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Audit Office files police report over CET project

Hungary's State Audit Office (ÁSz) said it filed a police report in connection with a public-private partnership project on the banks of the Danube in Budapest.

The project includes a 27,000-sqm complex of steel and glass dubbed CET, a new landmark of the capital which resembles an enormous whale incorporating two existing warehouses.

ÁSz said that its audit of the Budapest Municipality's financial reports suggested evidence of criminal activity and negligent business conduct resulting in the accumulated loss of assets.

The project is among 50 of the Budapest City Council's gravest troubles inherited from the previous city leadership, contained in its "white book" published on Wednesday.

Porto Investment, the investor, had undertaken to cover only €3.1 million of the total €30.8 million cost. The company took out the remaining €28.4 million as a loan from MKB Bank.

It said that the previous city leadership had agreed to repay the entire sum if Porto was unable to pay it back. The head of the city's committee for preferential development projects had not been authorized to sign contracts related to the project, it said.