Talks on Budapest-Belgrade rail financing to be accelerated

Pharma

Talks between Hungaryʼs Ministry of Finance and China Exim Bank on financing of the upgrade of the Budapest-Belgrade rail line will be accelerated, Minister of Foreign Affairs and Trade Péter Szijjártó told state news wire MTI in New York.

Szijjártó said he had agreed with Chinese Foreign Minister Wang Yi on speeding up the talks on the sidelines of the United Nations General Assembly meeting on Monday.

He noted that the financing agreement needs to be reached before a contract on the implementation of the project can be signed.

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

The project has been beset by delays and escalating estimated costs. Earlier, the cost of the upgrade on the stretch of line in Hungary was expected at HUF 550 billion. However, a new tender was called late last year after the estimated costs began to spiral. As a result, the planned date for the start of construction was expected to be pushed back from 2019 to 2020.

In April this year, it was reported that the tender to upgrade the Hungarian section had been won by a Chinese-Hungarian consortium of RM International Zrt. - a company controlled by the billionaire investor Lőrinc Mészáros, a key ally of Prime Minister Viktor Orbán - together with China Tiejiuju Engineering & Construction Kft. and China Railway Electrification Engineering Group Kft. At the time, the cost of the 160-kilometer stretch of line to be upgraded to a high-speed link was put at HUF 750 billion, making it the largest railway project in Hungary so far.

Construction could start early in 2020 and be completed within five years, Szijjártó noted in April.

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