Budapest-Belgrade Railway Line Plays a Larger Role in Supply Chain Changes
The war in Ukraine has caused a significant shift in transport routes, particularly the disappearance of the Northern Corridor, previously the fastest route for freight traffic. This has led to an increased reliance on two other routes, which has elevated the importance of the Budapest-Belgrade railway line.
According to an analysis by Oeconomus cited by Hungarian Nation, the change in transport routes has resulted in goods from China being redirected to the Central Corridor and the Maritime Silk Road. With imports entering the customs union from the Balkan Peninsula, including ports in Greece and Romania, Belgrade, Budapest, and Zagreb have become crucial hubs for trading goods between Europe and East Asia.
As a consequence of the increased Balkan trade, Hungary stands to gain significant additional revenue, despite a portion being allocated to the EU budget under EU regulations. The transformation of global supply chains has made the Budapest-Belgrade railway line increasingly valuable, and the return on investment may soon become profitable, taking into account both direct and indirect benefits.
The Belt and Road Initiative (BRI) project is expected to bring profitable returns in a few years, with the Budapest-Belgrade railway line playing a key role in facilitating the transport of goods. In addition to generating revenue from the transit of goods, the investment will contribute to the improvement of Hungary’s logistics infrastructure, making it a more attractive destination for entrepreneurs.
Oeconomus also emphasizes that Hungary’s strategic geographical location as a link between Europe and Asia presents significant potential for the transit of goods. However, challenges in the country’s logistics infrastructure need to be addressed through a long-term approach.
In particular, the development of the Budapest-Belgrade railway line is seen as a critical step in enhancing Hungary’s ability to connect Western European and Balkan markets. Construction of the V0 railway ring around the capital is deemed insufficient to improve rail system capacity, and additional developments in logistics infrastructure, including increased storage capacity, are considered necessary.
Both the Hungarian and Serbian sections of the Budapest-Belgrade railway line are expected to be completed by 2025. The total cost of the Hungarian section is estimated to be USD 2 billion, while the remaining 200-kilometer Serbian section will cost USD 1.6 billion. Upon completion, the project will significantly reduce travel time between the two capitals.
Overall, the transformation of transport routes and the increased emphasis on the Budapest-Belgrade railway line are expected to bring economic benefits to Hungary, not only in terms of revenue from the transit of goods but also through the enhancement of its logistics infrastructure and appeal to potential investors.
