May 24 (SeeNews) - Serbian state-owned railway operator Zeleznice Srbije and its Russian peer signed a contract for works on the construction of railway infrastructure in the Balkan country and supply of diesel trains which will be financed with an $800 million (618.5 million euro) loan agreed earlier, the government in Belgrade said.
The contract, under which units of Russian Railways, RZD, and other Russian companies will act as contractors and Serbian companies as subcontractors, was signed on Thursday by Zeleznice Srbije's director general Dragoljub Simonovic and Russia's RZD International director Sergey Alekseevich Pavlov in Belgrade, the government said in a statement.
In January Serbian finance minister Mladjan Dinkic signed in Moscow an agreement on an $800 million Russian state export loan for Zeleznice Srbije meant for the upgrade of the rail sections in Serbia of pan-European transport Corridor X as well as for the modernisation of the Belgrade-Bar track.
The Serbian side will provide additional funding so the total cost of the project will stand at over $900 million.
Around $100 million of the amount will go for the acquisition of diesel trains while the remainder is meant for projects for the modernisation of Serbian railways.
The plan is to use the loan-financing to build a second track on the Belgrade-Pancevo route; six Corridor X sections; a section on Stara-Pazova-Novi Sad rail track; to modernize one part of Belgrade-Bar track and procure Russian-made diesel trains.
The contract for the Belgrade-Pancevo route will be signed by June 15, while in July an annex of the contract for the Corridor X sections will be inked. The contracts for the procurement of diesel trains will be signed in August and by the end of the year for the remaining two deals.
($=0.7732 euro)