Miklos Vancsura, chief executive of the Heviz hospital, was cooking for guests on his name day, as he does every December. He had fetched the ingredients from Baja in the morning, and was already in the process of cooking. At the time, he had no idea that three of his guests would be voting for his dismissal at a sitting of the local council.
On 14 December, the council voted 7-5 to dismiss Vancsura, who has been running the hospital for 18 years. They also dismissed the hospital's supervisory authority. "At a meeting two days before I already suspected that Arpad Vertes, the mayor, would call a meeting to discuss the hospital, since we could have taken the decision that day. Furthermore, he did not say what it would be about. He said simply that members would receive the agenda on the day. But Ilona Gal, a state secretary in the Ministry of Health, who turned up for the meeting, just read out the motion for voting," remembers Gabor Papp, a local councilor, who was opposed to the director's dismissal. The councilor is considering turning to the Public Administration Authority regarding what he believes may have been an illegal maneuver.
The charity that runs the thermal bath, the hospital, and the lake attached to it was set up in autumn 2004. It is 74 per cent owned by the state, with the remainder held by the local authority. At that time, a major refurbishment was already in progress. The charity applied for HUF868m in funds from the Szechenyi Plan, and in the event won HUF750m. Under the terms of the subsidy, the charity had to come up with 25 per cent in matching funds. Since the hospital could only borrow a limited amount of money, the size of the investment was set at HUF1.93bn.
"We already knew that the charity's owners were aware that the investment would cost HUF2.2-2.5bn. All we could do was set the refurbishment costs at a lower level, since otherwise we would have had no chance of winning the subsidy," Miklos Vancsura told hvg.hu. At the 14 December meeting, Ilona Gal accused him of exceeding his budget. Vancsura rejects this allegation: a board meeting in December 2005 approved a budget of HUF2.3bn for the refurbishment project. Of this, HUF1.5bn had been spent, meaning that a further HUF900m had to be found.
Since 19 May, the chief executive has found himself explaining these numbers continuously, even though the first stages of the investment went according to plan, with the first new developments opened to the public in March and June of this year. New changing rooms have been built, there is a new main entrance, a new summer entrance, the main building has been refurbished, there is a new sun terrace and a new children's pool. The electrical system has been rewired and a new turnstile system is in place. The final phase of the refurbishment should have been approved at the 19 May meeting. The final phase would have included a new entrance, a wellness centre and a heated changing room for 750 people. But the director did not receive approval from the owners. The ministry asked to see a strategic business plan in order to be sure of getting a return on its investment.
The hospital arranged a 15-year, HUF863m loan facility with CIB Bank, which it has already used. Beyond this, the hospital had a guaranteed loan facility of HUF900m which it had not yet used. Vancsura said the hospital could reclaim HUF500m in VAT from the HUF2.5bn investment, allowing them to access a further HUF500m in credit. The hospital needed the money urgently, since the tender to carry out the final phase of the refurbishment had already closed. The Zalaegerszeg State Building Company (ZAEV) had undertaken to carry out the works for HUF958m. The hospital was also facing deadline pressure: it would be obliged to repay the Szechenyi money if the investment was not 75 per cent complete within two years of receiving the money.
If the investment had been approved in time, the deadline could have been met. But the delays meant that 100,000 fewer people would arrive at the thermal spring each year. Furthermore, the prospectuses sent abroad boasted of the new buildings. If guests did not see these, then they would leave with a poor impression of Hungarian hospitality.
Vancsura produced a business plan for the ministry, but the owners - the ministry and the local authority - decided on the strength of two anonymous letters, to hold an inquiry. The two letters arrived at the Heviz mayor's office and were forwarded to the ministry. One accused the contractors of using "crumby materials" and having no sense of style. After a month-long investigation, the architect Ambrus Huszar concluded: "The investor carried out all due diligence with regard to the planning, organization and execution of the investment, and the result of the planning was an estimated cost of HUF2.5bn. I have concluded that this sum is realistic. For my part, I recommend that the project continue until completion."
Lajos Molnar, the health minister, saw this report, and recommended to Vertes that the project be allowed to continue without calling a board meeting. But the mayor nonetheless called a meeting, at which he did not tell board members about the minister's letter. The board, unaware of the minister's view, recommended that the Vertes discuss the matter with Molnar.
After several weeks, on 12 September, Molnar received Vertes for 10 minutes. The elections came, no further board meeting was held, and finally a meeting was announced for 3 November. This meeting was torpedoed when six members failed to turn up, making the board inquorate. Gabor Papp, the councillor, believes this must have been intentional: "The councilors' offices and the local authroity building are within 200m of each other," he explained. A further meeting was scheduled for 1 December - but on this occasion the ministry failed to turn up. Finally, a meeting was held on 14 December, at which a majority was found to vote for Vancsura's dismissal.
It is not clear why the minister changed his mind, first supporting then sacking Vancsura. It is likely that the dismissal was the result of a deal cut in the background. Arpad Vertes is likely to have played a role in this deal: he has been dueling Vancsura in Heviz for years.
hvg.hu understands that the minister was placed under serious pressure from people who wanted to see Vancsura sacked. It proved possible to get the chief executive sacked in total secrecy. We understand that leading Socialist politicians in Parliament were also surprised by the development. The fact that Ilona Gal was able to present a pre-signed letter from the minister supporting Vancsura's dismissal shows how well-prepared the entire maneouvre was. Gal wanted a closed meeting, but she was informed that this was not possible with a charity.
Vancsura, who has degrees in hydraulic engineering and economics, is not accused of professional incompetence. The refurbishment programme was proceeding according to plan. A plan he developed one year ago to refurbish the entire campus even became a centrepiece of the Socialist Party's electoral campaign. At the same time as it voted to dismiss Vancsura, the board also approved this plan.
Applications are now being solicited for the post of chief executive. Rumour has it that one candidate is Peter Papp, commercial manager of Nagykanizsa Hospital. When he was dismissed, Miklos Vancsura announced that he would apply for the position. But Ilona Gal said at the time that the ministry thanked him for his work, but "it does not envisage a future involving him."
Péter Zsidai
