989. He waspreviously awarded the French Legion of Honor. (MTI; Nv 4, MH 5)

02/09/2004BusinessErste and Postabank merger registered The merger of Erste Bank Hungary Rt and Postabank Rt is official, chairman-CEO PéterKisbenedek said yesterday. The company court registered the new company formed fromthe merger on August 31. The bank, which will be called Erste Bank Hungary, will beHungary's second-largest retail bank and its fifth-largest in terms of assets, with morethan Ft 1 trillion. Erste Bank Hungary absorbed Postabank and became the legal

successor of Postabank. The merger itself was carried out in eight and a half months, andthis speed was an important factor in the success of the move, Kisbenedek said.(Econews; Nv 5, MH 9, Vg 15)

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Trade union demands Ft 60,000 minimum wage The Alliance of Autonomous Trade Union (ASzSz) is demanding the government raise theminimum wage from the current Ft 53,000 to Ft 60,000 next year, chairman János Borsiksaid. ASzSz would like the government to increase the lowest salaries by more thanaverage salaries, Borsik said. The trade union expects the government to suggest acompromise of Ft 58,000, but they think this is not enough, Borsik said. Nevertheless,ASzSz also wants to maintain the tax-free position of minimum wages, Borsik said. (Nv 4)

M.K.New Nokia plant completedMobile phone producer Nokia Komáromi Kft finished the construction of its new, 20,000sq m plant in Komárom, North Hungary in just 6 months' time, announced the company'scommunication director Éva Andrási. Nokia laid the corner stone of the plan in March andspent Euro 50 million on the project. The company decided in favor of doubling itsproduction capacity due to the rapidly growing demands from Europe, the Middle Eastand Africa. Nokia Komáromi Kft will increase its workforce by 500 due to thedevelopment. (NG 1) R.G.

ArchiCAD 9 to be shipped in mid-SeptHungarian software company Graphisoft R&D Rt said yesterday that it would ship the

latest version of its building design program ArchiCAD in the middle of September. TheU.S., German and international versions of ArchiCAD 9 will ship first, with most otherlocalized versions shipping by the end of the year. (Econews; Ng 12, Vg 13)Bumper year for cornDue to good weather conditions this year's corn yield is estimated at 7.2 - 8 million tons,twice as much as last year. Produce per hectare could reach 8-10 tons and the amount of corn exported this year might increase from the average 1.5 - 1.6 million tons to 3 milliontons, according to József Vancsura, president of the National Association of GrainProducers. However, record yield might also cause problems as storage capacity is notsufficient for such a great produce. (NG 1) R.G.

Robust to produce 1 mln LCD TVsRobust Plastik Assembling (RPA) Kft is soon to start producing LCD television sets. The

company currently makes fax machines and chordless phones. The investment for thenew profile at its Gyor base cost Euro 1.5 million to date. The company plans to produce1 million TVs over the next 5 years. RPA has 700 employees and is planning on hiring 60more. Last year they had a turnover of Euro 65 million and a net profit of Ft 16.99 billion,this year it is projected Euro 80 million and Ft 20 billion, respectively. (VG 9) E.C.

Malév reports lower losses in H1Hungarian airline Malév Rt had audited pre-tax losses of Ft 3.9 billion in H1 2004, a Ft 1.5billion improvement from the year before, the airline said yesterday. Malév said it couldbreak even as planned for the year, considering performance in the first seven months.Sales rose 20% to Ft 59.4 billion in H1 2004, exceeding the target by 6%. Additionally,Malév saved Ft 3 billion because of a cost-cutting program, enabling it to meet thecondition for receiving Ft 3 billion in government subsidies later in the year. (Econews; Ng4, Vg 9)

Olympics help public TV beat commercialDue to its Olympic broadcasts, the public Hungarian Television (MTV) achieved betterviewing figures over the past two weeks then the leading countrywide commercialchannels, an MTV spokesperson said yesterday. "Within the population as a whole, MTVcaptured 25.9% as against RTL Klub's 22.4% and TV2's 23.5%," Maria Csorba said, citingfigures of AGB Hungary. "In the 18-49 age group, which is of prime interest foradvertisers, MTV topped the list with 24.3%, ahead of RTL Klub's 23.5% and TV2's23.8%," she said. (MTI; Ng 5, Vg 9)

