A contract with a Chinese-Hungarian consortium that has won the public tender to upgrade the railway line connecting Budapest and Belgrade will be signed by May 25, Hungary's Minister of Foreign Affairs and Trade Peter Szijjarto said in Beijing on April 25. He would not disclose the names of the winning companies nor the offer made.

The planned 350 km high-speed Chinese-funded railway connecting Budapest to Belgrade has the potential to become the main transport route for Chinese and Asian goods that arrive by sea at the Chinese-owned Greek port of Piraeus and head into Europe. The railway is considered a flagship project of China's Belt and Road Initiative.

Construction of the Hungarian section spanning 152km could start early in 2020 and be completed within five years, Hungary's top diplomat said. Details of the financing contract between Exim Bank of China and the Hungarian government are expected to be hammered out by the middle of summer, he added. 

China's Exim Bank has offered to finance 85% of the investment with a 20-year dollar loan with a planned interest rate of 2.5%. 

The Hungarian government claimed that Chinese financing is the best option in the absence of comparable European funding.

The government called for a new tender for selecting the general contractor in December due to the cost overshoot. The cost initially was put at HUF472bn (€1.5bn) but has spiralled to above HUF750bn. Including interest, the costs could run to HUF950bn, which prompted many to question the validity of the whole project economically. Previous press reports cited experts saying the investment could recoup its cost in 2,400 years.

Szijjarto, who is in Beijing on an official visit with Prime Minister Viktor Orban, said bilateral agreements had been signed on exports of poultry to China, on the establishment of a working group to promote free trade, and on cooperation in the area of digital development.

Szijjarto said it is in Hungary’s fundamental interests for world trade to be as free as possible and bilateral relations are extremely important for the Hungarian economy.

Orban meets with Li Keqiang

Prime Minister Viktor Orban met with Chinese Premier Li Keqiang ahead of the Belt and Road Forum, which begins on Friday. Orban said at the talks that China's Belt and Road Initiative coincides with Hungary's national interests and the country wants to participate in it without "any kind of external ideological pressure”. Maintaining the order of free trade and freedom of the world economy is important. "We Hungarians need an open global economy," he said.

Since taking office in 2010, the Hungarian government has made its "Eastern Opening" policy aimed at strengthening ties to the fast-growing region in the Far East a priority and shift Hungary’s economic and political focus from Western Europe to Asia and specifically to China.

Chinese companies have invested $4.5bn in Hungary so far, the bulk of which came from the $1.6bn investment by the Chinese chemical company Wanhua in 2011, when it acquired BorsodChem that year.

In Beijing Orban will also have talks with President Xi Jinping, and he will attend the two-day forum together with 36 other heads of state and government and other world figures. The forum is the most important international economic and political event of the year in China.