The Hungarian Minister of Finance, Varga Mihály, has announced on April 24 that it has signed a loan contract with China’s EximBank for the construction of the Budapest-Belgrade railway line.
“The terms of the agreement are profitable and safe for Hungary, the credit is fixed, and it can be paid in advance. The construction works can begin,” Minister of Finance said, without providing additional details.
The minister said that for the implementation of the project, 85 per cent of the costs will be financed from the credit, while the remaining 15 per cent will be provided by the Hungarian State from own resources.
Last year, the Minister has submitted a credit request to the China Exim Bank for the construction of the railway connection on the Hungarian territory. According to the announcement made in 2019, following the contract signing, the project can enter the planning and planning permission phase. It is expected that the project will be completed in 2025. To meet this deadline, the government would simplify the necessary procedures and will enable the competent authorities to issue the required licences and permissions within the framework of expedited procedures.
In Hungary, the project needs EUR 1.65 billion and includes the modernisation of the 150-km line on country’s territory, from Soroksár to Kelebia, at the border with Serbia. The contract for modernisation works on this line was signed in 2019 with a Chinese-Hungarian consortium, the CRE consortium, comprising RM International Zrt (owned by Opus), China Tiejiuju Engineering & Construction Kft and China Railway Electrification Engineering Group Kft. The contract should enter into force following the signing the credit contract.
In 2019, during the China–CEEC Summit, the Hungarian Prime Minister, Viktor Orbán, announced that the Budapest-Belgrade railway line will be implemented with Chinese financial and technical contributions.
The line is considered an important logistics corridor from Hungary to Piraeus Port, via Serbia, and it will offer the fastest transport route between China and Europe’s Western region. The project will connect Hungarian region to one of the most significant routes of world trade as part of the Belt and Road Initiative. “With the development of the railway line, Hungary can become one of the logistics center of Europe,”Varga Mihály said.
Belgrade-Budapest railway line will have a total length of 370 km and it is estimated at EUR 3 billion. It includes the modernisation of existing sections and the construction of new missing rail section to provide direct connection between the two capitals. Of the total length of the railway, around 335 km will need conversion and electrification works, while 166 km of railways will be upgraded in Hungary.