7days, 2005. július 25

7/28/2019 7Days, 2005. július 25.

http://slidepdf.com/reader/full/7days-2005-julius-25 1/21

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

18 July 2005Business Three final bids for Antenna Hungaria

Vegyépszer has Ft 2 bln half-year profitLogistics co. invests Ft 1.1 bln in LébényGov't tightens up on constructionMalév sets up subsidiary for fuel suppliesMTelekom fined for breach of ad lawsFerihegy-1 to reopen on September 1Program to spend Ft 64 bln on urgent road worksChambers employ factoring co'sBKV revenue up in 2004Liquidator splits BábolnaCourt ruling on Kartonpack assets comes into forceTextbook publisher doing better OTP Real Estate fund's assets at Ft 46 bln

Economics Industrial output up adjusted 10.1% yr/yr in MayBusiness confidence down in JuneCounterfeit banknotes not to compromise cash flowProducers' milk purchase price drops in June

Politics Fidesz calls for stronger sugar protectionRadio presidency in legal tangle

Domestic State to be sued for Swiss account moneyFt 50 bln for Orczy Garden

19 July 2005Business Zenon to invest Ft 10 bln in Oroszlány

Templeton over 5% stake in BorsodChemCafé Reklám to be soldMotorway bonds on Luxemburg bourse?KFKI to sell stock in 2006New brokerage enters BÉT floor EIB signs Euro 1.07 bln loans for BpMinor fire at BorsodChem plantSluggish sales growth on Hungarian IT market

ISPA-program delayedEU has not yet reclaimed misused fundsRingier kicks off Sport-Network

Economics Interest rate down 25 bp, stable positive investment Central bank sells Euro 188m in Q2Household debt alarms PSzÁF

Politics Gov't phone, text message campaign in full swing Radio to operate without head

Domestic Zengö may yet be radar station Media protest limits on parliamentary broadcastsFree business course for womenFormula-1 in Hungary on track despite rain damageMinistries launch incentive to employ disabled

20 July 2005Business OECD advises greater fiscal discipline

EBRD to lend Euro 32 mln for M6PSzÁF fines Délhús but approves buyoutParmalat liquidator near deal with A-TejLasselsberger ups stake in ZalakerámiaBKS Bank to set up rep office in HungaryKanizsa Trend reports Ft 301 mln profitFt 3.2 bln hostel to open in DebrecenGov’t regulates temp agenciesEuromoney votes OTP best bankGresham Budapest ranks 1st of the best hotels70% of phone bill VAT reclaimable

Take-up on Bp office space increases 23% in H1HealthMin calls bids for helicopter ambulancesUniversal wants Mohai Agnes water nationwide

2

mailto:[email protected]


7/28/2019 7Days, 2005. július 25.



Economics Apeh report surveys 2004 income taxFinMin comments on local business taxVPOP provides Ft 367 bln for state budget

Politics Gyurcsany meets Singapore’s PM, presidentMayors fall out over bridge

Domestic Buda Castle endangered by lawn - UNESCOBlood supplies low in Bp

21 July 2005Business Gov’t grants $35 mln loan to Transelektro

Sanyo opens Ft 4.5 bln plant nr Budapest4 co’s to put in bid for BKV e-ticketingT-Mobile sells credit card to clientsROP subsidizes Salgótarján bus stationORTT extends TV2, RTL Klub contractsFundamenta H1 pre-tax profit doublesFúzió-Pharma to be liquidatedKÉSz files complaint against prison serviceMKB bank cards limited this weekendBÉT chairman suggests 4th pension fundDefense Min to sell Margit Island real estateKároly krt „bazaar” to go

Economics More jobless entered employment in Q1Construction output up adjusted 9.6% yr/yr in MayFinMin sees inflation rate of less than 3% for 2006

Politics Opposition urges cap on gas priceDemszky to seek re-election in 2006Balázs to head Paris-Bratislava line

Domestic Gov’t subsidizes art cinemasEuro 15 mln comes from EU to improve institutionsCourt being built with illegal labor

22 July 2005Business Swisscom wins tender for Antenna

Holcim opens mobile concrete mixer

GVH investigates bureaux de changeNHH tells mobile providers to lower feesTörley co’s reduce registered capitalDawnay Day invests in CEE real estateSykes plans Miskolc call center Fotexnet reduces registered capital to minimum ÁPV postpones decision on MalévDémász ranked most transparentGyermely asks for official execution of verdictMÁV calls for new bids from Stadler and Bombardier Délhús offer for Pick shares Ft 1,046 per shareVegyépszer won biggest tender in H1Baumit invests Ft 1 bln in Dorog

Sole proprietors 2004 average turnover Ft 6.2 mlnLeasing market growth slows in first half Futureal asset value up 22.4% in H1

Economics Kovács says local business tax not in line with EURetail sales up 5.7% yr/yr in May

Politics Gov’t to simplify public procurementDomestic Almost ? of Hungarians have no savings

Storage shortage halts harvest

3



7/28/2019 7Days, 2005. július 25.



18 July 2005

Business

Three final bids for Antenna HungariaThree of the six shortlisted bidders - the Macquarie consortium, Österreichischer Rundfunk (ORF) andSwisscom Broadcast - have submitted bids for the broadcasting company Antenna Hungária in the finalround of bidding, which closed on Friday. On Friday, the State Holding and Privatization Company

(ÁPV) announced that it expects to select the winner by the end of July. ÁPV is offering a 75% plus 1vote stake in Antenna Hungária, of which 73.71% (nominal value Ft 8.754 billion) is currently held by ÁPV and 1.29% (nominal value Ft 152.84 million) is held by Forrás Rt, part of the Arago group. The sixbidders that got into the second round were: Abertis Telecom, Ceske Radiokomunikace, Macquarieconsortium, Österreichiser Rundfunk (ORF), Swisscom Broadcast and TdF Telediffusion. (Econews;NG 7, Fri. Vg 13)Vegyépszer has Ft 2 bln half-year profit Construction company Vegyépszer Group reported after-tax profit of Ft 2 billion on net revenue of Ft 35billion in the first six months of this year, chairman-CEO Gyula Tímár announced. The group's major company Vegyépszer Rt had net revenue of Ft 29 billion and after-tax profit of Ft 1.5 billion in the sameperiod, Tímár said. Vegyépszer Group plans total net revenue of Ft 75 billion for this year and the after-

tax profit is expected to reach Ft 4.5 billion, Tímár said. (NG 4) M.K.Logistics co. invests Ft 1.1 bln in Lébény Freight forwarding and logistics company Transdanubia Kft will set a up a logistics center in Lébény,western Hungary, Managing Director István Horváth said. The investment is worth Ft 1.1 billion, andduring the first phase, a 4,000-sqm center will be constructed by the Austrian-owned company. Thewarehouse will support the regional expansion plans of the German Kromberg & Schubert GmbH, awiring harness production firm. Transdanubia said it would hire 20 new employees, and added that later the workforce might increase to 40-50. (Fri. Vg 11) P.Ö.Gov't tightens up on constructionMeasures aiming to clean up the construction industry took effect from Friday, resulting in moreadministration and tighter control. At present the construction sector has 270,000 legal and 80,000-

100,000 illegal workers, paid Ft 500 billion in wages with no contributions or tax. Constructors will nowhave to provide detailed data for all the projects whose net value exceeds Ft 10 million, 8 days beforethe construction starts. This also applies to projects involving public procurement, e.g. roads, bridges,pipelines and drain systems, regardless of their value, said Sándor Fegyverneki, vice-president of National Housing and Construction Office (OLÉH). Irregularities will earn fines of Ft 50,000 - Ft 10million. In autumn the government will set up the minimum wage table for the sector. (Thu. Vg 3) K.H.Malév sets up subsidiary for fuel suppliesFriday's EGM of Malév Hungarian Airlines Rt approved the creation of a subsidiary to manage suppliesof aviation fuel. The new company, Repulotéri Üzemanyag Kiszolgató (RÜK) Kft has registered capitalof Ft 3 million. Malév holds 96.6% of RÜK and a Malév subsidiary Air Budapest Club Kft holds theremainder, Malév spokesperson Kristina Németh said. RÜK will be responsible for ordering, storing,selling and supplying kerosene at Ferihegy, Sármellék and Debrecen Airports, Malév announced.

Malév will put the vehicles and equipment required to supply kerosene into the new company as a non-cash contribution. This will raise RÜK's registered capital to Ft 308 million, Németh said. Malév willreceive kerosene from RÜK through a co-operation contract. Malév supplies 220,000 tons of fuel a year to Ferihegy Airport, 60% of which is used by the airline itself. (Econews)MTelekom fined for breach of ad lawsThe Competition Office GVH has fined Magyar Telekom Rt Ft 8 million on the grounds that itsadvertising of the "Teleperc" package could mislead consumers, GVH announced on Friday. Thecompetition office ruled that Magyar Telekom advertised its "Teleperc" package as the cheapest on themarket. According to GVH, this was not the case, since other telecom companies offered lower prices.GVH also ruled that Magyar Telekom's comparison of its package and a similar Invitel package wasinvalid as it failed to note that one company uses second-based billing while the other uses a minute-

based method. (Econews; NG 4)

4



7/28/2019 7Days, 2005. július 25.



