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Tender for Budapest-Belgrade rail upgrade published

In a two-phase tender Hungary has called for the upgrade of the Hungarian stretch of the Budapest-Belgrade railway line, the deadline for submission of tenders or requests to participate is January 19, 2018, according to a report by state news agency MTI.  

The contracting entity is Chinese-Hungarian Railway Nonprofit Ltd., according to the tender invitation, published on the website of Hungarian State Railways (MÁV) on Monday.  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 state-owned China Railway International Corporation and China Railway International Group hold a combined 85% of Chinese-Hungarian Railway, while MÁV holds 15%.

The contract will be an EPC (engineering, procurement and construction) contract, a form of contracting arrangement where the EPC contractor is made responsible for all the activities from design, procurement and construction, to commissioning and delivery of the project to the end-user or owner.

The scope of the project is to upgrade the 166-kilometer railway line stretching between Soroksár, on the southeast outskirts of Budapest, and Kelebia, on the Serbian border, to allow speeds of 160 km/h in future, with mixed traffic, according to the specification related to the existing EU TEN-T network. 

Invitations to tender or to participate are expected to be dispatched to selected candidates by March 19, 2017. 

Three bidders will be chosen for the second, final phase and the winning bid will be selected 50% based on the quality of the technical bid and 50% on the financial aspect. The duration of the contract will be 86 months.   

In addition to proof of technical and professional capability, candidates must have recorded at least HUF 7.5 billion average net sales revenues in the past five complete financial years from national railway projects and electronic signalling system railway construction works, and must also hold confirmation of creditworthiness of at least HUF 45 bln or equivalent from a bank. In addition, they must have had no more than one loss-making year in the past three financial years. 

The contract is for building approximately 374 track kilometers, 18 grade-separated and 89 level crossings, 590.4 meters of bridges and the reconstruction of about 444 kilometers of overhead lines and supply wires, among other specifications.

The cost of the upgrade in Hungary is expected at HUF 550 bln, and work could start by the end of 2020, Minister of Foreign Affairs and Trade Péter Szijjártó said on Sunday. The upgrade is being 85% financed by a 20-year loan from Exim Bank of China, with Hungary paying an annual rate of 2.5% on the 20-year loan, Szijjártó added. 

China wants to use the rail line as part of a corridor for the export of goods to Europe, the MTI report stated. The upgrade is set to cut the journey time on passenger trains from Budapest to Belgrade from the current eight hours to around two and a half hours.