OMRI DAILY DIGEST
No. 164, 23 August 1996

HUNGARY BUYS TANKS FROM BELARUS. The Hungarian Defense Ministry on 22
August revealed the terms of a previously announced deal to purchase 100
T-72 tanks from Belarus, Napi Gzdasag reported. Hungary has agreed to
pay $130,000 each for the tanks, which are to be shipped from Belarus
later this year. Belarus would have had to destroy the tanks to meet its
commitments under the Conventional Forces in Europe (CFE) treaty. In a
related matter, the Hungarian Defense and Finance ministries were
reported to have agreed on a governmental guarantee for a 30 billion
forint tender to purchase new air defense missiles and radars. The
tender is expected to be issued in two weeks. -- Doug Clarke

HUNGARIAN GOVERNMENT POSTPONES ENERGY-PRICE INCREASE. The government on
22 August announced that it will not raise energy prices until 1 January
1997, despite its earlier pledge to foreign investors to do so,
Hungarian dailies reported. The decision comes in the wake of months-
long debate within the cabinet and between government members and
foreign investors over whether a price increase is justified. Socialist
members of the government cited "social" reasons for putting off the
rise, and Industry and Trade Minister Imre Dunai's resignation last week
is thought to be owed to his firm stand in favor of raising the prices.
The price hike would have been the second major increase this year. --
Zsofia Szilagyi

HUNGARY TO SELL HOTEL CHAIN. The State Privatization and Holding Co.
(APV) on 22 August announced that it has approved Danubius Hotels' 8.1
billion forint ($52 million) bid for the 14-member HungarHotels chain,
Hungarian media reported. Danubius's main rival was a domestic
investment consortium that included HungarHotels' management. The
consortium bid 6.6 billion forints. Danubius, the shares of which are
held by both foreign and domestic investors, pledged to spend $13
million on development over the next three years and to keep the present
work force for at least a year. The privatization of HungarHotels has
been marked by controversy. Prime Minister Gyula Horn called off an
agreement between APV's predecessor and the American General Hospitality
(AGH) chain in 1994, saying it would have caused a serious loss to the
country. AGH had offered 5.6 billion forints ($36.8 million at the
current exchange rate) for a 51 percent stake in the entire chain, which
then also included the Forum, one of Budapest's most luxurious hotels.
In March, APV separated the Forum from the chain; it is now being
offered for sale individually. -- Zsofia Szilagyi

[As of 12:00 CET]

Compiled by Tim Rostan