MOL: Gazprom, Gaz de France interested

Russian gas giant OAO Gazprom said yesterday that it is bidding for Hungarian Oil andGas Company MOL Rt's gas assets, Dow Jones reported from Moscow. The French state-owned utility company Gaz de France said that it is interested in buying natural gasassets put up for sale by MOL but declined to say whether it is actually bidding for the

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businesses, the news agency reported from Paris. Gazprom said it is bidding a part of aconsortium but didn't identify its partners. Gazprom put in separate bids for each divisionthat MOL has put on the auction block, a Gazprom official told Dow Jones Newswires.(Econews; Ng 11)

Hungarian product grand prix awarded This year's Hungarian Product Grand Prix competition awards were presented inparliament yesterday. The jury gave the Grand Prix to 16 out of 158 submitted products.

The winning ventures received the honors from parliamentary economic committeedeputy chairman György Podolak. The competition is aimed at improving the winners'positions on the international market, assisting the introduction of EU-conform certificatesand promoting domestic quality production. The 158 products competing for the prizeincluded 36% industrially processed foodstuffs and 30% processing industry products.(MTI; Vg 9)

Wienerberger builds brick factoryBrick manufacturer Wienerberger Teglaipari Rt. is building a new factory at a cost of Ft 5billion in Tiszavasvári, 170 kilometers NE Budapest, the group's Vienna center yesterday. The project, the company's first in northern Hungary, is scheduled to be completed in thethird quarter of 2005, and will supply brick to eastern Slovakia as well. Teglaipari is alsospending Ft 1.8 billion and Ft 400 m on its plants in Kisber and Köszeg, both in western

Hungary. (MTI; Vg 9)

Hungary's 1st wind energy park The first wind energy park in Hungary is to be constructed on the southern edge of Csepa, Szolnok county. Good Wind Hungary Kft intends to build 15 windmills delivering 2MegaWatts of power each. The 300 acre area is planned to have 100m tall windmills with56m long propellers.The wind energy park is expected to be a great economic and socialinvestment: Csepa has a 30% unemployment rate that could be tackled by the

construction and its operation, and the incoming industrial taxes would help improve thecommunity and create more working opportunities. (NB10) E.C.

McHale to buy MezogépIrish McHale Engineering Ltd and liquidator Kerszi Rt have come to an agreement aboutthe purchase of agricultural company Szolnok Mezogép Rt. Kerszi was not willing toreveal the purchase price, but Mezogép's most valuable asset is its factory that is worthFt 800 million. Szolnok Mezogép went bankrupt in March this year. McHale was looking foran investment opportunity in Slovakia, but when they heard about the bankruptcy of theirbusiness partner Mezogép, they changed their mind. (MH 11) M.K.

Circus publishes reconstruction tender

The Hungarian Circus and Vaudeville Kht published a tender for making plans for thereconstruction of the Budapest Grand Circus' building in Distr. 14, according to the publicProcurement Gazette. The Ft 3 billion reconstruction is scheduled to start spring 2006 andwill last for a year. During works performances will be held in a temporary tent set up inBudapest. The Budapest Grand Circus receives 280,000 - 310,000 visitors annually, twiceas much as a smaller theater does. (NG 9) R.G.

