The European Commission informed the Hungarian Government in its letter of 13 September 2010 that it would suspend the interim payments of the Transport Operative Programme. The reason for the Commission’s decision was a report on the system audit of the operation of the Transport Operative Programme between 1 January 2007 and 15 September 2009, which revealed major shortcomings. The Government of National Affairs had already experienced the irresponsible practice of the previous government in the course of the takeover procedures in the summer and thus took immediate action still during the summer in precisely those areas identified by the Commission. The measures taken are specifically intended to prevent the country being irrevocably deprived of these EU development resources due to the governance of the previous socialist leadership that ignored national interests.

In order to lift the suspension as soon as possible, the Ministry of National Development has been negotiating continuously with representatives of the European Commission, and Minister Tamás Fellegi held talks on the matter in Brussels last week. The National Development Agency advised the Commission’s experts at a managerial level at the end of September of the measures taken and of the changes to the law on public procurement that had already been adopted.

According to the report suspicion of irregularities arose in certain elements of 53 public procurements, and in 15 of these instances the procedure itself was deemed anomalous. In these cases the position of the Commission is that there is a suspicion that unjustified payments were made from TOP funds.

The Commission’s decision is good evidence of the inadequacies of the development policy of the governance of recent years. The Ministry of National Development believes it is regrettable that yet another failure of socialist governance should receive widespread EU attention, but at the same time wishes to emphasise the series of measures initiated during the summer and the amendment of the law aimed at increasing the transparency of public procurements, and thereby convince the Commission that the back-turning, gaze-averting policy encountered earlier in Hungary in the field of public procurements has come to an end.

In accordance with the contents of the Commission’s letter, as an immediate measure of the Government, the TOP Managing Authority of the National Development Agency has accelerated its investigation of the irregularities, started on 30 June 2010, which focuses on the contracts objected to. At the same time, framing an amendment to the law which aims to reinforce the effectiveness of controlling public procurements has begun, and in parallel with this, the National Development Agency has initiated the creation of an independent department responsible for the control of public procurements and for devising a viable methodology through a proposal to amend the Agency’s Organisational and Operational Rules. Among its duties will be the strict preliminary inspection of public procurements affecting EU resources.

The above action taken in connection with the report sent to the Commission also needs to comply with the expectations of the Hungarian controlling authority.

Ministry of National Development Communications Department
Budapest, 11 October 2010