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Transparency of municipality owned enterprises in the Visegrad countries

Although Hungarian municipally owned enterprises (MOE) are slightly more transparent than the average of our sample covering the Visegrad countries, there is still ample room for improvement in local transparency and disclosure.

With partner insitutions from the V4 countries (Oziveni/CZ, The Citizens Network Watchdog/PL, Transparency International Slovakia/SK) the BI launched a project that focused on transparency and public disclosure practices of municipally owned enterprises in the region. In our study we examined 36 local companies in Hungary, the Czech Republic, Poland and Slovakia. We elaborated a transparency ranking based on the analysis of the content of the company websites by using a set of standardized assessment criteria. We scored the disclosure practices of the local companies relying on national and international recommendations related to the availability of information on the governance structure, salaries, public procurement or property sales among others. While the average score obtained for Hungarian MOEs is 40,63% - second only to Czech MOEs (41.35%), it should be noted that it is still far below the maximum score of 100%.

The most transparent company in the Hungarian sample proved to be Fővárosi Közterület Fenntartó Zrt., the waste management company of the City of Budapest, followed closely by Miskolc Városi Közlekedési Zrt., the public transport company from Miskolc. The worst performer was Szegedi Környezetgazdálkodási Nonprofit Kft., the waste management company of Szeged. We selected our sample based on two main criteria: companies had to be 100% municipality owned enterprises and their gross revenue had to be larger than EUR 4 million. We focused on some key sectors (public transport, waste management, water supply) and included companies from the most and the least developed regions of the countries under scrutiny.

We also made several recommendations to improve MOE transparency. One was to make integrity initiatives explicit in the company’s strategy and both in its internal and external communication, as this facilitates implementation. A good practice we identified was at DP hl.m. Prahy, the public transport company of Prague, which has a dedicated anti-corruption programme with specific actions available on its website.

Project details
ClientVisegrad Fund
Project leader Petra Edina Reszkető
Duration02/10/2016 - 01/03/2017
study Visegrad initiative for transparent municipality-owned enterprises - Hungarian case study
study Visegrad Initiative for Transparent Municipality-owned Enterprises - FKF Nonprofit Zrt., Hungarian Case Study (in Hungarian)
summary Press release: MOEs in the Visegrad countries (in Hungarian)
study How to raise transparency level in the Municipal-owned Enterprises in V4 countries