How Is the Ministry’s Seaport Burning Through Billions?

The port project in Trieste is being overseen not by the transport or economic ministry, but by the Ministry of Foreign Affairs and Trade (KKM). Since then, the state-run structure has produced three loss-making companies, operating costs worth billions of forints, and an investment project that keeps slipping year after year.

Author: Dr. Georges Suha

In 2019, the Hungarian state decided that the Ministry of Foreign Affairs and Trade, known in Hungarian as the Külgazdasági és Külügyminisztérium (KKM), would be the ministry responsible for managing a port project in Italy. Not the transport ministry, not the economic ministry, but the foreign ministry. The decision reflected an unusual institutional logic from the outset. A ministry primarily concerned with diplomacy and foreign relations was tasked with the ownership and operation of what is, at least on paper, a commercial seaport.

This led to the creation of Adria Port Zrt., a privately held company limited by shares, owned by the KKM. But the structure did not stop there. The company operating under the supervision of the foreign ministry acquired an Italian company and later established another Italian subsidiary as well. As a result, a total of three state-backed companies now operate around the project under the oversight of the foreign ministry. All three are loss-making. All three are ultimately financed by Hungarian taxpayers.

Three companies, zero revenue

The company owned by the foreign ministry has generated no meaningful revenue since its establishment, while its accumulated losses have already exceeded 2 billion forints. The company, which employs 12 staff and maintains a supervisory board, was effectively created to operate a port that has not yet been built.

The short history of the project is revealing in itself. Since its launch, the Hungarian state has purchased a site in Trieste for 31 million euros and then paid a further 25 million euros for the concession rights. This amounted to an initial outlay of roughly 20 billion forints. On top of that come the annual operating costs, which have run into hundreds of millions of forints each year. Last year, the annual wage bill for employees was 458,000 euros, management compensation amounted to 72,000 euros, and supervisory board fees came to 20,000 euros. These three items alone added up to approximately 200 to 220 million forints.

Two Italian subsidiaries, parallel losses

The structure managing the port project does not consist of just one loss-making company. The KKM’s port company also operates two additional Italian firms using Hungarian public money.

The first is Aquila S.r.l., an Italian limited liability company, which was acquired by Adria Port Zrt. in December 2020. This company holds the port concession rights, and its operations are also loss-making. In 2022, it produced a loss of 138,000 euros, or roughly 55 million forints.

The second is APH Invest S.r.l., also an Italian limited liability company, which was established in 2023 with registration in Milan, with the involvement of the representation led by Jenő Csiszár, the journalist-turned-consul general. This company is also operating at a loss. In 2024, it posted a deficit of 31,000 euros while generating zero revenue.

Since May this year, Aquila has been headed by the Danish specialist Jens Peder Nielsen, who was recruited away from DFDS, formally Det Forenede Dampskibs-Selskab, the Danish shipping company, where he had managed a terminal in Trieste for seven years. The local expertise may be there, but so far it has produced only one clear result: the port still does not exist, while two Italian companies are now generating losses in parallel around the project.

Contaminated land, rising costs

One of the most serious problems surrounding the project is the site itself. The selected area previously operated as an oil refinery and is therefore heavily contaminated. Full environmental remediation would be extremely expensive, so the plan appears to be to cover part of the site, essentially sealing it under concrete. That does not change the fact that the contamination would remain underground, and Italy’s notoriously strict environmental authorities are unlikely to have nothing to say about such a solution.

The costs of remediation and infrastructure development have risen sharply since the project began. The total estimated cost of the investment has now climbed to between 180 and 200 million euros, or roughly 72 to 80 billion forints. It is true that the Italian state is financing the construction of the quay wall, but that does not alter the basic fact that Hungarian taxpayers are still being asked to finance tens of billions of forints for a project overseen by the foreign ministry.

Slipping deadlines, questionable usefulness

The original completion deadline was 2022. That was later revised to 2024. Then to 2028. The currently planned completion date is 2030. The repeated delays raise serious questions on their own, but equally troubling is whether the port’s expected function can justify the level of spending.

Under the current plans, the facility will not be suitable for handling bulk goods such as grain, coal, or ore, nor will it be able to receive large container ships. For maritime logistics specialists, it is already clear that the KKM’s port is likely to be more expensive and slower than the region’s already well-established ports, especially Koper and Rijeka. That is assuming it is completed at all.

A politically supervised, economically questionable project

Perhaps the central contradiction of the project is that while it is treated politically and at the state level as a strategic investment, it is difficult to see how it could ever produce a market-based return. Based on the project’s trajectory so far, it appears almost certain that the investment will never pay for itself in business terms.

The story of the Trieste port is therefore not simply the story of a delayed state investment. It is also an example of how a diplomatic ministry can become an industrial and logistics actor, operate three state-backed loss-making companies, and continue to devote public money year after year to a project whose economic rationale appears increasingly uncertain.

Cover photo credit: Gemini

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