Ferihegy-1 to reopen on September 1The reconstructed terminal 1 of Budapest's Ferihegy Airport will reopen for passenger traffic onSeptember 1 as scheduled, the CEO of airport operator Budapest Airport (BA) Rt said on Friday. The24,000-sqm terminal, built in the 1940s and renovated over the last nine months, will receive 2.5 millionpassengers each year, János Hárskúti said. Initially, the costs of the project were budgeted at Ft 8.7billion, but extra works are likely to have contributed to an overshoot, he said. The number of passengers using the airport has risen exponentially, said Hárskúti. Budapest Airport is committed to

making Ferihegy the most rapidly developing airport in Central Europe, he added. The company is fullystate-owned and a 75% stake plus one share has been offered for sale by the State Privatization Agency. (MTI)Program to spend Ft 64 bln on urgent road works A National Road Reconstruction Program (NÚP) is being prepared for 2005-2015 by the Road AffairsCoordination Directorate (Úkig) of the Economy and Transport Ministry, according to unnamed sources.NÚP will focus mainly on the national network of roads, a Ft 7,000 billion national asset in poor condition. During the first two years, the urgent reconstruction works will cover 5,000 km of roads at aprojected cost of Ft 64 billion. The 2005-2006 project will improve the state of around 16% of thenetwork. (Fri. Vg 3) P.Ö.Chambers employ factoring co's

Chambers of industry all over the country have been commissioning debt collectors or selling their debtto factoring companies because of outstanding membership fees, which were compulsory for membersprior to 2000. Over the past couple of years, around 80,000 businesses in Budapest alone have beenapproached by either debt collectors or factoring companies. The outstanding membership fees of theBudapest Chamber of Commerce and Industry (BKIK) is said to surpass Ft 1 billion. (NG 1) P.Ö.BKV revenue up in 2004Budapest Transport Company BKV Rt had consolidated revenue of Ft 59.43 billion last year, Ft 4.1billion more than in 2003, BKV deputy CEO Tamás Szentgyörgyi said. BKV managed to cut itsoperating losses from Ft 26.83 billion in 2003 to Ft 24.12 billion last year but consolidated pre-taxlosses grew from Ft 25.14 billion to Ft 26.97 billion. BKV received subsidies of Ft 18.69 billion last year,as against Ft 18.83 billion in the previous year, Szentgyörgyi said. BKV's consolidated liabilities, not all

of them loans, rose dramatically from Ft 30.43 billion to Ft 61.56 billion last year. Long-term liabilitiesincreased from Ft 12.26 billion to Ft 32.26 billion. The company expects its debts to reach Ft 60 billionby the end of 2005. BKV will require new loans to repay maturing loans and to pay suppliers who wereowed money at the end of 2004. In related news, BKV plans to purchase 22 new metro trains at a costof Euro 174 million, and its request for financing of Euro 85 million to the European Investment Bank isnow being considered, the bank said on its website on Friday. (Econews; Fri. Vg 1, MH 3, NG 4, Nv 4,5)Liquidator splits BábolnaReorg Rt, the liquidator of debt-ridden state agricultural conglomerate Bábolna Rt, is preparing to sell acold storage facility in Nagyigmánd, northwestern Hungary, which is owned by a Bábolna subsidiarycomprising the latter's profitable activities. Bábolna Food Industries Rt will divest the assets, equipmentand employee base of the refrigerated warehouse, while retaining its stock. The transaction is to be

managed by Reorg subsidiary Reorg-Audit Kft, which will accept bids until August 19. All privatizationrevenues from Bábolna Food Industries will go towards repaying the parent company's Ft 30 billiondebt. (Nv 5) P.P.Court ruling on Kartonpack assets comes into forceThe ruling of the Pest Central District Court which freezes Kartonpack Packaging Rt's assets hasbecome legally binding, the company announced on the Budapest Stock Exchange website on Friday.In a decision dated May 5, the court froze the accounts of several companies with connections to AttilaKulcsár, the broker accused of embezzling billions of forints from K&H Equities Rt. Among them wereBritton Capital and Consulting, which owns 61.9% of Kartonpack shares, Kartonpack itself andKartonpack subsidiary Novoprint Rt. Kartonpack's EGM on July 5 authorized the board to lease out allof their assets. The terms of the leases could be set by the board in line with the company's financial

interests, and in harmony with the expectations of its shareholders and the authorities, the companyannounced. Apparently the EGM's decision was never implemented because the company has notannounced any subsequent asset deals on the BSE website. (Econews)

5



7/28/2019 7Days, 2005. július 25.



Textbook publisher doing better National Textbook Publishing (NT) Rt managed to stop its 10% market loss and will perform a Ft 5billion net revenue this year, CEO István Jókai announced. NT plans to sell 7.7 million school booksand related products this year to increase its revenue, which was Ft 4.5 billion last year, Jókai said. Thecompany has upgraded its IT system and reconstructed its website to attract more clients, Jókai said.The Hungarian textbook market is estimated to be worth around Ft 15 billion. (NG 4) M.K.OTP Real Estate fund's assets at Ft 46 blnThe net value of OTP Real Estate Fund's total assets reached Ft 46.4 billion in June, up from Ft 42billion four weeks before. OTP has problems with the strong capital increase, as its new investmentsrequire time to carry out. The fund has financed more flats in Vérhalom residential park, Dist. 2 in Juneand has a warehouse and office building complex built in Szölökert utca, Dist. 3. The first leasingcontracts of the Szölökert utca construction have just been signed. (NG 7) M.K.

Economics

Industrial output up adjusted 10.1% yr/yr in May Hungary's industrial output rose 10.1% in May from a year earlier, according to work-day-adjustedfigures, the Central Statistics Office (KSH) reported on Friday. The increase was driven by an adjusted13.1% rise in domestic sales. Work-day-adjusted export sales volume rose 7.3% yr/yr. Unadjustedfigures show industrial output rose by 12.9%. The annual figures are unchanged from preliminary datareported on July 7. However, KSH revised down the monthly growth of industrial production to 1.4%,according to seasonally- and working day-adjusted figures, from a preliminary 3.1%. Domestic salesrose 3.3% from April, exports, however, were down 1.2%. In the first five months of the year industrialoutput rose 5.4% from the same period a year earlier. Export volume rose 6.3% and domestic salesvolume was up 5.1%. (Econews; NG 3)Business confidence down in JuneGKI-Wallis's combined consumer-business confidence index fell to an all-time low of minus 21.7% inJune, GKI-Wallis announced. The negative record is due to the steady decline of consumer confidence,whereas business confidence has been stagnating since April. The confidence of companies employingless than 50 people is much worse than that of the mid-sized firms and the big players, whileconsumers expect a deterioration in their financial situation during the upcoming 12 months. GKI-

Wallis's confidence index has been calculated since 1996. (Nb 11) P.Ö.Counterfeit banknotes not to compromise cash flow The relatively low number of counterfeit banknotes discovered in Hungary does not compromise thesecurity of the country's cash transactions, the Hungarian National Bank's (MNB) quarterly report said.In the first quarter of 2005, nearly 5,000 fake banknotes were seized by the authorities, which marks a25% decrease from the same period of last year, the report said, adding that 62% of the notes were for Ft 1,000. Counterfeit notes, as a rule, are home made color prints or Xeroxed copies, the documentadded. Hungary joined the European Central Bank's Counterfeit Monitoring System, thus becoming anactive partner in a European institution fighting forgery. (MTI; MH 3, Nv 4, Nb 11)Producers' milk purchase price drops in JuneThe average purchase price of milk that farmers received for milk sold dropped from Ft 62 to Ft 60.54 in

June, said Szabolcs Vágó, analyst at the Agricultural Economy Research Institute. This figure is only anaverage, since some farmers may receive Ft 64 for their milk, while others only Ft 57, Vágó said.Various interest representation organizations will convene to discuss the issue, one proposal being toincrease the Ft 4-5 EU subsidy, since other EU producers may receive three or four times more thanthat, Vágó said. Currently the price of a liter of milk floats between Ft 120-189 in retail outlets. (NG 10)M.K.

6



7/28/2019 7Days, 2005. július 25.



Politics

Fidesz calls for stronger sugar protectionThe opposition Fidesz party has called on the government to take steps in the EU on behalf of thecountry's sugar producers, an agricultural expert of the party said on Saturday. Planned measures bythe European Commission to cut sugar prices and reduce quotas may result in 10,000 fewer jobs inHungary's sugar industry, Zoltán Lengyel told journalists. Lengyel said that the Hungarian government'srequest merely to modify the commission's proposed measures, while most EU member states firmlyrejected them, was "insufficient". The EC plans to slash the subsidies it gives to sugar producers by upto 39%. (MTI; MH 3)Radio presidency in legal tangleThe trustees of public radio station operator Magyar Rádió Rt (MR) meet today to remedy the legalvacuum that will arise when the term of current MR President Katalin Kondor expires at the end of July.Controversy arose within the board of trustees (consisting of delegates of political parties and civilorganizations) because Kondor appointed MR Vice President János Hollós to take over themanagement of the radio station as Acting President on expiry of her mandate. Those trustees who areSocialists believe this is against the law, MSzP-delegated chairman Gábor Gellért Kis said. (Nv 3) P.P.

Domestic

State to be sued for Swiss account money An unnamed Hungarian citizen from Pécs has announced plans to launch a legal battle against theHungarian state in September to reclaim a deposit made by his grandfather's brother before WWII, towhich he is heir. The account in question was regarded as a "passive deposit" and nationalized byHungary after the war as no more transactions were conducted by the lawful owners. In 1973, theHungarian state transferred them to Swiss state ownership, in exchange for which the latter reducedHungary's 1.8 million-franc debt for nationalizing Swiss-owned property by 325,000 francs. The State Asset Management (KVI) has contacted the descendants of the account holders, but no disbursementshave been made to date due to a legal vacuum, according to KVI Legal Director Balázs Vereby-Csethe.(MH 6, Nv 4) P.P.Ft 50 bln for Orczy GardenThe Budapest City Council and the municipality of Dist. 8 are planning to upgrade the 11-hectare OrczyGarden from its current state of decay into an attractive recreational area consisting of a public park,cultural and leisure facilities, the district's Vice Mayor Zsuzsanna Mitus said. The plan will require ahefty investment of Ft 45 billion-Ft 50 billion, to be financed jointly by investors and the municipalities,which are also hoping to draw on EU funds. The project forms part of the mid-term development plansof Budapest, the Podmaniczky Plan, and the Second National Development Plan. The landscapingphase will be preceded by replacing contaminated soil in part of the area, which is currently used as abus garage by public transport operator BKV Rt. This alone will cost Ft 2.4 billion and take two years,Mitus added. (Nv 12) P.P.

