Brussels considers gigantic penalty for Hungary over Közgép exclusion

Following a legally binding court ruling that suspended the exclusion of construction company Közgép from public procurements in Hungary Brussels is considering a much larger fine for Hungary than HUF 1.6 billion, local business daily Világgazdaság reported on Tuesday.

 The paper said there are two approaches for the calculations of the potential fine:
  • The starting point for the first would be the number of public procurements Közgép was barred from by the exclusion decision. (Note that the company did not even run in public procurement tenders on several occasions, so this approach may not be the best choice.)
  • The other approach considers a lump sum fine relating to the two Operating Programmes the company was excluded from. Due to the illegal restriction of competition the latter could imply a financial penalty totalling 25% of the contracted amount. According to the paper, this may reach a fine of HUF 85 billion, considering the budget of the 7-year programmes, the Integrated Transport Operational Programme (IKOP) and the Environmental and Energy Efficiency Operational Programme (KEHOP) and that Közgép was excluded from these for a year.

Hungary would be facing an even bigger fine in the 2014-2020 programming period if – under EU regulations – a 100% correction was made in every case “when certain bidders are to be deliberately excluded from the procedure”.

As far as the paper is concerned Közgép has not yet brought action against Hungary in court over its exclusion from public procurements in the last year.

The author: Michel DEURINCK

Michel Deurinck, born in Brussels in 1950, started his career in the Belgian civil service, dedicating over 30 years to public service. Upon retirement, he pursued his passion for journalism. Transitioning into this new field, he quickly gained recognition for his insightful reporting on politics and culture. Deurinck's balanced and thoughtful approach to journalism has made him a respected figure in Belgian media.

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