Serbia May Use $230 Million of Russian Rail Loan This Year

Serbia May Use $230 Million of Russian Rail Loan This Year : Serbia’s state rail company plans to use more than a quarter of a $800 million Russian infrastructure loan this year as it rebuilds tracks and renews rolling stock in its first major upgrade in decades.

Reconstruction of three sections along the Balkan nation’s main north-south route, an upgrade of rail link between Belgrade and the industrial city of Pancevo and purchase of 27 diesel trains from Russia’s Metrovagonmash OAO, are projects worth a combined $230 million that Belgrade-based Zeleznice Srbije will start implementing in 2013, Chief Executive Officer Dragoljub Simonovic said after signing a contract with OAO Russian Railways, or RZD, in Belgrade yesterday.

“These are the priorities out of the five projects agreed” that include a 250 million-euro ($323 million) repair of tracks between Belgrade and neighboring Montenegro and a 300 million-euro upgrade of Novi Sad-Stara Pazova railroad in northern Serbia, Simonovic said.

The infrastructure loan is part of a $1 billion Russian support to Serbia agreed to in 2009. It comes with 4.1 percent interest rate and the tranches will be drawn through 2017, each with a four-year grace period and repayment over 10 years.

Russian companies, including units of Russian Railways, will serve as contractors while Serb companies will work as subcontractors.

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Source : Bloomberg

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