19 July 2005

Business

Zenon to invest Ft 10 bln in Oroszlány Zenon Europe Kft, a maker of industrial water filters, is set to mount a multibillion forint project in thesecond half of the year to expand output capacity, unnamed sources said. The investment, which willadd a new production line to the company's Oroszlány site in western Hungary, is part of a long-termgrowth campaign by which Zenon plans to spend a total Ft 10 billion to increase production. Theupcoming project is a follow-up to a 2 ?-year program launched last year, which added 6,000 sqm of shop floor to the company's plant. Zenon Europe, part of the Canada-based Zenon Environmental Inc.,manufactures almost exclusively for export. It had net earnings of Ft 230 million on revenues of Ft 7.1billion last year. (Fri. Vg 1) S.F.Templeton over 5% stake in BorsodChemFTIF Templeton Eastern Europe Fund has increased its stake in BorsodChem Rt from 4.99% to 5.2%,the latter announced. Templeton passed the 5% mark by acquiring 169,000 BorsodChem stocks withthe help of an investment service provider. (BBJ online)

7



7/28/2019 7Days, 2005. július 25.



Café Reklám to be sold Wallis Group has sold 85% of the shares of marketing and communications company Café Reklám Kft,in which ex-Wallis CEO György Nagy has a stake. The remaining 15% is still owned by the currentWallis management, according to FigyeloNet information through MTI-Econews. Café Reklám, alongwith its subsidiaries, had Ft 3 billion in revenues last year. This year, the company has planned toachieve an expansion in turnover by 10-15%. (NG 5) E.C.Motorway bonds on Luxemburg bourse? The Hungarian motorway bonds to be issued by State Motorway Management Rt (ÁAK) are expectedto be introduced on the Luxemburg stock exchange, Economics Ministry spokeswoman Judit Tóth saidyesterday. Although the details have yet to be finalized, the bond issue will total around Euro 3 billion,will start in September, and may be carried out in one or more stages, Tóth said. The issue will bemanaged by Deutsche Bank and Citigroup, she added. Tóth said Luxembourg was a good location for the bonds as they are not expected to be very liquid and thus not worth launching on major stockexchanges. (Econews; NG 3, Nv 5)KFKI to sell stock in 2006 KFKI Rt, a Hungarian computer services company, plans to sell shares to the public in the third quarter of next year, the web site Portfolio reported, citing the company's chief executive. Budapest-basedKFKI plans to raise about Euro 20 million for investments, Chief Executive Officer Lajos Ludman said.

The company expects Ft 1.4 billion of earnings before interest, taxes, depreciation and amortization, onsales of Ft 15 billion this year, according to the web site. KFKI competes with companies includingSynergon Rt in developing software, integrating and running computer systems and selling hardwarecomponents. (BBJ online)New brokerage enters BÉT floor The State Financial Supervisory Board (PSzÁF) has approved the operation license of Emita SecuritiesInvestment and Services Rt, a new brokerage planning to offer a full range of investment services atthe Budapest Stock Exchange (BÉT). Established in September 2004 with Ft 150 million registeredcapital as a 100% Hungarian-owned private company by GMI Consulting and Services Kft, Emita willenter the trading floor as an independent player without a commercial bank behind it; a description thatcurrently fits 16 existing service providers. The new entrant is planning to target clients with individual

needs instead of catering to mass demand. The company is currently waiting for BÉT and the CentralDepository and Clearing House Rt (Keler) to approve its membership request, which is expected toarrive within a few weeks. If so, Emita will start trading in late summer. (BBJ online)EIB signs Euro 1.07 bln loans for BpEuropean Investment Bank (EIB) vice-president Wolfgang Roth signed two loan agreements for acombined Euro 1.07 billion with Budapest mayor Gábor Demszky and Finance Minister János Veres inBudapest yesterday. The EIB loans will finance the construction of the fourth Budapest metro line and asewage treatment plant. EIB will provide Euro 875 million for the construction of the new metro linebetween Kelenföld railway station and Bosnyák tér, with the Budapest municipality borrowing Euro 184million and the state borrowing Euro 691 million. The other Euro 194 million EIB loan will finance theconstruction of a sewage treatment plant on Csepel Island. The City of Budapest will take out Euro 100million of the total loan with the state taking the rest. (Econews; Nv 1, MH 2, NG 4)

Minor fire at BorsodChem plant A small fire and a gas leak occurred at the BorsodChem MCHZ chemical plant in Ostrava (CzechRepublic) yesterday morning. The plant is owned by the Hungarian chemicals company BorsodChemRt. CEO Sándor Palffy said the damage was not very significant and would cost around CZK 500,000(Ft 4 million) to repair. The amount of gas that escaped was not dangerous and the accident will notalter plans for the aniline-producing plant. BorsodChem bought the Ostrava plant from the Czechcompany Aliachem in 2000 and spent CZK 72 million (around Ft 586 million) on safety andenvironmental protection last year. This represented 16% of BorsodChem's total investment spending.(Econews)

8



7/28/2019 7Days, 2005. július 25.



Sluggish sales growth on Hungarian IT market Sales of IT products and services are flat as a combined result of fewer government orders andincreasing orders from financial and telecom companies, IT company executives said. Hungary'smembership of the EU has yet to boost sales as it takes a long time to process applications for EUgrants, they added. According to figures supplied by the Association of IT companies, Hungary'stelecoms and IT market is worth Ft 1,400 billion-1,500 billion a year, of which IT accounts for around Ft400 billion. Some 8,000-9,000 companies operate in the IT sector and they generate 10% of Hungary's

GDP, the association figures show. HP Hungary deputy CEO Imre Molnár said that big companies nowupgrade their IT systems every 3-4 years instead of every 2-3 years. Currently, the SME sector is theonly one showing growth, he added. (Econews)ISPA-program delayed Since 2000, the ISPA-program has represented Euro 88 million in subsidies to Hungary from the EUeach year. The usage of the funds available has been delayed, due to the delay of up to two years inthe realization of the projects. According to information from the National Audit Office (ÁSz) only onequarter of the subsidies had been transferred to their owner by December 31 last. The EuropeanCommission did not allow much time for the member states to prepare, since starting from 2000,Hungary had to develop both its tendering skills and its regulations simultaneously. (NG 3) E.C.EU has not yet reclaimed misused funds

Because of financial misappropriation, 13 EU member states have to pay back a total of Euro 244,4million EU subsidies originally issued for rural development. The EU is not yet claiming back fromHungary the agricultural subsidies that have been misused, however, Minister Without Portfolio József Grál warned that Hungary may be forced to do so in December. The money paid back by countries isthen returned to the common budget. Regarding the date of demand of payment he added: controls arecarried out non-stop, and it is only a matter of chance whether the EU detects that funds have beenused in an unsatisfactory way. After our first year in the EU, Hungary has received Ft 300 billion in EUsubsidies, topped up by Ft 160 billion-170 billion by the government, and supplemented by another Ft100 billion through the SAPARD program. (NG 1) E.C.Ringier kicks off Sport-Network Magazine and newspaper publisher Ringier Kft will concentrate its sports-related products under the

management of a single editor-in-chief, with the resulting Sport-Network to operate as the largest mediagroup in Hungary with a focus on sports and games. The group will include daily Nemzeti Sport andweekly Képes Sport as well as the online version of the former, Nemzetisport.hu. Sport-Network will beheaded by the editor-in-chief of Nemzeti Sport. At the same time, Attila Kálnoki-Kiss took over thisposition from Tamás Szekeres, who had been in charge of the publication for five years. Therestructuring is aimed to allow Ringier to manage related publications together and in doing so createsynergies, Ringier Managing Director Béla Papp said. This is in line with international practice,especially those of Spanish and French newspapers, he added. (BBJ online)

Economics

Interest rate down 25 bp, stable positive investment The latest central bank base rate cut was made possible by the stable positive international investment

sentiment as regards Hungary, central bank governor Zsigmond Járai said after the Monetary Councilcut the central bank base rate by 25 basis points to 6.75%. "The investment environment has been verypositive for 6-12 months, the regional risk margin expected by investors is now at its lowest level butwill probably not stay like this," Járai said. The decision to cut rates was based on international factorsas no significant change has taken place in Hungary's macroeconomic fundamentals since the previousdecision was taken on interest rates, Járai said. Given the current situation, there is every chance thatboth the 2005 and the 2006 year-end inflation targets will be met, Járai said. (Econews; NG 1)Central bank sells Euro 188m in Q2 The National Bank of Hungary sold Euro 188 million on the interbank market in the second quarter of 2005, the bank said in its latest quarterly report. The transactions were made under the bank's practiceof converting part of the net proceeds of the government's foreign currency borrowing into forints on theinterbank market. As the central bank converted Euro 90 million in the first quarter, its market sales of

euros totaled Euro 278 million in H1 2005. The National Bank's sales of foreign currency made uproughly 0.5% of spot forex transactions on the Budapest interbank market in Q2 and 0.2% in Q1.(Econews)

9



7/28/2019 7Days, 2005. július 25.