30 day suspension of Brau share tradingFinancial market regulator PSzÁF announced it has extended a two-day ban on trading of shares in brewer Brau Union Hungária Rt for another 30 days, from yesterday. Trading inthe shares had been suspended since Friday following a ruling on Friday by the BudapestMunicipal Court ruling invalidating PSzÁF's approval of a takeover bid for Brau by Amstel,which is owned by brewing giant Heineken. The court ruled in favour of a smallshareholder in Brau Union Hungária who argued that the price offered by Amstel, asubsidiary of brewing giant Heineken, in a takeover bid of Brau Union Hungaria was fartoo low. (Econews; Vg 14, 20)

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More and more welcomes for EuroMore and more outlets are accepting the Euro as a form of payment. Spar Hungary Kftwas the first to introduce this option in its chain stores.Kaiser's followed suit this August.One fourth of McDonald's restaurants already accept the Euro that could make up to 5%of the monthly turnover at the places where customers use the Euro the most often.Baumax Hungary Rt and C&A also welcome the future currency. Benetton Hungary Kft,Praktiker Kft, and Mol Rt are planning on introducing the acceptance of the Euro as well.

(VG 9) E.C.

EasyJet starts Budapest-Dortmund flightLow cost airline easyJet started daily flights between Budapest and Dortmund yesterdayeasyJet said yesterday. The company also operates a daily Budapest-Berlin flight. The no-frills company first appeared in Budapest in May, and has since flown 35,245 passengersto and from the Ferihegy international airport, according to figures published by theairport's operator Budapest Airport. In July alone easyJet had 15,834 passengers.(Econews)

Euro 10 mln renovation of hotel plannedAccor Pannonia, the Hungarian subsidiary of French hotel group Accor, is planning tospend Euro 10 million over the next three years to renovate its Sofitel Atrium hotel on thebanks of the Danube in the center of Budapest, Sofitel manager István Kovács saidyesterday. The renovation is part of a Euro 30 million-investment project, which includesthe construction of two Ibis hotels and the renovation of the Novotel convention center inBudapest. Kovács said the Sofitel renovation was intended to boost the five-star hotel'sposition on the highly competitive Budapest hotel market. The 351-room hotel has had anoccupancy rate of 67% so far this year. (Econews)

EconomicsGyurcsány vows to keep econ. policyPrime Minister designate Ferenc Gyurcsány has said that the government intends to keep

the economy on the path set in early 2004. At a press conference yesterday, Gyurcsánysaid further steps to reduce the public sector deficit would be taken if necessary, but atpresent he saw no such need. The government aims to keep the economy on a path of balance and sustainable growth, and implement a stable and predictable economicpolicy, he said, adding the government would announce its macroeconomic forecasts forthe whole of the year on September 15. (MTI; Ng 3, Vg 5)

MKB's Ft 100 billion note programHungarian foreign trade bank MKB Rt has announced it will launch a two-year, Ft 100billion note program. The program has been approved by the financial market regulatorPSzÁF. First, MKB will auction MKB II bonds, a series of five-year floating rate bonds aspart of the note program. MKB will offer between Ft 2 billion and Ft 5 billion of the bonds,which mature on September 10, 2009 and carry a rate of 0.25% over the three-month

BUBOR. The Ft 10,000 bonds will be auctioned on September 8. The minimum price atauction will be 99.99% of nominal value. (Econews; Ng 11)

GDP growth slows for 1st time in yrHungary's economic growth slowed in the second quarter for the first time in a year after thegovernment restrained consumer spending in the third-largest new EU member. The economygrew 4 % in the second quarter, after expanding 4.2 % in the first three months, the statisticaloffice said. Growth was expected at 3.9 %, according to the median forecast of 10 economistspolled by Bloomberg. The government put a cap on state wages and cut government-financed building projects and housing-loan subsidies in a bid to trim the budget deficit beforeHungary can adopt the euro in 2010. (Bloomberg Nb 3, MH 11)

Hungary's PMI up in August

Hungary's Purchasing Manager Index rose by 1.4 points to a seasonally adjusted 52.9 inAugust, showing business activity was picking up after a two-month slowdown, Halpim,the company which compiles the index, said yesterday. The index, which gauges thebusiness mood of 100 manufacturing firms, reached its second-highest level this year,

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after May's 53.5. The rise follows levels of 52.9 in June and to 51.5 in July. The productionindex rose 5.7 points to 57.4 in August.(Econews; Ng 4)

