MEMORANDUM OF UNDERSTANDINGON COOPERATION OF THE HUNGARIAN-SERBIAN RAILWAY PROJECT BETWEEN THE NATIONAL DEVELOPMENT AND REFORM COMMISSION OF THE PEOPLE’S REPUBLIC OF CHINA AND THE MINISTRY OF FOREIGN AFFAIRS AND TRADE OF HUNGARY AND THE MINISTRY OF CONSTRUCTION, TRANSPORT AND INFRASTRUCTURE OF THE REPUBLIC OF SERBIA("Off. Herald of RS - Treaties", No. 1/2015) |
In order to cement the friendly and cooperative relationships between the People’s Republic of China, Hungary and the Republic of Serbia,
Whereas the three countries have strong aspiration in boosting mutual economic benefits through cooperation in infrastructure,
Whereas the Hungarian-Serbian Railway Project, which links Budapest, the capital city of Hungary and Belgrade, the capital city of the Republic of Serbia (hereinafter referred as “the Hungarian-Serbian Railway Project" or “the Project"), plays an important role in enhancing logistic systems of Hungary and Serbia and enhancing economic cooperation between the three countries,
Whereas leaders of the three countries reached important consensus in November, 2013,
The National Development and Reform Commission of the People’s Republic of China (the Chinese side), the Office of the Government Commissioner for the Coordination of Hungarian-Chinese Bilateral Relations at the Ministry of Foreign Affairs and Trade of Hungary (the Hungarian Side) and the Ministry of Construction, Transport and Infrastructure of the Republic of Serbia (the Serbian Side, and the three sides also referred to as "Three Parties" hereinafter), through friendly consultations, have achieved understanding as follows:
Article 1
The Three Parties will carry out cooperation on the Hungarian-Serbian Railway Project within relevant legal framework of each country and in the principle of win-win cooperation and mutual benefits.
Article 2
The Hungarian-Serbian Railway links Budapest, the capital city of Hungary and Belgrade, the capital city of the Republic of Serbia, with a total length of about 350 kilometers (km), of which 166 km of the railway sit within the border of Hungary and 184 km of the railway sit within the border of Serbia.
Article 3
1. The Parties have the intention to expand the capacity of the Hungarian-Serbian Railway by upgrading the existing single track to dual tracks;
2. The Parties also intend to make efforts to modernize the railway by electrification and making it to be used for mixed transport for both passengers and cargo after completion of the project;
3. The Parties’ goal is that the speed of the railway is designed to be between 160-200 km/hour (the exact speed: 160, 180, 200 km/hour will be decided through Feasibility Study of the Project).
Article 4
1. Supported by the Hungarian and Serbian sides, the Chinese side will be the major party to organize Feasibility Study of the Hungarian-Serbian Railway Project and joint decisions will be made regarding the upgrade and expansion plan;
2. The Three Parties examine all possibilities to utilize Chinese railway technologies and equipment in the Hungarian-Serbian Railway, including locomotives and rolling stock, communication signaling equipment, etc;
3. All infrastructure, equipment and technologies concerning the Project shall be in compliance with the laws, regulations, standards in force in Hungary and Serbia.
Article 5
1. The Three Parties will decide the modality of cooperation through Feasibility Study of the Project, including but not limited to EPC (Engineering, Procurement and Construction) plus Finance, PPP (Public Private Partnership), BOT (Build, Operation, Transfer), etc.
2. The Model to be adopted upon the Feasibility Study completion may differ depending on the side of border to be implemented on, and could be a combination of two different Models stipulated in paragraph 1 of this Article, depending on the financial capability of Hungary and Republic of Serbia.
Article 6
The Modality of EPC plus Finance
1. The Chinese side may recommend competent Chinese company to be the general contractor for engineering, designing, procurement and construction;
2. Chinese financial agency may extend loans to finance no more than 85% of the total value of the EPC Contract;
3. The borrowing entities may be the Hungarian Government and the Serbian Government or companies designated by the Hungarian Government and the Serbian Government, in which case financial guarantees of the Hungarian Government and the Serbian Government for the project are required;
4. The concessional terms of financing will be commensurate with the proportion of Chinese element in the project.
Article 7
Feasibility Study of the Project
1. The Parties by their respective agencies seek to prepare a Feasibility Study of the Project, which will be implemented by agencies designated by the Three Parties;
2. The China Railway Corporation is designated by the Chinese side as the implementing agency, MÁV Hungarian State Railways Co. is designated by the Hungarian side and Serbian Railways JSC is designated by the Serbian Side;
3. The designated agencies of the Three Parties will draft working plan no later than 30th June, 2015, in the aim of clarifying scope of work, division of labor, proportion of cost sharing and completion time, etc. to carry out Feasibility Study in a joint manner.
Article 8
1. The Three Parties will convene the Meeting of the Joint Working Group on China-Hungary-Serbia Transport Infrastructure Cooperation on a regular basis for coordination and ensuring active progress on the Hungarian-Serbian Railway Project;
2. The designated agencies will report progress of work to the Joint Working Group on China-Hungary-Serbia Transport Infrastructure Cooperation.
Article 9
1. This Memorandum of Understanding will enter into force starting from the date of signature and remains in force until the realization of the Project. The Memorandum of Understanding will remain in force unless either Party notifies in written form the other sides its intention to terminate this Memorandum of Understanding 3 (three) months before its termination;
2. Any dispute concerning the interpretation and application of this Memorandum of Understanding will be solved through consultations;
3. This Memorandum of Understanding could be amended through agreed consensus of the Three Parties. The amendment shall be done in written manner and effective date should be clarified;
4. Termination of this Memorandum of Understanding shall not affect ongoing cooperation projects between the Parties or businesses of the three sides.
This Memorandum of Understanding is signed in Belgrade on 16th December 2014, in three originals in Chinese, Hungarian, Serbian and English languages. Texts in all languages will be equally authentic. In case of differences in interpretation, the English version shall prevail.
Mr. Xu Shaoshi
Chairman of the National Development
and Reform Commission,
The People’s Republic of China
Mr. Péter Szijjártó
Government Commissioner for the
Coordination of Hungarian-Chinese
Bilateral Relations,
Minister
The Ministry of Foreign Affairs and Trade of Hungary
Mrs. Zorana Mihajlović, Ph. D, Professor
Deputy Prime Minister and the Minister
of Construction, Transport and Infrastructure
The Republic of Serbia