EconomyForeign Affairs

152 Km For €1.7 Billion – New Details On China-Funded Budapest-Belgrade Rail Line Upgrade

While the China-CEE summit is taking place in Budapest, it has been announced that the deadline for requesting to participate in the two-phase tender to upgrade the Hungarian stretch of the Budapest-Belgrade rail line is January 19, 2018.

source: mno.hu

The contracting entity is Chinese- Hungarian Railway Nonprofit Ltd and the tender invitation was published on the website of Hungarian state railways MÁV. State-owned China Railway International Corporation and China Railway International Group hold a combined 85% of Chinese-Hungarian Railway Nonprofit and MÁV holds 15%.

The contract concerns activities from design, procurement, construction, to commissioning and handover of the project to the end-user or the owner. The upgrade is for a 152km railway line stretching between Soroksár, on the outskirts of Budapest, and Kelebia, on the Serbian border, with mixed traffic.

Invitations are expected to be dispatched to the candidates selected by March 19 next year. The duration of the contract is 86 months and covers construction of 374 track kilometres, 18 grade-separated and 89 level crossings, 590.4 metres of bridges and the reconstruction of about 444 kilometres of catenary wire and supply wire among others.

Upgrading the line in Hungary is expected to cost 550 billion forints (EUR 1.7bn) and could start by the end of 2020, Foreign Minister Péter Szijjártó said on Sunday. The upgrade is being 85% financed with a 20-year loan from Exim Bank of China, and Hungary is paying an annual rate of 2.5% on the 20-year loan, he said. China wants to use the rail line as part of a corridor for the export of goods to Europe.

According to the Hungarian Prime Minister, the renewed line would ensure the fastest way for Chinese goods through central Europe to the West. Speaking at the CEE-China summit in Budapest, Viktor Orbán called the project to upgrade the Budapest-Belgrade rail line with China’s involvement a “flagship” enterprise, the first major scheme implemented in cooperation between China, an EU member state, and an EU aspirant.

Chinese-Hungarian Railway was set up in the autumn of 2016 based on an intergovernmental agreement between China and Hungary on the project and its financing signed in November 2015. The European Commission (EC) previously said it was rigorously assessing the financial viability of project that is widely seen as a landmark Chinese enterprise of Beijing’s ambitious One Belt and Road trade initiative.

The Financial Times said on Monday that the EU was assessing

via hungarymatters.hu and MTI