Suzhou, November 24 (MTI) – Hungary’s foreign minister and the chairman of China’s National Development and Reform Commission on Tuesday signed the inter-governmental agreement on the revamp of the Budapest-Belgrade rail line in Suzhou, in southern China, on the sidelines of the China-CEE summit.
Peter Szijjarto said the agreement on the investment project, 85 percent of which is to be financed by China, is the “first concrete success” of the China-Central and Eastern European Countries (CEEC) partnership. The remaining 15 percent of the investment is to be financed by Hungary.
The signing ceremony was attended by Hungarian Prime Minister Viktor Orban and his Chinese and Serbian counterparts, Li Keqiang and Aleksandar Vucic.
Szijjarto confirmed that the renovation of the 166-kilometre rail section in Hungary will cost 472 billion forints (EUR 1.5bn). When work on the line is complete, trains of up to a speed of 160kmh will be able to roll on the upgraded tracks, including 740 metre-long freight trains.
China has agreed to grant Hungary a 20-year loan with a 5-year grace period, the minister confirmed. He said the project is unique in the sense that it involves China, a European Union member state and a non-EU member state.
Szijjarto said that under the agreement China will offer Hungary favourable interest rates in order to ensure that both countries see a return on their investment as soon as possible. China and Hungary have yet to agree on an interest rate, he said. Although no deadline has been set, the two countries will have to agree on the rate soon since construction work is set to begin by the end of next year and be completed within two years, Szijjarto said.