In April 2020, China formally agreed to provide Hungary with a loan to build a railway line from Budapest to Belgrade. The loan is for $ 1.9 billion, enough to cover 85% of the project costs. Hungary will cover the remaining 15% on its own.
Discussion of the project began 6 years ago. Three countries - China, Hungary, and Serbia - signed a protocol of intent to build a 370-kilometer-long railway network along the Budapest-Belgrade route. The investment involves the reconstruction of existing tracks and the construction of new ones. As a result, 335 kilometers of the railway will be renovated, 166 kilometers of which will pass through Hungarian territory.
The main objective of the project is the construction of a railway line from China to the Port of Piraeus in Athens. This is the third largest passenger port in the world. In autumn 2009, the Chinese company China Ocean Shipping Company (COSCO) leased half of the Port of Piraeus from Greece for 35 years. Since 2016, COSCO has held a controlling stake.
For China, the result of this project will be a “bridge” connecting the Port of Piraeus with the countries of Western Europe. China's strategy is based on a long-term perspective for the coming decades. China anticipates that the Port of Piraeus and the new railway infrastructure will continue to be managed by the PRC.
To support the Budapest-Belgrade rail constructon project, the AsstrA international group of companies is responsible for organizing the last-mile transportation of containers for the China Railway Group. The range of services provided also includes the execution of transit and customs documentation. Despite the difficult epidemiological situation caused by the spread of coronavirus, this AsstrA client is receiving containers regularly every week according to an established schedule.
“The completion of this key EU infrastructure project is scheduled for 2022. After it is built, the Budapest-Belgrade rail route should become critical for cargo flows along the route from Hungary through Serbia to the Athens’ chief seaport. In addition, the railway line will become the fastest route between the West and East. After construction, Hungary will be one Europe’s major logistics hubs,” shares Vladislav Martin, China Rail Division Specialist at AsstrA.
Chinese authorities insists that their goal is develop global infrastructure, not spread political influence. Serbia, in this sense, is a good place to do so. The construction of the line will, in the first case, make it possible to establish fast transport links with Western Europe. Secondly, the country will replenish it’s national budget by serving as a transport hub.
“The Budapest-Belgrade railway project is impressive. This is part of a new route from China to Europe using high-speed freight trains. The future of the logistics market will be driven by transformation that will help customers receive safe, fast solutions at an affordable prices,” says Botond Kovacs-Mate, AsstrA Hungary Branch Manager.