"The Hungarian government has decided to suspend a project to build a new government quarter at its meeting on Tuesday, government spokeswoman Bernadett Budai announced. She stressed, however, that planning for the project would continue.“The government quarter project is suspended by the cabinet, but planning will continue," Budai told a press conference after today's government meeting.
“The project will not be halted, only suspended," she stressed, adding that the cabinet has not given up on its plan to have a new city centre built on the site where the new government quarter was to be built, MTI reported.
A total of eight consortia put in bids in the first round of the tender for the construction of the complex and the winner was to be announced on 29 December 2007, but the decision was later put off to 16 January this year. The government quarter was scheduled to be completed by the end of 2009.
The construction, that was to be carried out in public-private-partnership (PPP), was to cost up to HUF 142.5 bn, with the winning general contractor financing the entire cost of construction and operating the complex for 25 years.
The government planned to partly finance the project from the sale of its expensive downtown office buildings, but real estate experts estimated that the buildings would fetch much less than the planned HUF 103 billion.
The hopes of those offering their property near the “future government quarter" above market price have now been crushed, Duna House said in a flash comment today. The price hike bubble already burst last year when the location of the government quarter was announced and investors failed to rush to the seen to pluck up available real estate. “Due to the (government's) decision this will probably not happen for now," Duna House said."
Source: Portfolio Online Financial Journal
09.01.2008