Household debt alarms PSzÁF The State Financial Supervisory Authority's (PSzÁF) annual report, released yesterday, shows that thehousehold sector's debt to banks and state organizations grew last year, and was almost 4 times morethan in 2000. In December 2004 it increased from Ft 740 billion in 2000, to nearly Ft 4,000 billion. But2004 saw a smaller rate in increase compared to GDP and debt is much lower than in the 15 old EUcountries. The rate is definitely high, says the report, compared to the income of population. Hundredsof thousands with instable financial position impose a great risk on Hungary, and this may be

exacerbated by a potentially lower rate of GDP growth. (MH 13) K.H.Politics

Gov't phone, text message campaign in full swing The governing Socialist party has launched a six-week mobile-phone text messaging campaign, asenior party official said yesterday. The PR offensive accompanies a telephone message campaignlaunched a few weeks ago relaying the party's plans for the future and achievements since it took officein 2002. The campaign aims to open a social debate and not to ask support for government plans or laws, a party spokesman said. The main opposition party Fidesz criticized the government of theexcessive spending on its propaganda campaign, claiming that the prime minister had spent alreadyclose to Ft 1.9 billion of tax-payers' money. "The Prime Minister's Office plans to spend an additional Ft3.5 billion on the same purpose before the parliamentary elections in 2006 spring," a Fidesz

spokesperson told reporters. (MTI; MH 2, Nv 3, NG 3)Radio to operate without head Magyar Rádió Rt (MR), the operator of Hungary's three public radio stations, may have to operatewithout a head indefinitely into August after its board of trustees failed agree on a candidate to act ascaretaker manager until a new chairman is elected to replace outgoing Katalin Kondor. Last weekKondor appointed MR Vice President János Hollós to take over the management of the radio as actingpresident from Aug. 1, which the Socialist members of the board rejected as unlawful and fielded IstvánGoblyös yesterday instead. However, when he failed to win the backing of the opposition delegates,Goblyös said he would not accept the post. (Nb 1) S.F.

Domestic

Zengö may yet be radar station

While two weeks ago Prime Minister Ferenc Gyurcsány said the government had no intention to set upa NATO radar station on Zengö, the highest peak of the south Hungarian Mecsek hills, no plans existfor an alternative location for the project, daily broadsheet Népszabadság reported. According tooriginal plans, three locator stations were to be established as part of NATO's air defense system: oneon Zengö, another on Bálvány in the northern Hungarian Bükk hills and a third at the military base of Békéscsaba, southeastern Hungary. However, in the face of growing opposition from greenorganizations and local residents, the government decided the shelve the project and look into other possibilities. Since then nearby Tenkes and Hármashegy have come up as potential locations, but thiswould upset the project's finances, the paper said. Furthermore, NATO has recently indicated thatZengö was still its preference for the site, it added. (Nb 1) S.F.Media protest limits on parliamentary broadcasts

Five commercial TV channels and the Hungarian Journalists' Union (MUOSZ) will ask theConstitutional Court to uphold what they claim is their right, as set down in Hungary's media law, to editand broadcast their own images of parliamentary sessions, a senior official of RTL Klub Rt told MTIyesterday. Close circuit cameras operated by Parliament are currently fed to Hungary's TV networks. "It[is] a breach of press freedom that [TV networks] are only allowed to inform the public about thesessions with pictures made by the closed-circuit TV network of the Parliamentary Office," said RTL'spress chief László Fazekas. The current rules prevent viewers from seeing sessions attended by a tinyfragment of the 386 deputies, which has been a source of frequent public criticism of Parliament. "Insuch cases, the cameras of Parliament intentionally never give a long shot of the assembly hall," hesaid. Neither do the current rules allow the media to cover unexpected events, such as hecklersinterrupting contributions by fellow MPs. (MTI; Nb 2, MH 2, NG 3, Nv 3)

10



7/28/2019 7Days, 2005. július 25.



Free business course for women As part of the National Development Plan, businesswomen who want to make their enterprises moresuccessful may apply for a free course, reported Magyarország.hu based on MTI information. Theapplication deadline for the one-and-a-half month course is August 15. The aim of the course, which isco-financed by the EU and has a September start, is to promote the establishment of new enterprises,to develop existing ones, and to teach participants about how to prepare a marketing plan. (NG 3) E.C.Formula-1 in Hungary on track despite rain damageDespite damage caused by heavy rainfall to the racing track, prospects for the Formula-1 HungarianGrand Prix on July 29-31 look good, the organizers told reporters at the Mogyoród site yesterday.Several methods have been used to deal with the inundation, and it is estimated that it will cost Ft 15million to clear up the damage. (MTI; NG 1)Ministries launch incentive to employ disabled The Ministry of Youth, Family and Social Affairs and the Ministry of Equal Opportunity have announcedgrant programs for businesses and organizations aimed to help the work rehabilitation of the disabled.Under the program, companies, municipalities, foundations and NGO's offering human services canapply for up to Ft 7 million on condition they outline practicable proposals on ways to improve labor rehabilitation in Hungary. In addition, applicants which employ disabled staff can receive up to Ft 1.5million to create new jobs and Ft 1 million to spend on improving labor conditions. The total amount

available for the program is Ft 500 million. (Mon Vg 1) S.F.20 July 2005

Business

OECD advises greater fiscal disciplineWhile paying tribute to Hungary’s shift to better balanced growth, the Organization for EconomicCooperation and Development (OECD) warned of the key challenges to euro entry, including publicspending, employment potential and business support and regulation, in its country survey publishedyesterday. If Hungary aims to meet the Maastricht criteria in 2008 and adopt the euro in 2010, tougher fiscal discipline will be necessary, according to the report. The report cited the need for further coordination between the Hungarian National Bank and the government to cut inflation and reduce the

fiscal deficit. Further reductions of the fiscal deficit have to come about largely through spending cuts,because the level of taxation is already harming competitiveness and labor utilization, said the report.(Econews; NG 1, MH 2, Nv 5, Nb 11)EBRD to lend Euro 32 mln for M6 The European Bank for Reconstruction and Development (EBRD) will lend Euro 32 mln to theconsortium building a stretch of the M6 motorway, the bank announced yesterday. The consortiumbuilding the 58 km section of the M6, which runs south from Budapest, had expressed a strong interestin involving the EBRD, according to the bank’s statement. The EBRD will join a consortium of banksincluding Bayerische Landesbank, Commerzbank, KBC Finance Ireland, the Hungarian Foreign TradeBank (MKB) Rt, K and H Bank Rt and KfW in financing the Euro 480 million project. The consortiumbuilding the motorway comprises Bilfinger Berger BOT, a 40% owner of the project company, Porr Infrastruktur, also with 40%, and Swietelsky International Bau, with 20%. The consortium was awarded

the PPP contract to build the stretch with a bid of Euro 503 million at net present value in August 2004.(Econews; MH 2, NG 4, Nv 5)PSzÁF fines Délhús but approves buyout The State Financial Supervisory Authority (PSzÁF) has fined Délhús Rt and Arago Investment HoldingRt for Ft 30 million each for a bargain that allowed the latter to exercise voting rights in excess of itsown 33% at a Pick Rt general meeting, news portal Napi Online reported. This was possible as Aragowas absent from the meeting, with Délhús controlling 99.9% of votes in breach of legal regulationspertaining to public shareholding companies. However, PSzÁF approved Délhús’s buyout offer for thecompany, according to Econews. Délhús will raise its registered capital from Ft 2.88 billion to Ft 3.5billion in order to pay for the buyout. (Econews, BBJ online; MH 2, NG 3)

11



7/28/2019 7Days, 2005. július 25.



Parmalat liquidator near deal with A-Tej The liquidator of bankrupt dairy maker Parmalat Rt said it was close to signing a deal to sell thecompany’s assets to A-Tej Kft, one of the two investors that have recently put in an offer for Parmalat. At the same time, the liquidator said it asked A-Tej to raise its undisclosed offer by 7-8%. If A-Tej’sgeneral meeting approve a higher offer and the deal goes through, Parmalat could continue operatingin its current form and all the 300 jobs would be retained, the liquidator said. This is the second time A-Tej has submitted a bid for Parmalat, after the company’s first offer was rejected by the liquidator, who

then was hoping to get at least Ft 8 billion for the assets. Due to the unsuccessful sell-off attempt,however, the liquidator since then has lowered Parmalat’s sales price by half. (NG 4) S.F.Lasselsberger ups stake in Zalakerámia Austria’s Lasselsberger Ceramics said it had extended the deadline for its stock offer to buy theoutstanding shares of tile maker Zalakerámia Rt by another week. Lasselsberger, which raised its stakein Zalakerámia from 89.8% to 93.6% in a public share offer in early July thus automatically earningrights to buy the shares it did not already own, said small shareholders have until July 26 to relinquishtheir stocks at Ft 2,350 apiece. After the deadline, all shares not sold to Lasselsberger will automaticallybecome void and new ones will be issued to replace them. Under market regulations, the new sharesthen must be ’sold’ within six months after the issue, while failing that the equity capital of Zalakerámiawill have to be lowered. (NG 5) S.F.