AKK accepts only a fraction of offers The State Debt Management Agency (AKK) repurchased just Ft 2.52 billion of Ft 51.74billion worth of bonds offered at yesterday's reverse auction. Demand was also high atAKK's reverse auction on August 18, but, then too, AKK accepted relatively few of theoffers. At yesterday's auction, AKK received 22 offers worth a combined Ft 20.59 billionfor the early redemption of 2005/G bonds of which it accepted only three offers for acombined Ft 2.52 billion, cutting the amount outstanding to Ft 224.4 billion. (MTI)

PoliticsPolgár becomes new foreign affairs spokespersonViktor Polgár has been appointed new spokesperson of the Foreign Ministry, ministerLászló Kovács said. Polgár worked for 17 years in the ministry before 1989 and he used tobe spokesperson of the Hungarian Socialist Party (MSzP) for one year in the 1990s. In thelast eight years Polgár was head of the Hungarian office of an international PR agency.(Nv 4)

Medgyessy to leave for Italy, BrusselsPrime Minister Péter Medgyessy will leave for Italy to attend an economic conference thisweekend, and will visit Brussels subsequently, government spokesperson Erika Gulyássaid yesterday. Medgyessy will be fulfilling a former invitation in which he was invited togive a lecture at the conference. On Sunday Medgyessy will leave for Brussels to meetsenior officials of the European Commission, the European Parliament and NATO until themiddle of next week. (MTI; MH 11)

DomesticWorld microsurgery congress in Debrecen The 7th congress of the International Society for Experimental Microsurgery (ISEM)started in Debrecen, eastern Hungary, yesterday with participants from 17 countries onfive continents. The opening session featured the premiere of a musical piece by a localmicro-surgeon for this occasion. "The composer made a successful attempt to expressthe world of microsurgery by means of the queen of instruments, the organ", Prof. István

Furka, honorary president of the congress and director of a local medical institute, said.(MTI)1st "wine village" kicks off Sept.9Hungary's first "wine village" program series will be held at several locations in Budapestfrom September 9-12. Some 200 small and medium-sized wine companies from 70 areasin 22 wine districts are expected to attend the event. The aim is to create an opportunityfor lesser-known wine producers to prove their worth. (MTI; Ng 4, Nv 5)

03/09/2004BUSINESSHeineken to submit Brau offer price formulaFinancial market regulator PSzÁF has ordered brewing giant Heineken, to submit theformula used to calculate the price for its new offer for the outstanding shares in brewer

Brau Union Hungária Rt within fifteen days. PSZAF said that Heineken has an obligation tomake a public offer for the shares because it has held an indirect 93.2% stake in BrauUnion since Oct 15, 2003. Heineken's has to come up with a new offer after a BudapestMunicipal Court ruling on Aug 27, 2004, invalidated PSzÁF's approval of the Dutchbrewer's previous takeover bid, made through its Hungarian subsidiary Amstel Sörgyár Rtin 2003. PSzÁF noted in its order that Heineken's offer price would have to reflect the"realistic" market value of the company. (Econews; Vg 1, Ng 11)

World's biggest seed factory opens The world's largest seed factory opened in Szarvas, SE Hungary, yesterday, built byPioneer Hi-Bred Hungary Rt, a subsidiary of the U.S.A's DuPont. Pioneer Hi-BredHungarian production manager Lajos Boncok told the media that a facility had beenexpanded to include a reception complex, a cleaning and grading line, and a dehydration

and crushing unit, costing Ft 2 billion which turned it into the world's largest seed factorywith an annual output of 32,000 tons of hybrid maize seed. U.S. Ambassador George H.Walker said that Hungary had exported USD 35 million worth of farm products to the U.S.

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and imported USD 30 million worth from there last year. Hungarian seed exports wereworth USD 7-8 million. (MTI; Vg 1, Ng 5, MH 10)

TriGránit eyes Bulgarian real estateBudapest-based Building firm TriGránit Rt wishes to invest several hundred million eurosin Bulgarian real estate developments, according to Bulgarian news agency BTA. First, TriGránit would construct a Euro 300 million real estate complex, including a shoppingcenter and an office building complex. (Vg 1) G.B.

