By Alexandra Schwarz-Goerlich and Gergely Szakacs VIENNA/BUDAPEST (Reuters) -Legislation working its way through Hungary's parliament and reviewed by its economic affairs committee on Monday could bar
Hungary's New Legislation Could Exclude Strabag from Contracts
Impact of Legislation on Strabag
By Alexandra Schwarz-Goerlich and Gergely Szakacs
Background on Strabag's Operations
VIENNA/BUDAPEST (Reuters) -Legislation working its way through Hungary's parliament and reviewed by its economic affairs committee on Monday could bar Austrian construction firm Strabag from public bids after a dispute with the government over a damaged motorway.
Government's Stance and Criticism
Under a Hungarian government contract, Strabag, one of Europe's largest builders and the third-largest operating in Hungary, built 10.4 km (6.5 miles) of the M30 motorway that forms part of a strategic road link between Budapest and Kosice in neighbouring Slovakia that opened in 2021.
Future Implications for Foreign Firms
However, the company's relationship with Prime Minister Viktor Orban's nationalist government has soured over the closure early last year of Strabag's portion of motorway due to subsidence that caused an embankment to collapse.
Budapest blames Strabag and says the stretch should have reopened last month. Strabag says unforeseeable groundwater movements are to blame, and fixing the problem will require long and complex construction work that is now underway as agreed.
"If it were up to me, foreign companies would sink in Hungary like the M30 under Strabag's hand," Transport Minister Janos Lazar said in a video posted on social media last month.
Orban's government has submitted a draft amendment of public procurement rules to parliament that would bar from public tenders any companies that have committed "serious breaches of contract" relating to public building projects in the past five years, including those that do not carry out work on time.
MINISTER ACCUSES STRABAG OF 'EXPLOITING' HUNGARY
The text does not mention Strabag specifically but comes at a time when Lazar, who submitted the bill, is directing fierce criticism at the company, which is still taking part in various public tenders in Hungary, its sixth-biggest market.
"For decades, the Austrian company Strabag has been exploiting this country's vulnerability, its weakness, its lack of money, and now the time has come to show that we will not let ourselves be pushed around," Lazar said in a video posted on social media on Sunday.
"Our poverty, hardship, and torment are partly due to how much space we have given over to foreign companies. We must reclaim our homeland inch by inch, square metre by square metre," he added.
The Hungarian government was not immediately available for comment. Strabag has declined to comment on the draft amendment.
(Writing by Francois MurphyEditing by Gareth Jones)
