Hungary launches rail link tender as CEE-China summit starts

By Sandor Peto

BUDAPEST, Nov 26 (Reuters) - Hungary will publish a procurement tender on Monday for a modernised railway link with Serbian capital Belgrade to ship Chinese goods into Western Europe, Foreign Minister Peter Szijjarto said on Sunday.

The tender will be published as politicians from China and Central European countries begin a two-day summit in Budapest, with the participation of 16 prime ministers including Chinese Premier Li Keqiang.

"We, in this region, have looked at China's leading role in the new world order as an opportunity rather than a threat," Szijjarto said in a news conference at Budapest's main airport ahead of the Chinese Premier's arrival.

Hungarian Prime Minister Viktor Orban will sign 11 bilateral agreements with China at the summit. Other participating countries and about 1,000 businessmen from the region and China plan to sign dozens of deals, the minister said.

The railway link upgrade had been agreed previously and construction of the Hungarian stretch, at an estimated cost of 550 billion forints ($2.1 billion), is expected to start in late 2020, with China's Exim Bank providing 85 percent credit coverage, Szijjarto said.

The line could become the main transport route for Chinese goods that arrive by sea at the Greek port of Piraeus and head into other parts of Europe, Szijjarto said.

Deals to be signed at the summit include a $500 million credit line from the Exim Bank of China to its Hungarian counterpart to finance lending.

China increasingly uses financing to strengthen its presence in the region.

Bosnia's autonomous Serb Republic is also expected to sign a concession with the China Shandong International Economic and Technical Corporation in Budapest, the region's transport minister Nedjo Trninic said.

The deal would allow the company to charge a road toll on part of a 100 km road it plans to build and fund at an estimated cost of 320 million euros ($382 million) to connect the northwestern town of Banja Luka with the Croatian border.

It would be the first road-construction concession for China in the Balkans.

The Serb Republic railway company Zeljeznice RS is expected to sign another deal with China Shandong International Economic and Technical Corporation for the reconstruction and modernisation of a railway track alongside the planned road from Banja Luka at a cost of 241 million euros. ($1 = 261.4100 forints) ($1 = 0.8382 euros)

(Additional reporting by Daria Sito-Sucic in Sarajevo; Editing by David Goodman)

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