BUDAPEST — Hungary’s new government is moving to dismantle one of the country’s largest infrastructure contracts, putting a 35-year motorway concession valued at about 23.2 trillion forints ($73.3 billion) under direct legal and financial challenge.
Prime Minister Péter Magyar’s government announced that it intends to terminate the concession awarded in 2022 to MKIF Magyar Koncessziós Infrastruktúra Fejlesztő Zrt., which operates and develops a large portion of Hungary’s motorway network.
The government argues that the contract places too much financial risk on the state and may not qualify as a genuine concession under European Union rules.
But there is an important complication: the contract cannot simply disappear overnight.
MKIF controls infrastructure, equipment and personnel needed to operate the affected highways, and the company has indicated that it will first wait for the government’s formal written notification before giving a substantive response.
If the two sides fail to agree on an orderly exit, the dispute could ultimately move into arbitration or lengthy legal proceedings.
A $73 Billion Contract Spanning 35 Years
The motorway agreement was signed under Viktor Orbán’s previous government in 2022.
It covers the operation, maintenance and development of a large portion of Hungary’s motorway network for 35 years, running through 2057.
MKIF says it initially took over responsibility for 1,237 kilometers of existing expressways on Sept. 1, 2022.
Under its contractual obligations, the company also committed to building 279 kilometers of new expressways by 2034 and widening another 299 kilometers of existing roads.
The Hungarian government now says the full contractual value is approximately 23.196 trillion forints, equivalent to about $73.3 billion at the exchange rate cited by Reuters.
That does not mean Hungary has already paid $73 billion.
The figure represents the government’s estimate of the total value of payments and obligations over the life of the 35-year agreement. Reuters reported that approximately 870 billion forints had been paid so far.
Why the New Government Wants Out
Hungary’s Transport and Investment Minister Dávid Vitézy has argued that the structure of the contract transferred too little genuine operating risk to MKIF.
That distinction matters because risk transfer is central to the legal definition of a concession under EU rules.
In a conventional concession, the private operator generally takes on significant operating or market risk in exchange for the right to operate the asset and generate revenue.
The Hungarian government says that, in this case, too much of that risk remained with the state.
Vitézy has therefore argued that the agreement may have been incorrectly structured as a concession rather than as a public procurement contract.
If that interpretation is upheld, the government says the legality of the original procurement and subsequent contract modifications could be challenged.
The European Commission Had Already Raised Red Flags
This controversy did not begin with the new Hungarian government.
The European Commission opened an infringement procedure against Hungary in 2024 concerning the motorway concession.
The Commission has raised concerns about whether the 35-year contract transferred sufficient operating risk to MKIF and whether the agreement was properly classified as a concession.
It has also questioned subsequent modifications to the contract.
In a later formal notice, the Commission said the contract’s duration could exceed the period permitted under the EU Concessions Directive and that certain modifications appeared inconsistent with EU public-procurement rules.
That gives the new government a significant piece of supporting evidence for its legal challenge.
But an EU infringement procedure does not automatically cancel the contract.
The Hungarian government still has to determine how the agreement can legally be terminated and what consequences could follow.
MKIF Says It Took on Real Risks
MKIF has rejected the government’s characterization of the arrangement.
In comments cited by Reuters, MKIF CEO Tamás Németh said the company had assumed substantial risks involving traffic volumes, design, construction, financing, maintenance and changing macroeconomic conditions.
That is the core dispute.
The government says the private operator did not take on enough risk to justify the concession structure.
MKIF’s position is that the company has assumed significant commercial and operational risks under the agreement.
Until a court, arbitration panel or negotiated settlement resolves the issue, those competing interpretations remain disputed.
The State Has Already Paid Hundreds of Billions
The financial stakes are already substantial.
According to figures presented by the Hungarian government, the state had paid about 760 billion forints to MKIF between September 2022 and the end of 2025.
The government argues that continuing the contract would require much larger payments over the remaining decades.
Prime Minister Magyar said that if the agreement remained in force through 2057, the owners of MKIF could receive approximately 3.633 trillion forints in net profit, based on the government’s calculations.
That figure is a government estimate, not an independently established forecast.
It should therefore be treated as part of the administration’s argument for terminating the contract rather than as a guaranteed future payment.
Who Owns MKIF?
The ownership structure has become politically significant because MKIF is associated with two prominent Hungarian businessmen: Lőrinc Mészáros and László Szíjj.
Reuters reported that the two businessmen’s business empires expanded significantly during the Orbán era.
The new government has made the motorway concession part of a broader effort to reassess economic and funding arrangements established during Orbán’s long tenure.
The ownership issue, however, should be separated from the legal question.
The government’s challenge concerns the structure, procurement, risk allocation and subsequent modifications of the concession contract.
The fact that the owners are politically prominent does not by itself establish that the contract was unlawful.
There Is Another Problem: Hungary Cannot Simply Take the Highways Back Tomorrow
Perhaps the biggest practical obstacle is that the state no longer has all of the operational capacity it had before the concession.
When MKIF took over the network in 2022, nearly 900 employees of Magyar Közút, the state road operator, moved to the concession operator.
