Now That's Irony: Spanish Credit Crunch Scuppers Hungarian MotoGP Round
As we reported on Monday, the Hungarian round of MotoGP, due to take place on September 20th, is likely to be axed. The report, which originated with the British publication Motorcycle News, stated that construction of the brand new Balatonring track where the race was to be held was running too far behind schedule, and that as a consequence, the facility would not be ready in time to host the event. Since then, the arguments have started over who is to blame for the situation, with much finger pointing between the partners involved in the project.
The Hungarian Minister for Sport was in no doubt where the blame lay. Speaking to the Hungarian sports daily Nemzeti Sport, Istvan Gyenesei said "Our Spanish partner has not completed all of the steps set out in the agreement we have with them [..] so it looks as if the track will not be ready in time, and we will not be able to organize the Grand Prix there."
But the Spanish company involved were quick to reject any talk of the blame laying with them. Janos Bence Kovacs, president of the Grupo Milton responded to the minister's accusations "I'm surprised what the minister said. We've met all of the deadlines so far. Our tempo is fine, we're even a little bit faster than expected. We will do exactly what we have agreed to do. The project is right on schedule. We will do everything that we are expected to do." He refused to respond to the allegations published in MCN, dismissing them as "purely gossip".
As for the real state of construction, it is difficult to tell just how far along Grupo Milton has proceeded, though the photos published on the website of Sportgeza.hu do not look promising. Obviously, at this stage, construction consists mostly of preparing the site for the track and the foundations to be laid, and so photos can be deceptive.
But Grupo Milton is in a difficult position. Since the outbreak of the current economic crisis, Spanish banks have tightened up their lending considerably. Spanish construction companies have been hit particularly badly, as the banks start to demand repayment of the vast debts the companies have, which they used to finance the building boom which has fueled the Spanish economy for the past 10 years. With the bursing of the housing bubble, property prices have collapsed, leaving large sections of the Spanish construction industry either bankrupt, or teetering on the very brink.
Grupo Milton, which specializes in property in Hungary and Rumania, has been less badly hit by the collapse of Spanish property prices, but could well find itself falling victim to the reluctance of Spanish banks to lend money for construction. Ironically, the could find themselves hoping to be bailed out by the Hungarian government, in a bid to save what would be a big boost for the local economy, rather than the Spanish government.