The governments of China and Hungary have signed an agreement on the development, construction and financing of the Hungarian section of Hungary-Serbia high-speed railway.

Under the agreement, a consortium led by China Railway Group (CRG) has been awarded a CNY10bn ($1.57bn) contract to build the 160km Hungarian section of a railway linking Budapest with Belgrade, and will also be responsible for the general management of the project.

"The project is said to be the first concrete success of the China-Central and Eastern European Countries (CEEC) partnership."

In addition to CRG, the consortium includes CRG’s China Railway International Group (CRIG), China Railway International (CRI), a subsidiary of national operator China Railway Corporation and Hungarian State Railways.

Both CRI and CRIG will jointly hold an 85% stake in the consortium. The Chinese firms will finance 85% of the project, while the remaining 15% will come from Hungary.

Construction of a high-speed line is scheduled to start this year.

The project is said to be the first concrete success of the China-Central and Eastern European Countries (CEEC) partnership.

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The 350km Hungary-Serbia project is expected to be completed in two years.

The project is an additional two-track linking line and electrification project of the existing railway, with the designed maximum speed of 200km/h and a designed operating speed of 160km/h.

In July, Stadler Bussnang won a €125m contract from Hungarian State Railways’ passenger unit MÁV-Start to deliver 21 additional Flirt electric multiple units (EMUs).

The modern, energy-saving EMUs will be operated on Budapest’s suburban services.