BKS Bank to set up rep office in Hungary Austria’s BKS Bank has registered to set up a representative office in Hungary which will be located inSopron, the financial market regulator PSZAF announced yesterday. The office will not carry out anybusiness activities, but will serve mainly as a resource for Austrian clients operating in Hungary. BKSBank, however, plans to open a branch in Hungary soon according to information on its website.(Econews)Kanizsa Trend reports Ft 301 mln profit Kanizsa Trend Kft, a South African-owned maker of leather chairs and sofas, had net profits of Ft 301million on revenue of Ft 8.9 billion in its business year ended June 30, sales director Zsolt Miklósannounced yesterday. Revenue and profits were level with the year before, in spite of a 10% decline indemand on the European market. This year the company targets profits of Ft 450 million on revenue of

Ft 9 billion. Kanizsa Trend’s exports rose 5% in the last business year, compensating for a 5%decrease in sales in Hungary, where it claims to be the leading furniture producer. The company spentFt 100 million on product development and employs 450 people. The company is owned by South Africa’s Steinhoff Holding, which is listed on the Johannesburg stock exchange. (Econews)Ft 3.2 bln hostel to open in Debrecen A 16,000 sqm student hostel has been finished recently and will be opened on Aug 10 on the campusof Debrecen University. The Ft 3.2 billion investment was carried out in a PPP-program. The hostel,with 369 rooms and accommodation for over 900 students, will be run by Campus Hotel Rt for 24years. Part of the rent will be paid by the university, the rest by the students. On the basis of 2004prices, the total sum per person per month will be below Ft 40,000, CEO Zsuzsanna Gönczi said. Theuniversity also wants to build a swimming pool, which would cost Ft 1.5 billion-Ft 2.5 billion. (Vg 8) G.R.Gov’t regulates temp agenciesThe government is planning to tighten regulations on temp agencies as part of its efforts to stamp outillegal labor. A new bill, scheduled for a parliamentary debate in the fall, is being prepared by theNational Supervision of Labor Issues and Workplace Safety (OMMF) in cooperation with industryrepresentatives. In the estimate of the Association of Personnel Consultants in Hungary, approximately10-15% of the 275 companies active in the market never register temps with the National Tax Office(Apeh) and social security authorities to avoid taxes and duties, while 30-40% can be classified as partof the grey economy from the same point of view. Without sufficient government control, many of thesebusiness ventures successfully avoid scrutiny for years, putting the law-abiding minority at adisadvantage, the trade association complained. (Nv 3) P.P.

12



7/28/2019 7Days, 2005. július 25.



Euromoney votes OTP best bank The UK financial journal Euromoney has picked OTP Bank Rt as the best bank in Hungary and the bestsmall bank in Central and Eastern Europe, said the journal’s July issue. Euromoney’s 2005 Awards for Excellence, a global survey of the quality of banking services, said OTP Bank was possibly EasternEurope’s biggest success story. OTP Bank’s profit went up by a remarkable 46% in 2004, anachievement owed in part to substantial government subsidies on home loans, and to the fact that thebank did not have to put aside significant funds for risk provision, said Euromoney. (MTI; MH 2, Nv 5)

Gresham Budapest ranks 1st of the best hotelsThe Four Seasons Gresham Palace in central Budapest was ranked the world’s best hotel this year bythe Robb Report luxury magazine, national daily Népszabadság reported. The five-star luxury hotelboasting Art Deco style with Art Nouveau furnishings took the first place ahead of the Bulgari Hotel inMilan and the Faena Hotel Universe in Buenos Aires in the prestigious paper of the world’s well-off.Prices in the one-year old luxury hotel, with an exquisite view of Budapest’s picturesque Buda hills andthe historic Buda Castle range from Euro 250 to Euro 4,200 per night, the latter to be paid for a royalsuite. High prices are however not a deterrent to visitors, of whom only 50% are businessmen, the restare tourists. Most of the guests arrive from the United States and Great Britain. (MTI; MH 3, NG 4)70% of phone bill VAT reclaimableThe government may ease the regulations on reclaiming VAT on telephone bills. According to unnamed

sources, from next year companies may reclaim 70% of telephone bill VAT instead of the current 50%.The Finance Ministry did not wish to comment on the question. The rate has been lowered since thebeginning of this year but several observers have pointed out that the change is against EU regulations.Since then the EU has started an examination of this topic. The easing of the regulation would cause Ft10 billion-Ft 15 billion decrease in state budget revenues next year. (Vg 2) G.R.Take-up on Bp office space increases 23% in H1Take-up on Budapest’s office space market reached a record 66,100 sqm in the first half of the year,increasing 23% from the same period in 2004, according to the Budapest Real Estate ConsultantsForum (BIEF). A little more than half of the new contracts were for office space outside of the citycentre, and just a quarter was for space inside the city centre. The biggest contracts concluded in thefirst half of the year included one for 11,000 sqm rented by E.ON Rt at the Roosevelt Ház, one for

13,000 sqm for Budapest Bank along Váci Street, and another for 7,000sqm in Graphisoft Park for SAP. Bank Center, the East-West Business Center and Infopark signed the most new contracts in thefirst half. (Econews; NG 3)HealthMin calls bids for helicopter ambulancesThe Health Ministry has received the government’s go-ahead to call a tender to supply new helicoptersfor the emergency services, Health Minster Jeno Rácz said, adding that the ministry is hoping to put thenew helicopters into service within half a year after a winner is announced. Currently two helicoptersare also being upgraded and are expected to become operational in a few weeks, he said. Speaking onthe planned tenders, Rácz added that only companies with appropriate references and a record in air rescue will be invited to participate. (Nv 4) S.F.Universal wants Mohai Agnes water nationwideUniversal Foods Kft wants to make Mohai Ágnes, Hungary’s oldest mineral water brand, availablethroughout the country, managing director Kornél Temesvári told a press conference in Budapestyesterday. Universal Foods aims to make Mohai Ágnes profitable and raise its market share from lessthan 1% to 5-10%, Temesvari said. Last year Mohai Ágnes had revenue of Ft 113 million, about Ft 20million less than the year before. Hungary’s mineral water market is worth an annual Ft 30 billion.Universal Foods bought Mohai Ágnes from Karsai Holding, which had invested Ft 260 million at theplant. (Econews; MH 13)

13



7/28/2019 7Days, 2005. július 25.



Economy

Apeh report surveys 2004 income tax Individual tax-payers opting for self-assessment declared incomes totaling Ft 3,297 billion last year,84.3% of which came from progressive taxation, the National Tax Office (Apeh) said yesterday. According to the tax authority’s latest figures, the average income rose 8.3% last year compared to2003 and came to Ft 1.37 million for the whole year. In 2004, nearly ¾ of the taxpayers belonged to thebottom three tax brackets, who accounted for only 33.6% of the total taxable incomes, while 5.5% of them earned more than Ft 4 million giving 30% of the total taxable incomes and more than half of theincomes taxes. (NG 3) S.F.FinMin comments on local business tax A senior Hungarian Finance Ministry official yesterday said the local business tax conforms completelyto EU norms, responding to several companies’ suggestion that the tax is illegal. László Konya said thatalthough EU rules prohibit more than one kind of consumption-based tax, such as VAT, the localbusiness tax is a type of direct tax and is not affected by the respective EU directive. The local businesstax is the most important local tax levied, accounting for 8.5% of all local council revenues. Last year local councils had revenues of Ft 310 billion from the tax, and this year they expect the tax to generateFt 318.9 billion in revenues. (MTI; Nv 5)VPOP provides Ft 367 bln for state budget

The Customs and Excise Office (VPOP) provided Ft 367 billion revenue to the state budget in H1 of thisyear. This represents about 12% of total state budget revenues. The income exceeds plans and eventargets for bonuses, and as a result officers will receive bonuses totaling Ft 4.8 billion. The Q1 bonus,which was about half a month’s salary on average has already been paid in advance. Revenues fromthe car registration fee reached Ft 27 billion, and the planned revenue for H2 is Ft 35 billion. Excise taxresulted in Ft 294 billion, 44% of whole-year plan. To meet the expectations, the officers started stricter inspections concerning fuel excise tax avoidance. (Vg 2) G.R.

Politics

Gyurcsany meets Singapore’s PM, president Meeting Singaporean leaders yesterday, Prime Minister Ferenc Gyurcsány presented Hungary as anattractive destination for investors. Gyurcsány held talks with Prime Minister Lee Hsien Loong,President Sellapan Rama Nathan and senior Singaporean businessmen. Fostering high-level politicalrelations is a crucial precondition for investment promotion in East Asia, Gyurcsány said, noting thatHungary had adopted the same successful approach with China and Japan. The prime minister wasoptimistic about the prospects of Singaporean investment in Hungary, but said current Singaporeandirect investment of Euro 50 million could be raised by ten times and should primarily focus on smalland medium businesses. (Econews; Nv 2, Nb 3, MH 11)Mayors fall out over bridgeMayors of Budapest districts reacted with indignation to a statement from City Mayor Gábor Demszkysaying that the districts were hindering the construction of Aquicum Bridge, which is to be built innorthern Budapest. The districts did not prepare the investment properly, Demszky added. Theincriminated district heads responded that there have been no real negotiations about the bridge in the

last five years. Óbuda always supported the building of the bridge, Dist. 3 Mayor István Tarlós said. (Nv1) G.R.

Domestic

Buda Castle endangered by lawn - UNESCO Officially part of the World Heritage since 1987, the Buda Castle will be listed by UNESCO as anendangered World Heritage site if the city council goes ahead with plans to widen the lower Danubeembankment, the organization ruled. The idea to add a stretch of lawn to the riverbank area, whichwould ruin the beautiful view according to the World Heritage Committee, has come up as a convenientsolution to cover a new giant sewage pipe that will be part of Budapest’s Ft 180 billion centralwastewater treatment project, rather than to enhance the visual appeal of the area or to create ahealthier environment. Enviroduna Kft, the general contractor of the jumbo project, will review plans in

line with UNESCO’s recommendations and try to find an alternative solution, Managing Project Director Gábor Ivántsy said, explaining that the main pipe is a crucial part of the system that cannot beeliminated from the plans altogether. (MH 1) P.P.

14



7/28/2019 7Days, 2005. július 25.



