Aug. 21 (Bloomberg) -- Serbia’s first railroad project funded by an $800 million loan from Russia is to begin in the fourth quarter after years of negotiations, the state-owned rail company said.
Rebuilding a 15-kilometer (9-mile) stretch from Belgrade to Pancevo will be the first among five projects for which Russia pledged support, Zeleznice Srbije said in an e-mailed statement. The financing was initially agreed on by the two country’s presidents in 2009.
Contracts for reconstruction of six sections totaling 111 kilometers along Serbia’s main north-south route, and for purchasing Russian-made rolling stock will be signed by the end of the year, the company said, after a meeting in Belgrade with Alexander Saltanovi, Vice-President of Russian Railways, or RZD.
Under a framework agreement signed in Moscow in March, Zarubezhstroytechnology, an engineering and construction unit of RZD, will be the main contractor, while 30 percent of materials and work will be supplied by Serbian companies.
The loan will cover 85 percent of the cost of all five projects, which also include building a 68-kilometer railway between Valjevo and Loznica in western Serbia, and the overhaul of the rail link between Belgrade and Montenegro.
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