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Mészáros firm among winners of massive rail contract

The Hungarian-Chinese consortium that won the tender to upgrade the Hungarian section of the railway line between Budapest and Belgrade includes RM International Zrt., a company controlled by the billionaire investor Lőrinc Mészáros, a key ally of Prime Minister Viktor Orbán, according to news portal index.hu.

Mészáros (center) is a key Orbán ally, with a net worth of around USD 1 billion, making him the 2,057th richest person on the globe, according to Forbes.

A consortium of RM International Zrt., China Tiejiuju Engineering & Construction Kft. and China Railway Electrification Engineering Group Kft. will be responsible for completing the project. Minister of Foreign Affairs and Trade Péter Szijjártó did not name the owners of the companies that won the contract during his announcement in Beijing, noted index.hu.

Fidesz communications director Balázs Hídvégi told commercial TV channel RTL Klub that the decision was made based on professional considerations and commitment to the investment, and not based on ownership.

The 160-kilometer line is to be upgraded to a high-speed link at a cost of HUF 750 billion, making it the largest railway project in Hungary so far.

The Ministry for Innovation and Technology said that a total of 32 companies showed interest in the project, but only two submitted applications. It said that RM International was selected on the grounds of better value for money. The main profile of the newly formed company is railway construction; it is owned by Mészáros & Mészáros Kft. and R-KORD Kft. (both controlled by the Mészáros family through Mészáros Építő Holding Zrt.). Among those entitled to represent RM International are Mészáros’s oldest daughter Beatrix, index.hu reported.

As the Budapest Business Journal reported last week, the contract will be signed on May 25. The final details of the financing contract for the upgrade between Exim Bank of China and the Hungarian government are expected to be hammered out by the middle of summer, according to Szijjártó. Construction could start early in 2020 and be completed within five years, he noted.

Meanwhile, state news wire MTI reported Monday that Minister for Innovation and Technology László Palkovics discussed the upgrade of the rail line with a senior official of Chinaʼs National Development and Reform Commission (NDRC) in Beijing last Friday. Exim Bank of China will sign the financing contract for the project by the middle of July, Palkovics told the news agency by phone.

The upgrades of the northern and southern stretches of the rail line will be managed as two separate projects, although the same conditions will apply to both, Palkovics noted.

China is financing 85% of the cost of upgrading the line, which will become part of a corridor for delivery of Chinese goods to Europe from the Port of Piraeus in Greece.