Hungary's 1996 World Expo May Be a No-Go

HUNGARY'S preparations for the 1996 World Expo are in trouble. Underfunded and behind schedule, Budapest real estate experts say it will be impossible to complete in time for the scheduled opening.

With less than 31 months before the first visitors arrive, the riverfront fairground in South Buda is still a vast tract of bulldozed earth. Contractors were chosen only last month for the installation of basic infrastructure like electricity, sewer, and water mains. Expo planners have quietly cut several permanent buildings from their plans, and sources say detailed design plans for important Expo structures have yet to be completed.

``In my mind the project should be in the ground already,'' says Howard Barnes of Colliers International (Hungary). ``Somebody has to see that it can't happen in the time remaining.''

``I think it's highly unlikely it will be completed at all,'' says Stuart Durrant of DTZ, an international real estate firm. ``If the government wants Expo to go ahead they'll have to find financing for it out of the state budget, and that will result in deprivations elsewhere.''

OFFICIAL estimates place the total cost at nearly $1 billion. The government's contribution is limited to less than one-third of that amount by current Expo legislation. Real estate property sales in and adjacent to the fairgrounds were supposed to provide another $110 million, but sales have been disappointing, partly because the plots are located too far away from downtown to attract tenants.

``The sad fact is there's no other source of capital than the government,'' says Alan Vincent, real estate consultant with Richard Ellis GmbH in Vienna. The only other options are to scale back plans, or give them up altogether.

Expo's fate depends largely on the results of general elections next spring. Delays have been exacerbated by political wrangling between opposition politicians in Budapest city government and ruling Hungarian Democratic Forum (MDF) officials in the Expo office. If the MDF loses the election, as polls suggest, a new government could pull the plug. Expo officials, who maintain that everything is on schedule, have been unavailable for further comment.