Plunder without borders
How much did the "Serbian" railway built by the Chinese and Russians actually cost?
So far, each kilometer of the railway from Novi Sad to Kelebija has been paid 11.6 million, from Belgrade to Stara Pazova 13.8 million, and from Stara Pazova to Novi Sad as much as 14.9 million dollars. Even that was not enough, because the government planned to continue using that project to further extract money
Tragically, but true, Annex 5, which has been withdrawn in the meantime, although it was adopted by the Serbian Railway Infrastructure on June 12 and confirmed by the Government on July 24, as well as the sixth one that was allegedly being prepared, planned to further extract money from the project to reconstruct the railway from Novi Sad to Kelebija in the amount of almost 160 million dollars. Although, according to the available documentation, which includes the Commercial Agreement and four annexes, 1.25 billion dollars have already been spent on that section.
This information also sheds new light on the email correspondence obtained by the Inquiry Commission for the Investigation of Responsibility for the Canopy Collapse. In it, the then Deputy Prime Minister and relevant minister Zorana Mihajlović, on her own initiative, and on unknown grounds, informed the head of the Serbian President's Cabinet, Ivica Kojić, that negotiations conducted by the Railway Infrastructure, headed by the then director Miroljub Jevtić, had resulted in a reduction of 147 million euros in the cost of building the section of the railway from Novi Sad to the state border. In order to approve the proposed reduction, Kojić requested a comparative analysis of the costs of building the section from Belgrade to Stara Pazova and from Novi Sad to Kelebija.
And a comparative analysis of costs indicates numerous irregularities
This analysis, shown in Table 1, was submitted to Kojić electronically on April 17, 2018, by the former State Secretary at the Ministry of Construction, Transport and Infrastructure, Imre Kern, and it already at first glance confirms suspicions of numerous irregularities in the project to reconstruct and modernize the railway from Belgrade to Kelebija. According to this analysis, each kilometer of the first section, from the Belgrade Center station to Stara Pazova, cost 9.1 million euros, and the railway from Novi Sad to Kelebija cost 8.7 million euros, although the second section has twice as many kilometers of railway for speeds of up to 200 kilometers, and the planned works also included the reconstruction of a large number of existing or the construction of new station buildings, one viaduct and a large number of underpasses and overpasses. And also the shorter construction period, which in December 2022, President Aleksandar Vučić requested to be further shortened.
Don't let the devil down - The commercial contract for the section from Prokop to Stara Pazova was signed on November 5, 2016, based on the Preliminary Design. The terms of reference of February 20, 2015 for the preparation of the Feasibility Study and the Preliminary Design, point 4.1. defined the content of the Preliminary Design, and subpoint 5. listed the Bridge Design - bridges, viaducts, underpasses, overpasses. The terms of reference for the preparation of the design for the building permit of June 22, 2017, defined that the condition of existing bridges must be determined, possible measures for their rehabilitation must be proposed, the drainage of the railway and buildings must be resolved, hydraulic testing of culverts and bridges must be carried out, and the negative impacts of railway traffic noise on populated areas along the railway must be examined, which is why structures - noise protection walls are envisaged.
Some of the planned works omitted, but the price was not reduced
However, it turned out that CIP as a designer did not prepare the project in accordance with the Construction Permit Project, because the works on testing bridge structures, bridge rehabilitation and construction of noise protection barriers on the Hajdin Bridge were omitted at the request of the Railway Infrastructure. Namely, in the response of the Railway Infrastructure of 21 August 2017 to the oral request of the CIP regarding the clarification regarding the preparation of the Construction Permit Project relating to the section of the BG Centar - Stara Pazova railway, which was received by the Inquiry Commission, the Infrastructure takes the position that the project documentation should not include "the examination and determination of the technical condition of existing bridge structures (in use since 1970, i.e. 1980) which are in regular use under current conditions". The Infrastructure further states that the documentation that will "determine the technical condition of bridges and the possibly necessary scope of work on these bridges" will be the subject of other project documentation.
And that, of course, is not all. The inquiry commission has a document confirming that on the same day, 21 August 2017, the Serbian Railway Infrastructure, at the verbal request of the CIP, took the position that “for structural subsystems of the railway infrastructure, the design documentation must be prepared in such a way that the provisions of the Technical Specifications for Interoperability are fully and consistently applied”, with the exception that “relate to safety in railway tunnels”. Technical Specifications for Interoperability (TSI) are standardized technical documents that define the conditions that must be met by different parts of the railway system in order to be mutually compatible and interoperable at the European level. These specifications include all subsystems of the railway system, including infrastructure – tracks, stations, bridges, tunnels…
Instead of $1.1 billion, the construction of the railway from Novi Sad to Kelebija has already cost $1.25 billion, according to data from the Commercial Agreement and four annexes, and the government planned to spend another $160 million on that section.
Infrastructure, therefore, was of the opinion that the works assumed and required by the TSI, and related to safety in railway tunnels, were not foreseen and not carried out, but that in the case of the 1,921-meter-long Bežanijska Kosa railway tunnel, "on the inter-station distance Novi Beograd - Zemun, the provisions of Article 7 of Directive EU 2016/797 of the European Parliament and the Council of 11 May 2016 shall be followed", i.e. "in accordance with the provisions of Article 32 of the Railway Safety and Interoperability Act".
