Earlier, the minister talked about a 20-year loan with 5 year grace period. The exact cost of the financing will become clear after the completion of the public procurement, he added.

Szijjártó dismissed criticism questioning Hungary’s interest in the investment, arguing that an electrified rail connection to the capital of a neighbouring country suitable for trains running at 160km per hour would be beneficial for Hungary.

He also said the government wants Hungary to become the transit country for as much Chinese merchandise as possible on their way to Europe, adding that it was the state-owned rail company MÁV that had decided to classify the feasibility study for the project.

A tender for the upgrade of the Budapest-Belgrade line with a submission deadline of January 19, 2018 was called in November 2017.

The contracting entity is Chinese-Hungarian Railway Nonprofit Ltd in which state-owned China Railway International Corporation and China Railway International Group hold a combined 85 percent stake and MAV a 15 percent stake.

The cost of upgrading the line in Hungary is expected to be around 550 billion forints (EUR 1.8bn), 85 percent of which will be financed from the Chinese loan.

Republished with permission of Hungary Matters, MTI’s daily newsletter.