China, Serbia ink deal for €943m railway to Hungary

China has agreed to build a railway in Serbia, part of the long-planned Belgrade-to-Budapest railway, for €943m.

Serbia’s Prime Minister Ana Brnabic announced the agreement on 7 July during a summit held between China and 16 eastern European countries in Sofia, Bulgaria, attended by Chinese Premier Li Keqiang.

Addressing participants of the so-called "16+1" annual gathering, Brnabic said the commercial agreement with China pertains to a section of the railway linking the cities of Novi Sad and Subotica, and the village of Kelebija, which is near the border with Hungary.

Novi Sad and Subotica are approximately 95km apart.

Part of China’s ambitious Belt & Road Initiative, the planned railway between the capitals of Serbia (Belgrade) and Hungary (Budapest) was first agreed between the three countries in 2013, but the portion in Hungary, an EU member unlike Serbia, has been under review by the EU.

The railway would allow passengers to make the 350-km-long journey between the cities of Belgrade and Budapest in under two hours, a big improvement on the current rail journey time of nine hours. Latest cost estimates of the entire railway have been reported as €3.8bn.

Unconstrained by EU procurement rules, Serbia has embraced Chinese sponsorship of its section of the line, and Brnabic presided over a ceremonial launch of construction at the end of last year.

Brnabic said the modernisation of the Belgrade-Budapest railway is the first cross-border project under the 16+1 cooperation mechanism and is "crucial for infrastructure connectivity".

"That is why it is most important today for Serbia the signing of the Commercial Agreement on the modernization and reconstruction of the Hungarian-Serbian rail link in the territory of the Republic of Serbia on the section Novi Sad-Subotica-state border (Kelebija), which is worth €943 million," Brnabic said, according to a Serbian government press release.

She added that the agreement "fully covers execution of works on the project", the press release said.

Image: Chinese Premier Li Keqiang (second from left) and Serbian Prime Minister Ana Brnabic at the "16+1" summit in Sofia, 7 July 2018 (Government of Serbia)

• Edited on 14th August 2018 to change the dollar sign to the euro sign. Thank you for your comments.
  

Further Reading:

• China starts building Serbia-Hungary railway
• EU accused of "asserting power" to block Chinese railway in Hungary