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BUDAPEST, May 19 (Reuters) – Hungary’s parliament on Tuesday classified the details of the construction of a China-backed rail link between Budapest and Belgrade, a huge project that, despite growing criticism, has been restarted and enforced with additional government aid.
The project starts Beijing’s efforts to open up new foreign trade links within the European Union. She wants to ship Chinese goods from Greece to Western Europe, but important sections of the Balkans are missing.
Hungary and China signed a 20-year US $ 1.9 billion loan agreement late last month for the project at a 2.5% interest rate.
The Classification Law argued that secrecy was necessary to secure a loan from the Chinese Export-Import Bank to fund the project.
About 85% of the funding comes from China.
At the end of last week, Hungary’s government allocated 82 billion forints ($ 256 million) from its 2020 budget – already strained by a likely recession in the wake of the novel coronavirus pandemic – to fund the rail link.
The project is the second most expensive project in the country after the Russian-led expansion of the Paks nuclear power plant in central Hungary.
The 150 km (93 mile) Hungarian line of railroad is being built by the CRE consortium, which includes the holding company Opus Global, which is controlled by Lorinc Meszaros, an employee of Prime Minister Viktor Orban.
The project has suffered significant delays. China, Serbia and Hungary signed the original memorandum on the railway in 2014. Construction in Serbia started in 2018.
A Hungarian Chinese relations expert who refused to be identified told Reuters that China has political motivation to build the railroad that he believes will be pointless until it reaches the sea in Greece.
Opposition groups also said the project would never make a profit, while European politicians have raised concerns about China’s buying influence during the crisis. ($ 1 = 320.8300 forints) (Reporting by Marton Dunai; Editing by Alex Richardson)
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