What will happen to the long-awaited Budapest-Belgrade Chinese rail project?
Hungary wants to classify all data included in contracts for the $2.1 billion, taxpayer-funded Budapest-Belgrade rail project for ten years, according to draft legislation, to ensure a loan deal is signed “as soon as possible”, reports The New York Times.
The bill, dated March 31 and submitted by Deputy Prime Minister Zsolt Semjén to parliament, argues that its aim is to help secure a loan from the Chinese Export-Import Bank to finance the project. The bill declares the project to have an “overriding public interest” and exempts it from several rules that regulate construction. Some 85% of the financing is going to come from China as a loan while 15% is provided by Hungary. Hungary has already applied for the Chinese loan.
The 150-km (93-mile) Hungarian stretch of the railway will be built by CRE Consortium, which includes holding company Opus Global, controlled by Lorinc Meszaros, an associate of Prime Minister Viktor Orban. The other half of the winning consortium is owned by China Tiejiuju Engineering & Construction Kft. and China Railway Electrification Engineering Group Kft., representing the Chinese state railways company.
Read alsoHungary, China to speed up loan talks for Budapest-Belgrade rail line upgrade
The project has suffered significant delays. China, Serbia, and Hungary signed a memorandum of understanding on the 370-km (230-mile) rail route in December 2014 in Belgrade, and the project was expected to be finished by 2017. Construction in Serbia started in late 2017 after Serbia borrowed $297.6 million from China’s Exim Bank.
The project, part of Beijing’s One Belt, One Road initiative intended to open new foreign trade links for Chinese firms, has been stalled for years. A key piece of data in the loan agreement is what interest rate Hungary will pay. Observers suggest that negotiations about the loan have been dragged out because of disagreements on the exact terms.
“This bill is essential to ensure that the loan agreement is signed as soon as possible,” the government argues in the legislation.
According to a statement by Opus in 2019, the holding company could earn revenues worth about 295 billion forints ($1 billion) from the project over the planned five-year construction period.
Read alsoHungary’s foreign minister holds talks on Budapest-Belgrade rail line upgrade
Source: New York TImes
3 Comments
Any nation borrowing money from China, or allowing Chinese companies to build anything, is playing with fire. Just take a good hard look at some Pacific island nations, or some of the African nations who did the same thing Hungary and Serbia want to do. Some of those nations are in debt (to the Chinese) to their eyeballs, and now China owns the projects it built. A good lesson in how to get a foothold in another country without putting military boots on the ground.
Wouldn’t borrowing that money from the European Bank or the World Bank be a better/safer option?
A project like this should be used to employ the underemployed LOCAL (especially Serbian) construction workers. The Chinese almost always insist on using ONLY their own workers.
The fact that Orban wants this classified for 10 years tells you all you need to know. Once again his associates will be lining their pockets at the expense of the Hungarian people. Orban, wouldn’t dare try and finance this via Europe as the Orban government haven’t tendered this correctly as per European law. The whole thing stinks…
The bias of such articles & comments can be found in the adjectives used & the absence of any alternative perspectives. Such one sided or slanted journalism smacks of what in the 50’s & 60’s was called “yellow” journalism. And is another reason why MSM is not trusted & often ignored.