Blood supplies low in BpThe Hungarian Red Cross has called on Budapest residents to donate blood as supplies are currentlybelow the required minimum. The situation is not yet critical, with supplies still sufficient to satisfydemand and perform all urgent and planned operations, General Director of the National Blood SupplyService Izabella Hoffer said. Summer is always a difficult time bloodwise, for various reasons, she said.Fewer people donate due to work and school holidays, and demand surges owing to more roadaccidents and also because patients with non-acute conditions tend to schedule surgery for the

summer when they can take days off from work. (Nv 1) P.P.21 July 2005

Business

Gov’t grants $35 mln loan to TranselektroTranselektro Energetics and Environmental Rt, part of the Transelektro Industrial and CommercialHolding, will receive a $35 million loan from the Hungarian government to promote a deal the companyis currently negotiating with Vietnam, Prime Minister Ferenc Gyurcsány announced during his officialvisit to Southeast Asia, aimed to encourage Hungarian investment in the region and vice versa. Thecompany is hoping to secure a contract for developing a new 30MW coal-fired power plant, PresidentPéter Székely said, adding that the loan would in fact go to the Vietnamese government to finance the

project. Owned 100% by Hungarian individuals, Transelektro is particularly active in Communist or former Communist countries in the developing world. (MH 11) P.P.Sanyo opens Ft 4.5 bln plant nr Budapest Japanese electronics giant Sanyo opened a Ft 4.5 billion photovoltaic module and air conditioner plantin Dorog, north of Budapest, yesterday. Sanyo plans to spend an additional Ft 1.8 billion on the plant bythe end of next year, doubling its size to 10,000 sqm and raising the number of employees from 150 toas many as 400. Present at the opening were Sanyo’s vice president Sadao Kondo and Tibor Szanyi,undersecretary at the Economy and Transport Ministry. The plant will make Sanyo’s „HIT” solar cells, ahybrid which is more efficient than traditional crystal solar cells. The plant will make mainly one-sidedcells, but will also produce some special two-sided cells, mainly for the German market. (Econews; NG6, MH 13)4 co’s to put in bid for BKV e-ticketing EDS Hungary Kft, MÁV Informatika Kft, Sagem Hungary Kft and T-Systems Hungary Kft will be invitedto submit bids for Budapest Transport (BKV) Rt’s e-ticketing public procurement tender, the companyannounced yesterday. Bids are expected by September 12, and the winner will be announced inNovember this year. The winning company must finance the investment, which may cost Ft 15 billion-Ft20 billion. BKV will take over the full operation of the system after ten years. (NG 1) M.K.T-Mobile sells credit card to clientsMobile service provider T-Mobile Hungary Rt has added credit services to its list of products, CEO András Sugár said. T-Mobile customers requesting credit between Ft 70,000-Ft 500,000 have to gothrough an assessment scheme that takes twenty minutes in order to get their credit card. The serviceis backed by Budapest Bank Rt, which actually implemented its own loan assessment system into T-Mobile’s service. The interest rate is 2.87% per month. (NG 6) M.K.

ROP subsidizes Salgótarján bus stationConstruction works on Salgótarján’s new bus station, with a planned capacity of 7 million travelers per year, can start in 2006, after contracts have been signed with the European Union subsidizing the Ft320 million investment with Ft 288 million. The bus station, located in the center of the city, has traffic of 20,000 passengers per day. Some 70 different domestic lines start and terminate at the station, most of them connecting to the 33 lines of the nearby railway station as well. Salgótarján council bears only10% of the total costs of the investment. The remaining 90% is being funded by the Regional OperativeProgram, this year a total of Ft 103 billion. (Nb 6) A.Sz.ORTT extends TV2, RTL Klub contractsThe National Radio and Television Board (ORTT) extended the operational contracts of commercial TVchannels TV2 and RTL Klub by five years, ORTT spokesperson Éva Vékony said. The contracts would

have expired in 2007, so the extension means the two channels will broadcast in Hungary at least until2012. The two channels currently pay Ft 1.5 billion each per year to ORTT for the concession rights,and this sum will increase by the rate of inflation, Vékony said. (NG 6) M.K.

15



7/28/2019 7Days, 2005. július 25.



Fundamenta H1 pre-tax profit doublesHome savings bank Fundamenta-Lakáskassza recorded consolidated pre-tax profit of Ft 253.8 millionin the first half of the year, almost 2? times more than in H1 2004, the bank announced yesterday.Fundamenta-Lakaskassza signed new contracts with almost 40,000 clients in H1, bringing its totalnumber of contracts to 450,000 by the end of June, 57% more than a year earlier. Fundamenta-Lakáskassza has so far disbursed about Ft 10 billion, including former savings and yields plus loans, to120,000 clients whose accounts have matured. Although the home savings bank disbursed a total of Ft

80 billion to contract holders so far, the value of total contracts held rose to Ft 500 billion, 16% morethan in June 2004. (Econews; Nb 2)Fúzió-Pharma to be liquidated The Budapest City Court reached a verdict mandating the liquidation of formerly successful drugwholesaler Fúzió-Pharma Rt some days ago. The decision concluded a case initiated in September 2003 as the company has been losing money for a few years, with revenues plummeting from Ft 2.2billion in 2003 to Ft 276 million a year later while losses remained close to Ft 255 million. A subsidiaryof U.S.-based industry giant ICN Pharmaceuticals Inc. until 2002, Fúzió-Pharma is currently owned byPharmaCom Kft. The latter is controlled by a handful of Hungarian individuals through their businesses,including Hír Televízió Rt owner István Töröcskei, financier Klára Deák, and Imre Boros, minister incharge of Phare issues during the Orbán administration. Fúzió-Pharma acquired long-established but

bankrupt gun manufacturer Fégarmy Rt from the state early this year. (NG 8) P.P.KÉSz files complaint against prison serviceSzeged-based construction company KÉSz Kft has filed a complaint with the Public Procurement Arbitration Committee regarding Hungary’s first PPP jail construction project in Tiszalök, easternHungary, requesting the committee to investigate the National Prison Service Headquarters’ (BVOP)decision to cancel the multi-billion tender in the middle of the procedure in late June. According to aBVOP release, the call for bids for the construction project and subsequent operation of the penalcomplex was terminated because BVOP had failed to appoint an asset manager for the state propertywhere the prison would be built, a minor oversight that could have been easily remedied during thetendering process, according to Kész. With its Ft 16.7 billion bid, the company was ahead of theconsortiums headed by Wallis Real Estate Rt and OTP Real Estate Rt, while the fourth participant didnot submit a binding offer. (NG 8) P.P.MKB bank cards limited this weekend MKB Bank Rt’s ATMs will not operate from Friday 2 P.M. to Monday 8 A.M. this weekend and the bankwill suspend its Internet bank card functions too, deputy department head Ildikó Köpe said. MKB’s100,000 bank cards will be limited in use for purchasing from 1 A.M. to 8 A.M. on Monday, Köpe said.The situation is required by that fact that MKB changes its bank card IT system this weekend, Köpesaid. After the change, MKB clients will be able to transfer money from their account to their mobilephones or receive an immediate bank account statement from ATMs, Köpe said. (NG 6) M.K.BÉT chairman suggests 4th pension fund Leaders of the Hungarian stock market submitted a proposal to government representatives suggestingthe establishment of a fourth pension fund: a new pension savings account with state subsidies.Governmental support is important for the successful long-term management of the Hungarian stock

market, Attila Szalay-Bereviczy, chairman of BÉT said. The Hungarian stock market has around 15%domestic investors - a low percentage which makes the market highly sensitive. The new pension fundmight stimulate more investing, as it offers the account holders the possibility of direct investment,allowing them to choose the type of investment themselves while they may only sell their shares atretirement. The government subsidy would make 30% of the yearly amount of the investment per person (with a maximum limit of Ft 100,000). (Nb 11) A.Sz.

16



7/28/2019 7Days, 2005. július 25.



Defense Min to sell Margit Island real estateDefense Ministry is to sell the long-neglected Europe House on the Pest side of Margit Island. Thedilapidated building, of more than 4,000 sqm, is owned by the Defense Ministry and Budapest CityCouncil, ownership rights being contested at the Town Hall until recently. The building, which alsoincludes several sports and hospitality facilities, has been out use since the beginning of 2000.Reconstruction works would cost Ft 100 million, way above the budget of the Ministry. Tibor Szanyi,government representative and owner of the former operating company, said even demolishing the

complex and establishing a park instead would better match the landscape of the island, which is beingprepared for the European Swimming Championship. (Nb 4) A. Sz.Károly krt „bazaar” to goThe demolition of the line of one-storey buildings along Dist. 5’s Károly körút known as the „bazaar row”was kicked off by Budapest Mayor Gábor Demszky today. The final nod to pull down the structures,empty for years and generally regarded as an eyesore, came after years of discussions and a lengthytendering process. The demolition will be complete by September at a cost of Ft 200 million. Thebuildings will be temporarily replaced with a park, with the Budapest City Council simultaneouslyinviting architects to submit plans for redevelopment, Demszky said. The municipality itself favors theidea to develop 10,000 sqm of offices, 10,000 sqm retail space, a hotel and an underground car parkwith 850 parking spaces on the plot. (Nv 12, BBJ Online) P.P.

