The Hungarian government has secured Chinese financing for a new high-speed railway between Budapest and Belgrade, Finance Minister Mihály Varga announced Friday.
Hungary has signed an “advantageous and secure” loan agreement with China for the construction of the link, Varga said. However, the Hungarian government wants to declare documents connected to the scheme — which is estimated to cost upwards of €2 billion — as a state secret for 10 years.
Varga did not unveil the full loan amount, but said Chinese financing would cover 85 percent of the project cost and have a fixed interest rate. The plan is to have the whole line running between the two capitals by 2025, he said.
A passenger journey on the route now takes eight hours, but once the line is complete, transit time would be slashed by more than half as well as boosting capacity for freight shipments.
The railway could make Hungary a “logistics center” for the region, Varga said. “We can see that despite the coronavirus China remains an important engine” for the global economy, he said.
Chinese shipping giant COSCO has already taken control of the Piraeus port in Greece, and hopes to connect to it via railways into Central Europe as part of Beijing’s sprawling One Belt, One Road trade initiative.
In 2017, the European Commission said it was looking into the details of the project but stopped short of a full investigation. Some 184 kilometers of the route will be in EU territory.