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MKB Bank sues City of Budapest

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MKB Bank on Friday said it sued the Budapest local council for €25 million plus interest over a contract on the construction of a cultural center.

MKB Bank said it filed the suit with the Budapest Municipal Court on the basis of a contract signed with the council and Porto Investment Hungary, which won a contract to build and operate a cultural centre in an old warehouse district on the banks of the Danube in a Public Private Partnership several years earlier.

Porto investment Hungary took out a €28.4 million loan from MKB Bank for the €30.8 million investment.

The cultural centre, dubbed "CET", was to have been inaugurated in the summer of 2010, but construction was halted before it was completed.

The local council established in a review that the PPP was not to the capital's advantage and it took issue with the quality of the investment too. The council mandated the mayor last year to see damages from the city's partner in the project.

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