EconomicsMore jobless entered employment in Q1 Almost 20,000 registered jobless found work in Q1 this year, representing a 35% increase compared tothe same period of last year, said the Employment Office published on Tuesday. The number of vacant jobs was only 67,600 in the first quarter of 2005 as against the usual quarterly average of 80,000-90,000. But at the same time, the global figure for the total number of registered unemployed of 435,300 in the first quarter was up 10% compared to the same period of last year. Job centerslaunched fewer training programs in the first three months of this year because they must go through apublic procurement procedure for selecting trainers starting from this year. As a result, only 16,800people participated in training, representing an almost 60% drop compared to the first quarter of lastyear, the report showed. (MTI; MH 3)

Construction output up adjusted 9.6% yr/yr in May Construction industry output rose 9.6% yr/yr in volume terms in May, according to working-day adjustedfigures and was up 10.9% according to unadjusted figures, the Central Statistics Office (KSH)announced yesterday. Construction output fell a seasonally- and working-day adjusted 3.1% from April.Five-month construction industry output rose 13.5% yr/yr. Output was up 9.4% yr/yr in January, androse a marked 25.1% yr/yr in February, due in part to a low base. Construction industry output rose5.3% in March and 20.2% in April from a year earlier, according to working-day adjusted figures.(Econews; NG 3, MH 11)FinMin sees inflation rate of less than 3% for 2006 Finance Minister János Veres spoke of an inflation target of under 3% for 2006, saying yesterday thatthis was the figure soon likely to be announced jointly by the government and the National Bank of

Hungary. The minister said the low rate would be triggered by a 5 percentage point drop in VAT, set togo into effect in January. Earlier, he said that the VAT reduction would hold back the increase in theconsumer price index by 1.7 percentage points, to less than 2%. Veres said he thought that setting atolerance range around the 3% inflation rate was appropriate, but he did not specify what the rangewould be. (MTI)

17



7/28/2019 7Days, 2005. július 25.



Politics

Opposition urges cap on gas priceHungary’s largest opposition party, Fidesz, will propose a government-mandated ceiling for the retailprice of natural gas, the newspaper Világgazdaság reported, citing a parliamentary deputy of the party.Fidesz wants to keep increases in natural gas prices for households, schools and hospitals below theannual inflation rate, Member of Parliament Mózes Lazár said, according to the newspaper. About 10months before the next general elections, Fidesz leads the ruling Socialist Party by 15 percentagepoints among voters with a party preference, the pollster Szonda Ipsos said. The government will raisethe wholesale price of the fuel by 7% from August 1, the second increase this year as worldwide naturalgas costs increase. Hungary’s annual inflation rate was 3.8% in June. (Bloomberg)Demszky to seek re-election in 2006 The Alliance of Free Democrats, the junior party in the government coalition, endorsed Budapest Mayor Gábor Demszky as their candidate for municipal elections in the second half of next year, daily Magyar Hirlap reported. While Demszky’s popularity ratings sank during the past year, party officials deemedhe has more support than potential challengers, the newspaper said today, citing unidentifiedexecutives. Demszky, who has won four straight terms since 1990 is the longest-serving mayor of aEuropean capital city. He garnered 46.7% of the vote in 2002. His popularity dropped to 38% inSeptember 2004, the lowest this term, from 57% after his November 2002 re-election, according to

pollster Szonda Ipsos. (Bloomberg)Balázs to head Paris-Bratislava lineTogether with five other prominent politicians, Hungary’s former Ambassador to the EU and later European Commissioner Péter Balázs has been appointed to oversee one of the first six sections of thefuture trans-European railroad network. Balázs himself will be in charge of the Paris-Bratislava line,while the Lyon-Budapest project will be coordinated by former Vice President of the EuropeanCommission and Commissioner for Transport. The European Parliament and member states approveda list of 30 major European road and railway projects that will receive central funding amounting to10%-20% of development costs in order to create a backbone for the European transport system.Scheduled for completion by 2020, the network is estimated to cost Euro 225 billion in total. (Nv 5) P.P.

Domestic

Gov’t subsidizes art cinemasThe Cultural Ministry is disbursing Ft 200 million this year for the development of the art cinemas. Thefunds for the development and reconstruction of art cinemas were established in 2003 by theMedgyessy cabinet in order to promote valuable (primarily Hungarian and European) art movies. Thefunds were granted Ft 500 million per year, however only in the first year was the whole amount used.In 2005 cinemas in 16 different towns and 4 cinemas in Budapest were supported. Unfortunately not allgranted subsidies could be used, the biggest amount granted, Ft 50 million for the modernization of Toldi cinema, remained with the fund as the construction works did not start within the first year. (Nb17) A.Sz.Euro 15 mln comes from EU to improve institutionsHungary will receive Euro 15 million in EU funding this year to improve the performance of its public

institutions, the National Development Office announced yesterday. The co-financing requirement for the money, which comes from a special EU fund to support institutions, will come to Ft 3.91 million. Of the funds, Euro 4.32 million will go to food safety institutions, Euro 1.78 million to institutions that train judges and Euro 3.2 million to institutions that promote civil society. (Econews)Court being built with illegal labor The National Tax Office (Apeh) and border authorities found illegal workers at a construction site,working on a new appeals court building in Györ, tax official Szabolcs Horváth said yesterday. Horváthsaid they had responded to information published by a local newspaper, and on Tuesday appeared atthe site to find 12 Ukrainian and Romanian workers who lacked work permits. The workers had no workcontracts and had entered Hungary as tourists. The investigation found that foreign laborers were insome cases being paid only Ft 1,000 a day, plus accommodations. The Hungarian citizens who workedat the site were unable to show contracts either but were given the chance to present them later. TwoUkrainians, repeat offenders, were ordered to leave Hungary and banned from returning, while theothers offered to leave the country on their own accord. (MTI; Nv 4, MH 6)

18



7/28/2019 7Days, 2005. július 25.



22 July 2005

Business

Swisscom wins tender for AntennaSwisscom Broadcast has been selected as the winner of a tender for a 75%-plus-one-vote state-ownedstake in terrestrial broadcaster Antenna Hungária Rt, the State Privatization and Holding Rt (ÁPV)announced yesterday. Swisscom Broadcast will pay Ft 46.76 billion for the stake. The stake has a

nominal value of Ft 8.91 billion. Antenna Hungária had consolidated net assets of Ft 23.02 billion at theend of March according to its preliminary Q1 report. Swisscom Broadcast must make a public purchaseoffer for the remaining shares in Antenna Hungária within 15 days of taking ownership of the state-owned stake. For the transaction the approval of the Hungarian, Swiss and European competitionauthorities is also required. (Econews; Nv 1, NG 7, MH 11)Holcim opens mobile concrete mixer Cement and concrete manufacturer Holcim Hungária Rt inaugurated a mobile cement mixer facility inErcsi outside Budapest. The Ft 200 million factory will service the construction of the M6 motorway. Themobile plant has an output of 95 cubic meters of concrete per hour and can be entirely relocated to anew site in just 10 days according to the company’s statement. (Thurs. Vg 10) A.K.GVH investigates bureaux de change

The Competition Office (GVH) started inspection against several currency dealers, on suspicion thatthey harmonize their exchange rates in order to restrict competition. Six bureaux de change of Exclusive company group are involved in the examination. The 160 units of the group apply about 100different exchange rates, head of Exclusive Change Trading Kft, Gyula Madarász said. Even the 50bureaux of the Kft have different rates, so the company is looking forward to the check, he added.Further companies involved in the inspection are And now Kft, Corner-Trade Kft, Northline Kft andGood Change Kft. (NG 5) G.R.NHH tells mobile providers to lower feesThe National Telecommunications Authority (NHH) has rejected interconnect fees proposed by all threeof the country’s mobile service providers and ordered them to lower their rates. The fees, which arecharged when a client makes a call to a network operated by another service provider, must be

changed with retroactive effect from May 25, NHH said. NHH said T-Mobile Rt and Pannon GSM Rtmust each lower their interconnect fees 10.38% (to Ft 27.17 and 29.44 respectively), and Vodafone Rtmust reduce its interconnect fee 16.48% (to Ft 32.61). The changes will reduce the difference betweenthe highest and the lowest interconnect fee to 20%. (Econews; MH 3, NG 5, Nv 5, Nb 13)Törley co’s reduce registered capital Torley Sparkling Wine has reduced its registered capital from Ft 7.4 billion to Ft 5.6 billion. At the sametime, a stake in Törley held by its subsidiary Balatonboglári Winery Rt (BB) has been transferred backand BB’s registered capital reduced from Ft 2.65 billion to Ft 50 million, business weekly HVG reportedin yesterday’s issue. The move is to eliminate cross-ownership between the firms and is part of therestructuring of the Törley group, which is owned by Germany’s Henkell and Sohnlein, Törley told theweekly HVG. The group’s net assets will remain unchanged. The group also includes Hungarovin Rt. Atthe start of the year Törley also became the exclusive distributor of Cinzano products. (Econews)

Dawnay Day invests in CEE real estateBritish property investment and financial services group Dawnay Day is preparing to invest over Euro 1billion in the CEE real estate market through its newly established regional subsidiary Dawnay DayCarpathian, the Financial Times reported. Hungary is among the key investment targets, along with theCzech Republic, Poland, Romania, Slovakia, Croatia and Bulgaria, where the company is focusing onretail space. Having bought four shopping malls in mid-sized Hungarian towns from Israeli developer Plaza Centers for Euro 57 million earlier this year, the company is gearing up for a new project that willcreate a new retail park in the satellite town of Budaörs, close to a logistics center it had acquiredpreviously. (Vg 19) P.P.

19



7/28/2019 7Days, 2005. július 25.



