Additional RSD5bn borrowing highlights the rising cost and shifting deadlines of a flagship road project in eastern Serbia
Serbia plans to borrow another RSD5bn (€42.3mn) to finance the Danube Corridor, adding to the public cost of an expressway whose completion has been postponed several times since construction began in 2021.
The government has submitted legislation to parliament approving a long-term investment loan from Banca Intesa for the Požarevac-Golubac road. The agreement was signed on July 24 and would be repaid over 10 years, including a three-year grace period.
Interest will be charged at the three-month Belibor rate plus 2.4 percentage points, while the bank will receive an arrangement fee of 0.3 per cent. The variable rate leaves the state exposed to changes in Serbian money-market rates during the repayment period.
The new borrowing follows an earlier RSD16bn loan, worth about €136mn when it was arranged, as well as substantial allocations from the national budget. Serbia’s infrastructure ministry says the project is being financed through a combination of budget resources and loans from domestic banks.
The 68km expressway is intended to connect Golubac and Veliko Gradište with Požarevac and the E75 motorway between Belgrade and Niš. It is designed for speeds of up to 100km an hour and includes dozens of bridges, interchanges and roundabouts.
The road is one of the government’s principal infrastructure investments in eastern Serbia, a region that has historically suffered from weaker transport links, population decline and lower investment than Belgrade and the country’s northern industrial centres. Officials say the corridor will support tourism around the Danube and Đerdap Gorge, improve access to agricultural and industrial markets and reduce the journey from Belgrade to Golubac to about one hour and 15 minutes.
However, its changing price and timetable have become emblematic of concerns surrounding Serbia’s large transport projects.
The government signed a €337mn design-and-build contract with China’s Shandong Hi-Speed Group in August 2021, without an open tender, using Serbia’s interstate infrastructure agreement with China. The infrastructure ministry now gives an estimated total investment value of €524mn—about 55 per cent above the original commercial contract—although the two figures may not cover precisely the same expenditure and the government has not published a detailed reconciliation. Serbian infrastructure ministry
The initial political commitment was to complete the corridor by November 2024. That target moved first to 2025 and then to 2026. In June 2024, the government described September 2025 as a completion date that would be 15 months ahead of the contractual deadline. By the end of 2025, officials were instead promising that the remaining work would be finished during 2026. Government of Serbia
About 31.8km of the road was opened in February 2025, including sections around Požarevac and between Veliko Gradište and Golubac. The ministry subsequently reported that physical completion had reached roughly 82 per cent, with construction continuing on the remaining central section and associated structures.
Delays do not by themselves prove financial mismanagement. Road projects frequently encounter land acquisition problems, utility relocation, design changes and rising material costs. Serbia has also experienced a sharp increase in construction prices since the contract was signed.
The greater concern is transparency. Repeated borrowing makes it difficult to determine the project’s complete cost, particularly when the original contract, subsequent amendments, budget transfers and financing expenses are not presented together. Interest payments will push the eventual fiscal burden above the published construction estimate.
Direct contracting also weakens the government’s ability to demonstrate that it obtained the best available price. The Chinese contractor transferred work worth about €163mn to a consortium of Serbian subcontractors, according to documents reported by investigative outlet Insajder. Those contracts were likewise awarded outside the standard public-procurement system. Insajder
For Serbia, the economic case for completing the corridor remains credible. Faster access could strengthen tourism and business activity along the Danube, while unfinished sections deliver only part of the expected network benefit.
But the latest loan illustrates the trade-off behind the country’s infrastructure drive. Serbia is obtaining modern roads more quickly than its conventional procurement and budget processes might allow, yet it is doing so through opaque contracts, variable-rate domestic debt and deadlines that repeatedly move.
The road’s ultimate value will therefore depend not only on whether it reaches Golubac in 2026, but on whether the economic gains justify a final bill that has already moved far beyond the figure announced when construction began.
