European Commission investigates Belgrade-Budapest railway

The European Union has been investigating the plan to construct a high speed railway between Belgrade and Budapest, under the umbrella of the “One Belt, One Road” initiative, whether it violates the EU’s regulation regarding public tenders – the Financial Times reports.

The European officials say that they are questioning the financial viability of the 2.89 billion USD railway project while trying to ascertain whether the project is in accordance with the EU’s regulation about large-scale transport projects which require a public tender to be launched.

“The Commission is assessing the compliance of the project with the EU law. The dialogue with the national authorities is ongoing,” said a European Commission spokeswoman.

The railway is supposed to be 350km long and would connect the capital cities of Serbia and Hungary. It is an integral part of a larger Chinese project (worth 900 billion USD), which end goal it to infrastructurally connect China with Europe, the Middle East and Africa.

At issue for the commission are separate agreements signed by the Hungarian and Serbian authorities. But the main focus is on Hungary, an EU member state that is subject to the full rigour of European procurement law. As a prospective member of the EU, Serbia is subject to looser rules. Failure to comply with EU tender laws may be punished by fines and proceedings to reverse infringements. “If push comes to shove and if it turns out that the Hungarians have awarded a public works contract of a particular dimension without tender they will of course have infringed EU legislation,” said a senior EU official.

There is no contract as such covering the construction of the Hungarian segment of the railway, but, last year, Hungary and China did agree to nominate companies on each side that would cooperate on developing the project.

 (eKapija, Financial Times 20.02.2017)

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