4 companies win Ft 400 mln in grants Four companies have won grants worth Ft 90 million-100 million apiece from the SMARTHungary investment incentive program to buy state-of-the-art, environmentally friendlytechnology, Minister of Economic Affairs and Transport István Csillag said at a pressconference yesterday. The winners are Guardian Oroshaza, Csepel Metall Vasontode, Tyco Electronics EC Elektromechanikai Komponenseket Gyarto and KESZ Kozep-EuropaiEpito es Szerelo. The grants will help the four companies make investments totaling Ft1.17 billion. The program, which aims to support environmentally friendly, energy-savinginvestments at manufacturing companies, offers grants for up to 50% of the total projectcost, or for between Ft 15 million and Ft 100 million. (Econews; Vg 1, Ng 3, MH 9)

MÁV to save Ft 12.5 billion

Hungarian railways MÁV Rt expects its five-year efficiency improvement program to saveit Ft 12.5 billion this year - Ft 3.7 billion from cost cuts and Ft 8.7 billion from extrarevenue - however, the company still expects losses of Ft 48.4 billion, general managerZoltán Mandoki said at a press conference yesterday. Last year, MÁV's efficiencyimprovement program saved the company Ft 9.6 billion. In 2005 and 2006, MAV expectsthe program to save it a combined Ft 25.3 billion. Over its entire five-year span, from2002-2007, the program is expected to save MÁV 47.5 billion - Ft 34 billion from cost cutsand 13.5 billion from extra revenue. The program also aims, over five years, to cut 20%of the 52,000 MÁV employees. (Econews; Nv 4, Ng 5, MH 11, Vg 11)

Credit Suisse to buy ARAG accountsCredit Suisse Life and Pensions Insurance will take over the policies of accident and legal insurancecompany ARAG. ARAG and Credit Suisse have already signed a preliminary agreement on the deal,

but expect to sign a final contract later this month, then submit the transaction for the approval of market regulator PSzÁF. At the end of June, ARAG had 141 policies - mostly accident and sportsinsurance policies - generating annual revenue from premiums of Ft 35.59m. ARAG's policiesinclude one insuring 300,000 athletes who are member of Hungary's National Sports Association.(Econews; Ng 4, Vg 13)Concrete block plant opens A plant producing concrete pillars and cross-beams opened in N Hungary yesterday, in ahigh-unemployment area where overall investment has picked up significantly. In thepast six months investment in the region has increased by 67%, a figure given by thehead of the Prime Minister's Office Péter Kiss, at the opening in the town of Edeleny. Thenew facility was built by Neptunecht Ltd as a greenfield project and is employing fiftypeople at start-up, a number expected to double shortly, manager Péter Orosz said,adding that the current capacity was 10,000 tons/year, likely to go up to 25,000. Most will

be shipped to Germany. (MTI, MH 9)

Parmalat liquidator sells off property TM-Line Kft, liquidator of dairy company Parmalat Rt, plans to sell several properties of Parmalat in Budapest through an open tender. The liquidator hopes to get Ft 200 millionfor the properties. Parmalat will use this money to make some technologicaldevelopments and expand its cold storage capacity, Parmalat CEO László Fónai said.Since the start of the liquidation process Parmalat has increased its daily purchase of milkfrom 70,000 liters to 140,000 liters and increased its monthly sales to Ft 600 million. (Vg9) G.B.

Betonút signs contract on Mon 6

National Motorway (NA) Rt and construction company Betonút Rt, winner of the publicprocurement tender, will sign the contract for the 39-km section of M3 motorwaybetween Görbeháza and Nyíregyháza, northeastern Hungary, on Sept 6. Betonút won thetender before construction companies Vegyépszer Rt, Egút Rt, Strabag Rt and Mata-Engil

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Engenharia e Constructao SA. Betonút will build the road for Ft 79.78932 billion and it willbe completed by Dec 31, 2006. (Vg 4) G.B.

