László Szíjj and Lőrinc Mészáros, both individually and together, are well ahead of the field in terms of the total value of tenders won by their interests, according to Transparency Interantional (TI) Hungary’s newest analysis. TI Hungary’s new Tender Champions platform, published at the same time as this analysis, focuses on the business community that has been the main beneficiary of public procurement in recent years. By linking data on public procurement, company information, and public offices, TI Hungary has made it possible to analyze the performance and concentration of companies that have won public procurement contracts, as well as their interconnections with the state and local government institutions, in graphic form. 

Following the 2010 elections, Parliament declared the establishment of the System of National Cooperation (NER) in Hungary. In recent years, the intertwining of some business people and the government has largely determined the way public money is spent in our country. The European Parliament labeled the Orban regime a “hybrid regime of electoral autocracy” in 2022. In Hungary, the democratic system of checks and balances was dismantled by the middle of the last decade, leading to a particular, “political” form of state capture. This means that an informal group of politicians, oligarchs, and businessmen, working closely together, have taken over most public institutions and are serving particular and private interests rather than the public good. In most cases, the Prime Minister has the “final say” in the process. In the context of public procurement, state capture mainly targets authorities controlling the distribution and fulfillment of contracts, as these are the primary distributors of public funds. 

Transparency International (TI) Hungary’s new Tender Champions platform, published at the same time as this analysis, focuses on the business community that has been the main beneficiary of public procurement in recent years. By linking data on public procurement, company information, and public offices, TI Hungary has made it possible to analyze the performance and concentration of companies that have won public procurement contracts, as well as their interconnections with the state and local government institutions, in graphic form. 

The information presented on the platform includes data from companies whose main source of revenue comes from public procurement. However, the amount awarded is not usually realized in the year in which the result of the tender is announced. In most cases, the public procurement contract is won by the contractor in the years preceding the implementation. Therefore, there is a difference between the date of the public procurement’s result (publication of the contract award notice), i.e., the selection of the winning bidder, and the date when the procurement or development is paid to the company. Therefore, in the selection of the companies concerned, the net revenue of the companies in a given year (2021) was compared with the total value of the public procurement contracts awarded in the previous three years (1 January 2018 to 31 December 2020). We selected the companies for which the value of tenders awarded between 2018 and 2020 exceeded 50 percent of their net revenue in 2021, and whose net revenue in 2021 exceeded HUF 100 million. We have made available and analyzable data on more than 2,700 companies, 30,000 tenders, and more than 5,200 final owners. 

Our platform and analysis aimed to compare the performance of firms in public procurement with their business results, as well as to demonstrate the concentration and relationships with authorities by linking the final owners. These two factors have a major impact on the efficiency of competition in the public procurement market, i.e., which actors have a high level of access to public and municipal contracts and which advantage they can gain from their other positions, which may even raise suspicions of conflict of interest. Due to the nature of the data available, proxy indicators were used in some cases. The value of the public contracts awarded in a consortium – in the absence of precise shares being known – has been taken into account in proportion to the number of members. 

We have used red flags to highlight companies and owners that are in some way high-risk in each category. Companies could receive a maximum of four red flags, while final owners could receive a maximum of three. The risk indicators refer to the companies that have won the highest number of and the most valuable public contracts, the final owners of such companies, their profits, the positions held by the final owners in state or municipal organizations, and the number of mentions in the press. Four companies and 14 owners received a red flag in each category. However, it is important to note that the extreme scale of these red flags is often more significant than their total number.  

The main results are summarised below: 

• Duna Aszfalt Út és Mélyépítő Ltd., a company owned by László Szíjj, won the highest value of public contracts in the 2018-2020 period with a total worth of more than HUF 626 billion. 
• László Szíjj and Lőrinc Mészáros, both individually and together, are well ahead of the field in terms of the total value of tenders won by their interests. In the period under review, Szíjj’s companies were involved in tenders worth HUF 914 billion, while Lőrinc Mészáros’ companies were awarded HUF 633 billion, including both their privately owned and their jointly owned interests. This means that László Szíjj’s companies won 10 percent of the total value of the public contracts available in the three years, while Lőrinc Mészáros’ companies won 7 percent of the same amount, not counting the results of their family members’ businesses. 

• Gyula Balásy’s companies, in third place, won 3 percent of all the public contracts examined, worth HUF 254 billion. 
• In our analysis, 2 percent of all surveyed owners (118 individuals) were found to hold at least one public office between 1 January 2010 and 30 September 2022.

You may find TI Hungary’s new analysis, the Tender Champions in English here. You may access our new interactive platform, the Tender Champions in Hungarian following this link.