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Government buys back water supplier

April 29th, 2013

A pro-government commentator welcomes the government’s decision to buy the Pécs municipal water provider company. The leading left-wing liberal daily, on the other hand, finds it unacceptable that taxpayers have to pay for lower energy prices through the renationalization of the utility sector.

The Hungarian state will pay 3 billion forints in damage to compensate the French co-owner of the Pécs water company. The renationalization of the company was initiated in 2009 by Zsolt Páva, the mayor (Fidesz), who claimed that the Suez-appointed management was primarily interested in profit and higher prices rather than an affordable and quality service. Páva in 2009 commissioned a new company to run the business. The French partner, Suez filed a legal suit to reclaim the fees for the remaining 11 years of the contract (Suez was given a 25-year contract by a former Socialist city council). The 3 billion forints compensation brokered in an out of court agreement approximately covers the losses incurred by Suez since 2009. The MSZP announced that it would file a complaint so that the details of the deal will be made public.

In Magyar Nemzet, Matild Torkos welcomes the agreement. The pro-government columnist remarks that as a result of the government’s decision to cut energy prices and levy surplus taxes on energy providers, Suez made a reasonable decision to sell its shares, since it could expect no significant profit. Torkos declares that the privatization of energy providers by the former Socialist governments was unfortunate, since in the past years the new owners earned nearly twice as much in “extra profits” by raising the prices twofold between 2001 and 2010 as the acquisitions cost.

Népszabadság in a front page editorial writes that at the end of the day, Hungarian taxpayers will have to shoulder the cost of the battle waged by Fidesz against foreign owned energy providers. The left-wing daily suspects that other providers will soon follow the example of Suez and cancel business in Hungary as a result of the government’s campaign against for-profit companies. If the Budapest leadership decides to follow the Pécs example, taxpayers will need to pay a lot to compensate the current owners, Népszabadság suggests.