Wall Street Journal Blog - Hungary’s Orban Surprises With Claims to Protect Water Supply

February 11, 2010

By Veronika Gulyas

Hungary’s opposition party Fidesz leader Viktor Orban in his “State of the Nation” speech spoke last week about his party’s plans and the overall direction once it won the general elections in April. One curious element of the speech, however, was his remark on commitment to protect Hungary’s water supply.

“People will only have jobs in Hungary if we protect Hungarian products, if we protect Hungarian goods, if we protect Hungarian land and if we protect the Hungarian water supply,” Orban said.

So far, land was high on Fidesz’s list of Hungarian valuables, just like energy supply and workplaces. Raising the issue of water supply is new and might be prompted by a certain background deal–back in the time of the previous, also Socialist government–that an investigative journalist made public Tuesday.

The article on online news agency Index.hu claims the Hungarian state planned the privatization of the state-owned water utilities, when attempting to reorganize the companies. The journalist obtained a draft on the plans written by the state asset manager MNV Zrt. although the government has since denied such plans.

“Instead of keeping companies that operate water utilities strictly in 100% state/local government ownership, it would be expedient to allow investors to enter the ownership structure while retaining a majority state/local government ownership. To achieve this, it is necessary to modify part (1), paragraph 9 of the law on water utilities,” says the MNV proposal dated March 9, 2009.

The article also claims that the government–the previous one–entered a secret deal with France’s Veolia Eau an affiliate of French water, waste, transport and energy services group Veolia Environnement (VE), and France’s Suez Environnement SA (SEV.FR), which allegedly divided the ‘water market” of Hungary among themselves.

While the finance ministry, the asset manager and Suez refuted the claim, Veolia denied to comment to Dow Jones Newswires.

Finance Minister Peter Oszko called attention in Hungarian daily Nepszabadsag to the fact that he replaced the MNV’s management soon after he became minister, and that the ownership of the water utilities haven’t changed ever since.

No matter what, the water utility issue now has become part of Fidesz’s pre-election arsenal.

Read this story in the Wall Street Journal Blog.

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