The Hungarian Minister of Foreign Affairs and Trade Péter Szijjártó has said that a contract will be signed by May 25th for the upgrade of his country's section of the cross-border rail line between Budapest and Belgrade.
Viktor Orbán & Xi Jinping
Hungarian Prime Minister Viktor Orbán meeting with Chinese President Xi Jinping in Beijing last Thursday.
It was announced last week that the tender had been won by a Hungarian-Chinese consortium. One of the members of the consortium includes RM International Zrt., a newly formed company that specialises in railway construction and is owned by Lőrinc Mészáros, a key ally of Prime Minister Viktor Orbán.
In a TV interview with RTL Klub, the communications director of the ruling Fidesz Party, Balázs Hídvégi, said that the decision has been made based on professional background and not on ownership.
Upgrading the 160 km railway line to a high-speed connection is set to cost HUF 750-billion (€2.32 billion), which makes it Hungary's largest rail project to date.
The final details of the financing contract between the Hungarian government and the Exim Bank of China are expected to be completed over the summer, with construction then being scheduled to begin in 2020 and be completed by 2025.
Chinese investment accounts for 85% of the cost of the line's upgrade. The rail link will form part of a corridor for delivery of Chinese goods to central Europe from the Chinese-owned Greek port of Piraeus.
It has been claimed by the Hungarian government that the decision to go with Chinese investment was made in lieu of comparable European offers.
Last week Prime Minister Orbán was in Beijing for the Belt and Road Forum and had met with Chinese Premier Li Keqiang to discuss cooperation between the two countries. Mr Orbán expressed a belief that China's Belt and Road Initiative coincided with Hungary's national interests and that his country wished to participate in it without "any kind of external ideological pressure,” adding: "We Hungarians need an open global economy."
Since taking power in 2010, the Fidesz Party under Viktor Orbán has prioritised its "Eastern Opening" policy, which aims at strengthening eastward links, in particular with the emerging superpower, and in doing so has tilted Hungary's political and economic focus from Western Europe to East Asia.
$4.5 billion has been invested by Chinese companies in Hungary so far, the largest of which came in 2011 when BorsodChem was acquired by chemical company Wanhua for $1.6 billion.
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