Loan-hungry Hungary wants to file details of Chinese Budapest-Belgrade rail project

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BUDAPEST, Reuters.

The project, which is part of Beijing’s One Belt, One Road initiative to open new foreign trade relationships for Chinese companies, has been stalled for years.

The bill, dated March 31 and submitted by Deputy Prime Minister Zsolt Semjén to parliament, says its purpose is to help secure a loan from the China Import-Export Bank to finance the project.

A key element of the loan agreement is the interest rate Hungary will pay. Observers suggest the loan negotiations dragged on due to disagreements over the exact terms.

The bill declares the project to be “superior public interest” and exempts it from several rules that govern construction. Some 85% of the funding will come from China in the form of a loan while 15% will be provided by Hungary. Hungary has already requested the Chinese loan.

“This bill is essential to ensure that the loan contract is signed as soon as possible,” argues the government in the legislation.

The 150 km (93 mile) Hungarian section of the railway will be built by CRE Consortium which includes the 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 national railway company.

According to a statement from Opus in 2019, the holding company could generate around 295 billion forints ($ 1 billion) in revenue from the project over the planned five-year construction period.

The project suffered significant delays. China, Serbia and Hungary signed a memorandum of understanding on the 370 km (230 mile) railway line in December 2014 in Belgrade and the project was due to be completed by 2017.

Construction in Serbia began in late 2017 after Serbia borrowed $ 297.6 million from China’s Exim bank.

Reporting by Anita Komuves; edited by Nick Macfie

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