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hvg.hu

Apollo Tyres's decision to can its proposed investment in Gyongyos has created two losers: the company itself and the local authority. In the absence of an impact study, it is impossible to say if there was anything to the environmental concerns that were floated.

At close of press, some 40 towns - including several Fidesz-led towns - had informed ITD Hungary, the trade promotion agency, that they would be prepared to host the planned investment, following Apollo's decision to withdraw from the Gyongyos Industrial Park. For many, this will have been in vain: Apollo insists that its first factory and technology centre in Europe should be no more than an hour from Budapest, assuming it does not opt to go to another cuontry. On Monday, the company said in a statement that it was impressed by the level of interest expressed. Hungary pipped its old rival Slovakia at the post in attracting the world's 16th largest tyre manufacturer.

During his visit to India, Ferenc Gyurcsany, the prime minister, was keen to point out that the level of state subsidy promised - around Ft7bn, HVG understnads - was one seventh less than Slovakia had promised to the company, which is planning a European expansion.

But the Jobbik, a far-right party, campaigned against the investment under the slogan "Our health and our heritage is not a business." They rejected "an investment that does not fit into our natural environment and which will ruin our heritage." The Lower Matra Civil Society Movement also campaigned against it, saying it would damage the environment and damage workers' health. The movement's leader, Laszlo Tatar, is also the head of Fidesz's group in the local authority assembly. Since he is a doctor, his health warnings carried some wait in the town, whose council has a Socialist majority. The final blow came when the civil society group and Fidesz called a referendum on the invvestment. Although Apollo said in its statement that it wanted to avoid dividing the local community, it added that this was not the only reason for its decision.

Every aspect of the investment was behind deadline. The original plan envisaged that the foundation stone for the factory would have been laid in April, with production starting 18 to 20 months later. The E300m investment would have taken place in two phases and employed some 1,500 people. But the company had only obtained options on 45ha of land - in a contract that the local Fidesz faction had opposed - which it could have bought for Ft673m. But the local authority had not yet managed to pass the area on to the buyers. ITDH explains the delay by saying that the various permission-granting authorities were divided and that there was far less cooperation that there had been in the case of Kecskemet when it attracted a Mercedes factory recently.

The project was a full year late - even before a study had been prepared on the environmental risks it posed had been prepared. Apollo Tyres had commissioned a preliminary study for April. This study is necessary if the environmental protection authorities are to comission a full study which will allow them to authorise or reject an investment. This study would have shown what levels of harmful emissions the plant would have produced, and it would have detailed the technologies the plant was to use. This report was never commissioned - or at least the company made no submission to the authorities. It is clear from the preliminary documentation that Apollo intended to use standard technologies - meaning that the plant would have met EU guidelines. But Tatar claimed the company intended to use another technology that will be banned in 2009.

The local authorities concerned received all the preliminary documentation that was available. No response was made during the month that was available to do so, HVG understands, other than a letter urging that the impact study be carried out as soon as possible. Gyongyos's air quality is exceptionally good, furthermore, and getting better by the year.

Gyongyos's mayor claims that Apollo's withdrawal has cost the local authority Ft600m. It has cost the Indian investor as well. In national political terms, government politicians have tried to profit from Fidesz's actions in Gyongyos. The Socialist MP Gyorgy Poodolak blamed Viktor Orban, the party leader himself. Gordon Bajnai, the economics minister, forced 27 local authorities to issue a statement saying Hungary would be glad to receive the investment.

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