When it comes to the modernization of the railway in Serbia, the officials of the Government of Serbia and the relevant Ministry emphasize projects with China and Russia.
Serbia is realizing the modernization of its railways through numerous credit borrowings from these two countries. This year alone, Serbia’s projected loans from Russia, according to the budget plan for 2020, are projected at 1.73 billion euros, and that amount is increasing from year to year.
Little is known, however, that the EU in Serbia, through the non-refundable funds it provides, is involved in numerous projects on the modernization of railways. Some of the shares are exactly the ones that Serbia subsequently borrowed from China and Russia, RFE reports.
The EU is involved in financing the modernization of five key railway sections in Serbia that are part of Pan-European Corridor 10. EU investments are reflected in the preparation of project-technical documentation needed to start work and by providing grants (EU grants) for co-financing. In addition, loans from the European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD) are also available to Serbia, on favorable terms.
The European Investment Bank, as an EU bank and a non-profit organization, provides the most favorable loans to Serbia, without mandatory fees, without management fees or without any other fees, the European Union Delegation told RFE / RL.
In the modernization of the railway on the section Belgrade – border with Hungary, the EU in 2009 financed the Feasibility Study and Environmental Impact Assessment, for the subsection Stara Pazova – Novi Sad. The Serbian government contacted the EU that year with a request to fund a Feasibility Study. As a financier, the European Investment Bank was envisaged for the modernization of this subsection.
A feasibility study was prepared in 2009. However, the negotiations were not realized since Serbia informed the EIB in 2011 that Russia would give a loan for that section. Funding for the Feasibility Study, provided by the EU, was funded through a technical assistance project, and the budget allocated by the EU for the study was approximately 300,000 euros.
The total length of the section Stara Pazova – Novi Sad is 41 kilometers, and the Feasibility Study defined that the total value of the project is 368 million euros. On the same section, ie on the part of the Belgrade railway to the border with Hungary, the Government of Serbia asked the European Union to finance the preparation of project-technical documentation for the Novi Sad – Subotica subsection. Specifically, at the request of the Government of Serbia, the EU provided funding in the amount of almost 4.8 million euros for the preparation of the conceptual design, feasibility study and environmental impact assessment.
The preparation of this documentation was done in accordance with the Terms of Reference prepared and approved by the competent institutions in Serbia, in this case the Serbian Railway Infrastructure and the Ministry of Construction, Transport and Infrastructure. The documentation, based on the Terms of Reference, was prepared for the projected train speed of 160 kilometers per hour. The preparation of the documentation began in June 2013 and lasted until July 2016. However, in this case as well, the Government of Serbia subsequently decided to continue the project with credit borrowing from China.
The total length of the line from Novi Sad to Subotica is 113 kilometers, and the feasibility study and cost-benefit assessment (Cost Benefit Analyzes) showed that the value of the modernization of this railway section is 495 million euros.
On the Belgrade railway section to the border with Croatia, the EU is currently funding the preparation of a conceptual design, feasibility study and environmental impact assessment for a 120-kilometer subsection. Specifically, it is a part from Belgrade to Shida, including two subsections: Stara Pazova – Golubinci and Golubinci – Indjija. The project actually covers the entire stretch from Belgrade to the border with Croatia, and grants from EU grants have been approved in the amount of three million euros.
This project is also supported by the European Investment Bank, as the leading international financial institution. Once the documentation is fully ready, negotiations on the funding structure are expected to begin. It should be noted that this financing, in addition to EIB loans, also provides grants from EU funds.
The total cost of this investment is currently estimated at 288 million euros, but more precise information on the total cost of the project, as stated for RFE in the EU Delegation to Serbia, will be known after the completion of the Feasibility Study, N1 reports.
