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Serbia plans billions for railways and new trains

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In the Budget Proposal for 2023, money for the railways is mainly divided into three sections – on the one hand, the state is ready to offer guarantees in the amount of a total of 173 million euros for the reconstruction of depots and tracks, as well as the procurement of new compositions, then to approve project and program loans with a total value of 2.1 billion euros for the reconstruction of the Belgrade-Niš railway and from Valjevo to the Montenegrin border, and it is ready to support the domestic railway with 180 million euros in subsidies.

In a series of articles in the coming days, will analyze the most important projects and allocations planned by the budget proposal for 2023, and we will especially cover the topics of agriculture, energy, infrastructure, as well as the policy of subsidies.

When it comes to budget investments, which are planned at 6.8 percent of the gross domestic product (GDP), Slobodan Aćimović, a professor at the Faculty of Economics in Belgrade, indicated in an interview with that it would be most useful to use a significant portion for general infrastructure, and especially for railways. Projects related to railway traffic are significantly represented in the budget, but the director of the Southeast European Railways Cluster, Dragoljub Rajić, warns that it is necessary to carefully weigh how to make these investments pay off in the long term, since we are a “railway desert island cut off from everyone” for which investments in connecting with the region and modernization is much needed.

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To begin with, the budget proposal states that in 2023, Serbia can approve project and program loans in the amount of 30.9 billion euros and 795 million dollars, of which 2.1 billion euros are “reserved” for the reconstruction of the Belgrade-Nis railway. and Valjevo – border with Montenegro (Bar railway) . 4.4 billion dinars are planned for the reconstruction of the Niš-Dimitrovgrad railway next year, and work continues on the Belgrade-Budapest railway.

The state is also ready to guarantee to the European Bank for Reconstruction and Development the borrowing of “Srbija Voz” for the reconstruction of regional depots and the company “Srbija Cargo” for the purchase of new trains worth a total of 73 million euros, as well as for another 90 million euros to the European Bank for Reconstruction and Development. to the company for the financing of railway rolling stock intended for the “modernization of the existing rolling stock”. 54.5 million euros are also planned for the purchase of five new high-speed trains.

However, in an interview with, Dragoljub Rajić warns that there is no need to rush into the purchase of new trains, and that it is better to ask what kind of tracks they will run on.

If a new, modern, sophisticated set of trains is released on an unrepaired railway, then its lifespan is reduced and maintenance costs increase , and the consequences are bad for the railway as well.” Therefore, we should wait with the procurement of new trains until the entire corridor is rebuilt, and only enter the procurement process at the end of the railway reconstruction, in order not to repeat the mistakes with the procurement of sets for the ‘Soko’ train – if we had waited, we would have received for the same money one more set,” advises Rajić.

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He drew attention to the fact that Serbia does not have enough suppliers on its territory who could maintain new sets, which makes their use more expensive.

“When Hungary made an agreement with Stadler for 43 sets identical to those procured for ‘Soko’, it made the deal conditional on the opening of a plant in that country, as well as that 40 percent of the parts and basic maintenance of the sets should be from Hungary”, recalls Rajić and notes that Serbia should have followed the same path.

He emphasizes that the presence of domestic suppliers in the railway sector is extremely important, because Serbia aspires to be a transit country, and aspires to have capacities in passenger and cargo transport.

“Therefore, apart from the acquisition of new compositions and investment in railway infrastructure, it is also of great importance to develop a domestic or regional network of suppliers , so that we can count on a more favorable price for maintenance”, said Dragoljub Rajić.

Our interlocutor also pointed out that when designing, it is necessary to take into account the lessons learned during the reconstruction and construction of the Belgrade-Novi Sad railway, because each cost quite a lot.

“First, the safety of citizens living near the railway must be ensured, as well as the owners of the sets, and we witnessed that they were targeted and that there were thefts. Also, it was seen that railroad crossings, overpasses and underpasses were not planned on time, and that the works were carried out later, which made the whole project more expensive. Now imagine the reconstruction of the railway from Belgrade to Niš, which is 250 kilometers long . That is why it is extremely important to include companies in the supervision that can guarantee that everything will be done at the European level and in accordance with European standards”, concluded Rajić, Biznis writes.

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