MKIF also purchased motorway engineering bases, vehicles, equipment and related assets from the state.
The Hungarian government therefore acknowledges that it cannot simply terminate the agreement one day and expect Magyar Közút to take over the entire network the next morning.
Transport Minister Vitézy said the government wants an orderly transition.
That could require transferring equipment, personnel, operational responsibilities and ongoing projects back to the state.
The M1 Expansion Is One of the Major Projects at Stake
The concession is not simply about maintaining existing roads.
MKIF has also been responsible for major development projects.
One of the most important is the expansion of the M1 motorway, a critical route connecting Budapest with western Hungary and Austria.
The government has said that ongoing motorway development must continue even if the concession is dismantled.
That means the dispute cannot be allowed to paralyze construction and maintenance.
The state would need to establish who takes responsibility for the projects and how they are financed during any transition.
The Exit Could Become a Billion-Dollar Legal Battle
Ending the contract could ultimately be more complicated than signing the original agreement.
If Hungary attempts to terminate the concession without agreement from MKIF, the company could challenge the decision.
That could lead to domestic litigation, contractual disputes or international arbitration depending on the provisions of the concession agreement and applicable investment protections.
Reuters reported that the concession holder rejected the government’s criticism and that the possibility of legal proceedings creates uncertainty around how an eventual exit would be implemented.
For the Hungarian government, this creates a difficult calculation:
The state wants to stop what it considers an unfavorable long-term financial commitment, but terminating the agreement could itself generate substantial liabilities.
The Contract Has Already Faced Questions Over Its Financing
The controversy also has a history that predates the current government.
Hungarian investigative outlet Telex reported that the concession faced financing difficulties after it was awarded, with banks initially reluctant to provide funding because of uncertainty surrounding the European Commission’s infringement procedure.
According to documents discussed by Telex, the previous government considered the possibility of ending the concession but ultimately took steps that helped MKIF secure financing.
Telex reported that a 2024 declaration by then-government official Antal Rogán removed a potential termination obstacle, after which banks including OTP, MBH Bank and the state-owned Hungarian Development Bank provided financing.
These are reported details concerning internal government decisions and should be distinguished from the separate question of whether the concession itself was unlawful.
The European Commission’s Case Makes the Dispute More Complicated
The EU’s involvement is important because it means the dispute isn’t simply between Budapest and a private company.
The Commission’s infringement procedure concerns Hungary’s compliance with EU procurement and concession law.
In its 2025 formal notice, the Commission said it believed the motorway contract:
- may not have transferred enough operating risk to the concessionaire;
- may have been misclassified as a concession;
- was modified in ways that may breach procurement rules; and
- may have a duration exceeding what EU concession rules permit.
Hungary was given an opportunity to respond and address the Commission’s concerns.
The EU process therefore provides an independent legal context for some of the government’s objections, although it does not itself determine the final outcome of the Hungarian government’s attempted termination.
MKIF Is Waiting for the Formal Notice
For now, MKIF’s public response has been restrained.
The company said on Sept. 18 that it had followed the government’s announcement and was waiting for an official written notification.
Only after receiving that document will MKIF formulate its substantive position and communicate it publicly.
That means the most consequential phase of the dispute may still be ahead.
The government’s announcement establishes its intention.
The next stage will determine how that intention translates into an actual legal termination.
What Happens to the Motorways If the Deal Ends?
The government wants the state to regain control of the network.
But the transition would have to be carefully managed.
The affected highways cannot simply stop operating while ownership and contractual questions are being settled.
Road maintenance, winter services, emergency response, tolling arrangements, construction and traffic management must continue.
The government has indicated that Magyar Közút could eventually resume responsibilities, but the infrastructure and personnel transfer means the process would take time.
That is why negotiations with MKIF could become critical even if Budapest ultimately intends to terminate the concession.
The Bigger Issue Is How Governments Structure Infrastructure Deals
The Hungarian dispute highlights a broader question facing governments around the world:
How much infrastructure should governments hand to private operators, and how should financial risk be divided when contracts last for decades?
Long concessions can give private companies the certainty needed to invest billions in infrastructure.
But governments can become locked into long-term payment obligations.
If traffic, interest rates, construction costs or economic conditions change dramatically, a contract that looked attractive at signing can become much more controversial years later.
That is precisely the argument now being made in Hungary.
A Contract That Was Supposed to Last Until 2057 Is Already Under Threat
The original agreement was designed to run for 35 years.
It was supposed to provide Hungary with a long-term framework for maintaining and expanding a substantial portion of the country’s motorway network.
Four years later, a new government is preparing to dismantle it.
The financial number is enormous: approximately 23.196 trillion forints, or $73.3 billion, over the life of the contract.
But the immediate question is not whether that entire amount will be paid.
It is whether Hungary can legally and financially escape the agreement without creating a new liability in the process.
MKIF says it will respond after receiving the government’s formal notification.
The European Commission is already examining the original arrangement under EU procurement rules.
And the Hungarian state must still find a way to keep more than a thousand kilometers of major roads operating during any transition.
The 35-year motorway deal was built to survive successive Hungarian governments. Now, just four years into the agreement, the new administration is preparing to test whether it can survive its first major political reversal.
