“One of the largest infrastructure development projects in the Central European region is being realised via cooperation between Hungary, Serbia and China with the renovation of the Budapest-Belgrade railways line and its conversion to double tracks, thanks to which Hungary’s strategic role in the region is gaining further strength”, Minister of Foreign Affairs and Trade Péter Szijjártó said on Friday in Belgrade.

During the trilateral talks on the Budapest-Belgrade railway between China, Serbia and Hungary, the Minister told his negotiating partners that the contract between Hungarian Railways (MÁV) and the project company charged with managing the project will be concluded on November and the Hungarian-Chinese joint venture company that will be realising the project would be established before the end of September. Thanks to the refurbished railway line, Hungary will become one of the region’s most important transit countries, he added. “The project means that the fastest route in Central Europe towards those Greek ports to which the largest quantities of goods arrive from the Middle East and China will pass through Hungary”, he pointed out. “According to China’s strategy, goods from the eastern part of the country will generally be shipped to the Greek ports and then transported on to Western Europe from there”, he added.

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“According to the agreement, trains on the electrified, dual-track railway line between Budapest and Belgrade will run at 160 kilometres per hour. A total of 350 kilometres of railways line will be refurbished, with 166 kilometres on the Hungarian side”, the Minister told the press. “The costs will be higher than originally calculated in view of the fact that the Budapest stretch of the line has to be replanned because of Budapest’s bid for the Olympics”, he added. Accordingly, Hungarian expenditure on the project is now expected to be around 550 billion forints (EUR 1.8bn).

The Chinese party will draw up its financing proposal by 31 October. 85 percent of the project is to be financed by a low interest Chinese loan. The condition for the loan is that “the loan provided by the Chinese Government and China’s export import bank will offer better conditions than any development bank loan available in Europe”, he explained.

The heads of state and government of China and 16 Central and Eastern European countries will be meeting in Riga in early November to discuss the details of the financing agreement, Mr. Szijjártó said. At the trilateral talks, Serbia was represented by Minister of Construction, Transport and Infrastructure Zorana Mihajlović, while the Chinese delegation was Deputy Chairman of China’s National Development and Reform Commission (NDRC) Mr. Wang Xiaotao.