Mayor of Budapest Gabor Demszky was shocked to see a watered down version of the government’s earlier promises to help straighten out finances at the ailing Budapest transport company BKV, Nepszava daily reported on Tuesday.
According to information obtained by the paper, Demszky received a draft contract on Friday, which contained “weakened” elements compared to a preliminary agreement on the bailout between the city and the government sealed in December. Demszky initiated modifications to the contract in a letter to Finance Minister Peter Oszko on the same day, Nepszava was informed.
In December, the government promised extra funding of 5 billion forints (EUR 18.8m) for BKV, which it has recently transferred. Further commitments were another 5 billion forints due in April and 7.4 billion forints in July. The government – facing general elections in April – has deferred the pledge of an addition 5 billion forint credit line due at the end of 2010, the paper said.
The draft contract also set new conditions to the promised funding – it says that the state will only guarantee these if “certain conditions in the Budget Act are met,” the paper said. Another new element is that the contract can be terminated by either party within 30 days without reason, the paper added.