Sykes plans Miskolc call center Sykes Central Europe Kft, a subsidiary of Nasdaq-listed CRM solutions provider Sykes Enterprises,Inc., is planning to set up a second call center in Hungary, Regional CEO György László said, addingthat the center will be located in Miskolc. The decision came after Émász Rt, the regional power distributor for northeastern Hungary, renewed Sykes’ contract. The expansion is expected to createseveral hundred jobs in the unemployment-stricken region by 2006. Sykes currently operates a callcenter in Budapest, serving clients such as the city’s electricity provider Elmü Rt, Nokia Hungary Kft,

Samsung Electronics Rt, Hewlett-Packard Kft, Fögáz Rt and Malév Rt. The company is not planning torelocate operations to Slovakia even though it established call center in Kosice last year, László said.(Thurs. Vg 10) P.P. ÁPV postpones decision on Malév The State Privatization and Holding Rt (ÁPV) postponed the final decision concerning the privatizationof Hungarian airlines Malév Rt from end July to end September. ÁPV management decided on theextension because ASBK Kft, a consortium of Hungarian investors was recently joined in its bid byPolish airlines LOT. ÁPV will continue talks with both candidates ASBK and Russian owned Arbridge Rtuntil the deadline. Arbridge CEO Péter Leonov said that its offer is still higher than ASBK’s modifiedoffer, and it would also take on most of Malév’s Ft 36 billion debt. (MH 11) A.K.Démász ranked most transparent

Online stock market news portal Portfolio.hu published its 5th annual company transparency ranking.The ranking was based on a questionnaire completed by investment fund managers and analysts, inwhich the experts had to rate, on a scale of 1 to 10, the quality and credibility of published reports of companies quoted on the Exchange. Electricity supplier Démász Rt came in first with 8.52 points aheadof Magyar Telekom Rt, MOL Rt and OTP Rt. Fotex Rt was last on theranking with 3.18 points. (NG 7) A.K.Gyermely asks for official execution of verdict Pasta producer Gyermely Rt asked for official execution of the verdict against its competitor Mary-Ker Kft, according to a press release from the company. The Court decided earlier that Mary-Ker sold itsKorona pasta in packaging almost identical to Gyermely’s, and obliged it to remove its products fromthe stores. After having received the executor’s letter, Spar, Interspar, Kaiser’s and Auchan shops have

already removed the affected products from the counters. (NG 5) G.R.MÁV calls for new bids from Stadler and Bombardier Hungarian State Railways Rt (MÁV) yesterday asked both bidders in a disputed tender to deliver suburban rail vehicles to submit offers again, by August 1. MAV will announced the winner on August 5.MAV asked the two bidders, Switzerland’s Stadler and Canada’s Bombardier, to make their offersfollowing the guidelines prescribed by Hungary’s Public Procurement Arbitration Board. The boardnullified the previous tender for the vehicles, which was awarded to Stadler, on July 5. Stadler won thetender only after Bombardier’s offer was disqualified, because MÁV deemed its price for maintainingthe vehicles unrealistically low. (Econews; Nv 3, NG 5, MH 11)Délhús offer for Pick shares Ft 1,046 per shareMeat company Délhús Rt yesterday published a public purchase offer for Pick Szeged Rt, Hungary’sbest-known sausage maker, at a price of Ft 1,046 per share. The price is well under Pick Szeged’s netassets per share of Ft 2,699. Délhús’s offer, called for July 27 to September 9, was approved byfinancial market regulator PSzÁF on Tuesday, and by the Competition Office two weeks earlier. Thebuyout offer will be valid only if Délhús raises its stake to above 50%, a condition very likely to be met.(Econews; Thurs. Vg 11)Vegyépszer won biggest tender in H1Hungarian Public Procurement News Kft published an overview of the biggest public procurementtenders in H1 2005. Vegyépszer Rt won the biggest deal, for building sections of motorways M0 andM6 for the sum of Ft 37.1 billion, said the report. The biggest procurer was National Motorway (NA) Rt,it offered 11 tenders with value of Ft 69.1 billion in total. In second place came Hungarian StateRailways (MÁV) Rt with 35 tenders of over Ft 25 billion in total. The second biggest contractor isStrabag Rt with 23 contracts of Ft 9 billion; the third is the State Printing Company Rt, which won 4

contracts for a total of Ft 8.8 billion. (NG 4) G.R.

20



7/28/2019 7Days, 2005. július 25.



Baumit invests Ft 1 bln in Dorog Baumit Kft, 100% owned by Austrian Wopfinger Beteiligungs GmbH, will spend nearly Ft 1 billion onadding a new limestone mill and a packaging line to an existing plant in Dorog, northwestern Hungary.Production at the new mill is scheduled to start next year, the company said. The upgrade of another Baumit plant in Pásztó, north of Budapest, is currently underway. Buoyant demand for constructionmaterials in Slovakia has helped Wopfinger grow dynamically in Hungary in spite of the recent declinein residential development, according to the management. Baumit’s sales revenues totaled Ft 7.7 billion

in 2004, up from Ft 7.5 billion a year earlier. (Vg 12) P.P.Sole proprietors 2004 average turnover Ft 6.2 mlnThe number of sole proprietors decreased by 10,000 to 459,000 in 2004, according to figures publishedby the National Tax Office (Apeh). Their average yearly turnover was Ft 6.2 million, up only 2% fromthe previous year. Some 96% of them had revenues below Ft 25 million, and 80% below Ft 5 million.The greatest growth was shown by bakeries and freighters. The average yield reported by soleproprietors for the previous year was Ft 602,000 - less then half of the average income reported byemployees. (NG 3) G.R.Leasing market growth slows in first half Growth on Hungary’s leasing market continued to slow in the first half of 2005, according to figuresfrom the Hungarian Leasing Association. Association members provided leases for assets worth Ft

536.63 billion in H1 2005, just 4.4% more than in the same period a year earlier. In H1 2004, leasingcompanies’ assets increased 17% yr/yr. Leasing companies’ outlays rose by just 3.4% yr/yr in H1 2005to Ft 390.78 billion. Some leasing companies performed well above the industry average. CIB LeasingGroup saw its outlays rise 16.7% to Ft 65.3 billion during the period. Lombard Financial and LeasingRt’s outlays rose 12%, Budapest Lizing’s increased 10.8%, MKB-Euroleasing Rt’s grew 8.5% and ErsteLeasing’s were up 8.4%. (Econews; NG 4)Futureal asset value up 22.4% in H1Futureal 1. Real Estate Investment Fund published its H1 report on the homepage of Budapest StockExchange (BÉT) Rt. According to the report, the fund showed considerable growth in the value of itsreal estate holdings, reaching Ft 2.9 billion. The asset value per bond also increased from Ft 17,402 toFt 21,308 during the first six months of the year, or 22.4% growth. Besides real estate, the fund had Ft

1.4 billion liquid assets at the end of the period. (NG 7) G.R.Economics

Kovács says local business tax not in line with EU EU Commissioner in charge of taxation and customs László Kovács has said Hungary’s revenue-basedlocal business tax does not conform to EU rules. „In my opinion, the business tax does not conform withthe requirements of the EU,” Kovács said at a press conference organized by the Hungarian EuropeanBusiness Council in Budapest yesterday. He said that EU rules allow for only one turnover-based tax inmember states, but Hungary has two: its value added tax and the local business tax. Kovács also saidhe had already informed the government of his opinion and stressed that the tax must either bereduced or changed to a profit-based tax. Kovács said it was worth waiting for the EuropeanCommission’s decision on the matter, but added that the Commission had started a procedure against

Italy because of a tax similar to Hungary’s local business tax. (Econews; NG 1, Nb 1, MH 12)Retail sales up 5.7% yr/yr in May The volume of retail sales in Hungary was 5.7% higher in May than in the same month a year earlier,according to work day-adjusted figures published by the Central Statistics Office (KSH) yesterday.Retail sales volume in May rose 0.3% from April, according to seasonally and working day-adjustedfigures. Five-month retail sales volume was up an adjusted 4.6%, compared to the same period in2004. The figure compares to a 5.7% increase in retail sales volume in 2004. In Jan-May, retailturnover was Ft 2,033.8 billion at current prices. The figures exclude sales of vehicles, vehicle parts or fuel. Including sales of vehicles, vehicle parts and fuel, retail sales volume rose 4.3% yr/yr in May, androse 2.9% yr/yr in volume terms in the first five months of 2005, according to unadjusted figures. (MTI;MH 11)

21



7/28/2019 7Days, 2005. július 25.



Politics

Gov’t to simplify public procurement The Justice Ministry will propose amendments to the Public Procurement Act in the fall to simplify thesystem of state tenders and reduce the amount of red tape associated with such procedures. In order to remedy the current situation in which local governments are required to call tenders for trivial projectsat an unreasonable cost, the ministry would raise the minimum project value mandating a publicprocurement tender, among other changes, Deputy State Secretary Gábor Gadó said. The ministry isalso suggesting that a negotiation phase should precede the bidding phase of such tenders with theaim of working towards mutually convenient solutions. (Vg 1) P.P.

Domestic

Almost ? of Hungarians have no savings As many as 72% of Hungarians have no savings or investments as against 23% of WesternEuropeans, a study prepared by economic researcher GfK in cooperation with Wall Street JournalEurope shows, GfK director Ákos Kozák told the press in Budapest yesterday. The rate of those withsavings (28%) is low not only compared to Western Europe’s 77%, but also when compared with other central European countries where 34% of people have savings and/or investments, said. Even whenHungarians do save, they tend to put their money into low-return funds, Kozák said. One-third of Hungarians who have savings put their money in low-yield bank accounts and just a tenth invest instocks or share-based mutual funds, he added. This means only 3% of all Hungarian households ownstocks as against 9% in Western Europe, Kozák said. (MTI; NG 4)Storage shortage halts harvest The wheat harvest had to be suspended in the vicinity of Berettyóújfalu, eastern Hungary due to ashortage of storage space. In an area of 40 km around Berettyóújfalu it is impossible to find storagespace, said Zsigmondné Kovács, president of the town’s farmer’s association. In an effort to cope withthe storage problems created by the expected 16 million-17 million ton bumper wheat crop, the Agriculture Ministry modified storage regulations and sped up the construction of an additional 2.5million tons of storage space. (NG 4) A.K.



7days, 2005. július 25

Documents