Int Min suggests Volan bus transferA statement by Interior Minister Monika Lamperth yesterday suggests that the state willtry to transfer ownership of Hungary's struggling Volan long-distance bus companies tomunicipalities. Lamperth told a meeting of representatives from the local governments of Hungary's largest cities that state-owned assets which could be more efficiently used by

municipalities ought to be transferred to their ownership. She noted that the lawmandates that the Treasury Asset Management Directorate (KVI) and the StatePrivatization and Holding Company (ÁPV) must generate as much revenue as possiblefrom these assets, and added that municipalities could put some of these assets to gooduse. (Econews; Vg 4)

K&H offers new package to SMEsStarting from September, K&H Bank Rt will roll out a new tailored package for SMEs, thatfeatures a credit line of Ft 20 million, a credit card and transaction information sent to agiven mobile phone. According to research done by K&H small enterprises deemed theease of acquiring a loan the most important factor in selecting a financial institution. K&Hpromises that in the new package all credit requests below Ft 20 million will be processedwithin 3 bank days ensuring speedy service. (MH 13) A.K.

Le Belier expands in Szolnok French enterprise Le Belier AG decieded to enlarge its production center in Szolnok byinvesting Ft 1 billion. Attributed to constant growing demand, BV Metal Processing Kft's (amember of the Le Belier group) store room will be remodeled into a large production hall,while its staff of 260 is increased to 350. BV had H1 net profit of Ft 2.1 billion, and by theend of the year, BV aims at Ft 3.8 billion.(NG 5) E.C.

State takes over Bábolna loans by Sept endBy the end of September the State Privatization and Holding (ÁPV) Rt will take over someFt 15 billion loans of state-owned agriculture company Bábolna Rt, about half of Bábolna'sdebts of Ft 30 billion, from the Hungarian Development Bank (MFB) Rt. In exchange MFB

will get a 75% stake in Hungarian Export Import Bank (Eximbank) Rt and the HungarianExport Credit Insurance (Mehib) Rt from ÁPV. However, MFB will have to pay another Ft3.1 billion for the shares besides the Ft 15 billion loan. (Nb 15) G.B.

UPC launches cable telephone servicesUPC Hungary Kft is launching its cable telephone services in 10 districts of Budapest. Theinternet based system (VoIP) will be available by those, approximately 300 thousandhouseholds, where UPC is operating an internet network from September. The averagecall fee is 30% cheaper than the other telephone providers', and subscribers may keeptheir old telephone number. (NG 5) E.C.

Investkredit comes to HungaryAustrian credit company Investkredit AG is to open an office in Hungary. The agency willnot carry out day to day business but rather its aim is to support the Vienna based bankin customer services and in other business related areas. In addition, the Budapest officewill provide data and information on Investkredit AG. (NG 5) E.C.

Sopron's Ft 4.9 bln sewage project The City of Sopron has started work on a Ft 4.9 billion upgrade of its sewage treatmentsystem. Half of the funding for project, which will be finished in 2006, will come from EUgrants, the central government will pay for 40% of costs, and the city itself will cover10%, Mayor Dezso Walter said yesterday. The project will connect areas north of the city,as well outlying communities southeast of the city to the treatment plant, and will divert

treated sewage into the River Ikva, rather than Lake Fertó, manager of project managerAlterra Gábor H. Kovács told Econews earlier. (Econews)

ECONOMICS

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Mines produce 13,300,000 tons of coalHungary's 8 underground and 12 surface coals mines produced 13,300,000 tons of coal in2003, according to figures published on the website of the Ministry of Economic Affairsand Transportation yesterday. Slightly less than three-fourths of the coals came fromsurface mines. Less coal is being extracted from underground mines, which generated 3million tons in 2003, 420,000 tons less than in 2002. Lignite accounted for 64.5% of thecoal, bituminous for 30.4% and anthracite for 5%. (Econews; Ng 3, MH 11)

Government to cancel foreign debt The Government put forward a proposal for approval by Parliament to cancel the debts of some developing countries. The total sum owed to Hungary by foreign nations at the endof 2003 was Ft 48,7 billion, of which Ft 41,2 billion is classified as bad debt. Thegovernment plans to cancel the debts of Bangladesh (Ft 38 million), Vietnam (Ft 30million), Egypt, Iran, Mongolia (owing Ft 2 million each). The biggest sum owed by Russia,Ft 22,3 billion, was repaid in full in January. The loans were extended by the Communistregime mostly in the eighties in rubles and dollars to "friendly" countries thatsubsequently defaulted. (MH 9) A.K.

