Serbia’s President Vucic Warns EU that Failure to Fund 50% of Strategic Rail Project Will Lead to China as Lead Contractor

On October 6, Serbian President Aleksandar Vucic claimed that, if the EU is unable to provide a grant covering 50% of the construction costs of the Belgrade-Nis high-speed railway modernization project, Belgrade would have no choice but to turn to China Road and Bridge Corporation as the project’s primary contractor.  Vucic indicated that the state-owned Chinese company had made a sizeable offer for the project.

Vucic has reportedly received assurances from the Chinese Ambassador to Serbia that, were a Chinese contractor to be selected, he would see to it that financing from the Export-Import Bank of China be expedited.  The development cost of the Belgrade-Nis railway project is estimated at $2.3 billion.  Earlier this year, Belgrade indicated that talks were ongoing for the railway modernization project with China Railway International, China Communications Construction Company and Russian Railways, and, on October 7, Vucic announced that China Road and Bridge Corporation (CRBC) has submitted a formal offer for construction of the project. 

Whereas the Belgrade-Nis railway project is characterized locally as a means to develop Serbia’s rural south, the southern railway route also has strategic implications that align with Belt and Road objectives in the region, namely establishing rail connectivity between the Serbian capital and the Greek port cities of Piraeus and Thessaloniki, where Chinese interests are already entrenched. Chinese shipping companies presently operate Piraeus port and maintain equity in Thessaloniki indirectly.