Belgrade (MTI) – Hungarian Foreign Minister Péter Szijjártó held talks with Serbian and Chinese officials on the revamp of the Budapest-Belgrade rail line in Belgrade on Friday.
Szijjártó said at the talks that Hungarian rail company MÁV and the company in charge of carrying out the project will sign a contract on the upgrade by Nov. 1. A joint Hungarian-Chinese company charged with overseeing the investment will be established by the end of September, the minister said.
With the investment, the fastest trade route between the Middle East and western Europe, and China and western Europe, will pass through Hungary, Szijjártó said. China’s strategy is to transport its goods to Greece by ship where they will be loaded onto freight trains and shipped to western Europe via rail transport, he added.
When work on the line is complete, trains of up to a speed of 160kmh will be able to roll on the upgraded tracks, Szijjártó noted.
The upgrade will cover a total of 350km of track, 166km of which are in Hungary, he said.
The cost of upgrading the Hungarian section is now estimated at 550 billion forints (EUR 1.78bn), Szijjártó said, noting that this is higher than the original estimate. The reason for the increase is that the Budapest section of the line had to be redesigned because of the city’s bid to host the 2024 Olympics, the minister said. The project was originally expected to cost 472 billion forints.
He said China would submit its financing offer for the project by Oct. 31, noting that China is financing 85 percent of the investment with a 20-year loan. Hungary’s condition for taking out the loan is that its conditions would need to be more favourable than those of any other type of bank loan available in Europe, Szijjártó said.