Housing plan for the youthAccording to the latest home policy plans the government is to introduce new apartmentblocks specifically for young people. Young people could lease their new homes,

commercial banks would purchase the apartment and the young people would pay aleasing fee to the banks. The government will set up a guarantee fund to fund thisconstruction concept. Another plan is to increase the tax break for young people whenthey purchase a used home from Ft 40,000 to Ft 100,000. (Vg 1) G.B

Student Loan Center The government guaranteed the Student Loan Center Rt's (DK) up to Ft 6.8 billion, with amaximum of 10 years, foreign currency credit acquisition for its refinancing last week. The guarantee of the exchange rate is avialable when credit is obtained throughHungarian Development Bank Rt, which may, if necessary, provide additional refinancing.DK still offers its loan for 11.95% this coming semester. Last year, DK granted a total of Ft24.6 billion for students participating in higher education (NG 4) E.C.

POLITICS5 MPs eyeing MDF chair excluded from group Five MPs who challenged the leadership of the junior opposition Democratic Forum (MDF),were expelled from the party's parliamentary group yesterday. MDF parliamentary leaderKároly Herényi reported the expulsion to House Speaker Katalin Szili yesterday, statingthat István Balsai, Sándor Font, Balázs Horvath, András Kelemen and László Szaszfalvi"have been expelled and are no longer members of the parliamentary group," MDFmembers who asked not to be named told MTI. (MTI; Nv 1, Nb 1, MH 4)Foreign and security policies-no changePrime minister in waiting Ferenc Gyurcsány has taken a stand for continuity in foreignand security policies. "Continuity will be the decisive factor of foreign and securitypolicies in coming years," Gyurcsány told reporters after meeting Foreign Minister LászlóKovacs yesterday. The PM-designate said he highly appreciated what the governmenthad done in this field under Kovács's guidance over the past two years. Gyurcsány vowedthat his government would continue that foreign policy. (MTI; Nv 1, MH 4)

DOMESTICScandal at PSZÁF The National Bureau of Investigation proposed to press charges for the allegedmisappropriation of funds against some 200 employees of the State Financial Institution'sSupervision (PSZÁF). The Bureau states that the employees received six months' extrapay, based on unjustified contracts, a practice that was fostered by management. IstvánBinder, PSZÁF spokesperson, refuted the accusations citing that the contracts wereperfectly legal. (Nv 3) A.K

Hungarian - Chinese bilingual school opensA Hungarian - Chinese bilingual elementary school opened in Budapest's District 15, thefirst of its kind in Hungary. Education Minister Bálint Magyar and Mayor Gábor Demszky

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attended the opening ceremonies. The event proves that Budapest is a truly multiculturalmetropolis, said Demszky. 90 students commenced their studies in the new institution.(Nv 4) A.K

Police suspect mafia in arson case The Organized Crime Division of the Police is conducting an investigation in the case of a Jeep Cherokee set ablaze with a Molotov cocktail in a closed parking lot in District 13 onWednesday. The investigation started after the car's owner turned out to be an ex-cop,

who's connected to recently freed mafia chief Péter Tasnádi. Five other cars also caughtfire, damages total over Ft 10 million. (MH 20) A.K.

Buda Castle and Vienna Burg cooperate A cooperation agreement targeting improved tourism was signed between Budapest'sCastle District and Vienna's Burg District, Budapest's Castle District mayor saidyesterday. Budapest District One Mayor Gábor Tamás Nagy said on signing theagreement with his Austrian counterpart, Vienna District One Mayor Franz Grundwalt,that Budapest was looking to Vienna to learn how to make Buda Castle and itssurroundings more attractive to visitors. (MTI)



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