Press "Enter" to skip to content

Will the $4bn Belgrade-Budapest rail update be a benefit or burden?

In the tired, rural channel of Szbadaszallas, 80 km southwest of the capital, half a dozen passengers alight in the 07.57 railway from Budapest Keleti.

The rail is clean but instead vacant, with maybe 15 percent of the chairs taken. Regardless of the electric locomotive in the front, it’s no state: passengers from Budapest to the boundary will enjoy views of the plain — the lineup is completely rural – to get almost 3 1/4 hours to the 163 km travel.

This equates to an average rate of just 56 kph, restricted primarily to the condition of the only track and frequency of wayside stops, essential mainly allowing trains to pass.

However, this 19th century, the steam-like program is set to change radically in a couple of decades.

Together with Chinese (and a few Russian) loans, both Hungary and Serbia have consented to modernize and update the various sections of their 350-km Budapest-Belgrade railroad link at a complete cost of a $4 billion, split between the 2 nations.

By installing dual-track throughout, modern signaling and an expected line rate of 160 kph on the side (200 kph at Serbia) international expresses will whizz between both capitals in four weeks — half of the prior travel time – based on the Hungarians or perhaps”less than three hours” by the Serbs.

Whatever the greatest program, it will produce rail travel more aggressive in contrast to this (legal) greatest by motorway.

However, while these headline figures make it possible for politicians to inspire voters, passenger traffic possible between the two capitals is constrained. When fully open (a part of the Serbian section is presently closed for rebuilding) just three passenger trains per day plied the whole route.

A clue to this plausible reason for the huge investment is in the intermodal cargo train sitting in Szabadszallas channel: its containers are Chinese possessed.

Budapest will develop into a”logistics hub” for the area once the job is finished, the government states.

Deficiency of transparency

The Hungarian section now sees an average of 47 cargo trains every day, which combined with courier services, imply the line reaches full capability, Kinai-Magyar Vasuti Non-profit Co, ” the joint Chinese-Hungarian company set up to oversee the job, informed Euronews.

However, it acknowledges that just a mean of seven freights now cross the border every day.

The Serbian part, before the closing of its southern finish to rebuilding in 2019, was busier, with a few 115 passengers along with 85 cargo trains every day, based on Serbia Railways Infrastructure, the firm charged with handling the rebuilding job.

However, the status of the monitor makes it slower compared to the Hungarian segment, with big segments restricted to some 40 kph maximum rate.

As it functions Subotica (inhabitants 105,000) close to the border, and Novi Sad (population 280,000), only 77 kilometers from Belgrade, those cities will benefit from enormously improved rail connections to their funds.

Serbia, which has used both Russian and Chinese loans to fund the majority of the investment, has a goal date of mid-2024 for completing the northern phase of the job.

However, while the arguments for some modernization of those lines in both nations seem sensible, neither the Budapest nor Belgrade authorities have published details of anticipated traffic levels following the undertaking, nor some hard figures available to demonstrate the company cases for all these lavish rebuilds at these enormous expenditures.

The transparency in Hungary isn’t aided by the authorities, utilizing the emergency powers granted to itself as a consequence of the coronavirus pandemic, announcing the job a state secret in April.

Hence, after answering some questions regarding the present path, the project firm failed to react to followup inquiries regarding potential traffic projections and payback situations – projections that, given companies rethinking their dependence on extended supply chains in the aftermath of this coronavirus pandemic, ought to be subject to revision.

Hungarian opposition parties have denounced the whole job, stating it’s a giant, overpriced performance designed to cream off state cash.

“Traditional cost-benefit calculations don’t work in this circumstance,” Viktor Friedmann, a China expert at Budapest Metropolitan University, informed Euronews, asserting that for both states the job is embedded in wider, geopolitical plans for influence in the area.

For Hungary, also, it functions the Orban administration’s”method of political capitalism”, which aims in channeling country money to oligarchs and companies which are officially confidential but are in reality fully determined by Orban and his Fidesz party, ” he explained.

(The Hungarian condition will cough up 15 percent of their whole outlay.) The loan carries a fixed rate of interest of 2.5 percent.

However, using the Hungarian section currently scheduled to be finished just in 2025, it will probably require at least a decade to show if the investment — or bet – is defined for a benefit or burden to prospective Hungarian taxpayers.