Since the public does not know whether this project documentation was ever completed, what we can see is what (did not) happen in practice, based on the report of the Railway Infrastructure dated March 6 this year, which lists numerous shortcomings on the section of the high-speed railway from Belgrade to Novi Sad, which trains have been operating on since March 2022, and a detailed report on the current state of the Hajdin Bridge and the Bežanijski Tunnel, from which it can be concluded that they were not the subject of work. Coincidentally or not, after the publication of this Report, the Government dismissed the then Acting Director of the Railway Infrastructure, Vladimir Maksimović.
Essentially, if the previously planned works on the Hajdin Bridge and the Bežanijski Tunnel were omitted, this would mean that the originally planned price of modernization and reconstruction of that section of the railway, 314 million euros, should have been reduced by several tens of millions, and according to some estimates by about 20 to 30 million euros. Therefore, in addition to the security issue, the question arises as to where this huge amount of money ended up.
Costs of the second section increased by 12.6 percent, and the first by as much as 38 percent
Although a comparative analysis of the initially contracted costs and works on the first and second sections, submitted to the head of Vučić's cabinet, states that the construction of the first section of the railway cost 314 million euros or 345 million dollars (at the average exchange rate for 2016), newly published documentation reveals that the costs of that section are significantly higher. According to data from the Ministry of Construction, Transport and Infrastructure from July 31 this year, the Commercial Agreement for this section was signed on November 5, 2016, and it stipulated a price of $367.4 million, which was $23 million higher.
However, it does not end there, because according to data from the Serbian Railway Infrastructure from December 2024, the construction costs of that section, with seven annexes, have increased to 474.5 million dollars, and there are also additional claims from the contractor of 769,000 dollars. In total, therefore, 475.3 million dollars. This means that each kilometer of that railway cost an average of 13.8 million dollars, which is as much as 38 percent more than stated in the comparative analysis submitted to the head of Vučić's cabinet, which states that the average price per kilometer was 9.1 million euros or 10 million dollars.
Based on the same document, it can be determined that the second section of the railway, instead of 943 million euros or 1.1 billion dollars (at the average exchange rate for 2018), has so far cost 1.25 billion dollars, including four annexes to the Commercial Agreement. This corresponds to a price of 11.6 million dollars per kilometer, which is 12.6 percent higher than that stated in the comparative analysis, according to which the price per kilometer of the second section was 8.7 million euros or 10.3 million dollars.
Although the planned works on the Hajdin Bridge and the Bežanijski Tunnel were not carried out, the cost of the reconstruction of that part of the railway was not reduced by 20 to 30 million euros, so in addition to the safety issue, the question arises as to where that huge amount of money ended up.
The comparison with the 44.44-kilometer-long section of the railway from Stara Pazova to Novi Sad, which was built by the Russians, is particularly striking. Annex 3.1 from 2016 contracted the construction of the 2.24-kilometer-long Čortanovci tunnel under Fruška Gora and the accompanying 3.3-kilometer viaduct for 337.6 million dollars, and Annex 3.2 from 2017 agreed to pay 255.6 million for the construction of the open railway from Stara Pazova to Novi Sad. In addition, according to data from Infrastructure, Annex 2 was signed in 2020 worth 58.7 million euros, which at the average exchange rate of that year corresponds to the sum of 66.9 million dollars.
In total, this section cost 660.1 million or 14.9 million dollars per kilometer, with the Russians building one tunnel and a 3.3 kilometer long viaduct on that section, while on the first part of the line from Belgrade to Stara Pazova the Chinese did not have to build a single tunnel or a viaduct longer than 1,600 meters. Therefore, for the sake of comparability, if we exclude Annex 3.1 and the cost of the tunnel and viaduct near Čortanovac, it turns out that a kilometer of line on the section from Stara Pazova to Novi Sad cost 7.3 million dollars, which is almost half the price of the first section, which the Chinese built from Prokop to Stara Pazova.
All in all, although some of the planned works were missed, the cost of building the section from Belgrade to Stara Pazova has not been reduced by a single dollar. Moreover, compared to the comparative overview, once submitted to the Chief of Staff of the President of Serbia, all costs are quite inflated and there seems to be no end in sight. The robbery of citizens continues even after the tragedy in Novi Sad. In Serbia, life also seems to have a price. What is even worse is that this price is being charged by those who are responsible for the loss of 16 human lives under the weight of the collapsed canopy and who, despite everything, announce that the first train on the new railway from Novi Sad to Subotica will depart "in about fifteen days".
CONCLUSION
The collapse of a canopy at the Novi Sad railway station, which killed 16 people a year ago, has focused the attention of the media and the public in Serbia on the quality and costs of the railway construction being carried out by Chinese and Russian companies. Following reports of poor construction and shortcomings observed on the constructed sections of the railway, the focus has now also shifted to the costs, which are continuously increasing without any justified reasons or clear explanations.
This is another example of non-transparent contracts (and annexes that are constantly being signed) when it comes to the construction of infrastructure facilities in the Western Balkans, in this case in Serbia. For a year now, the media and experts have been warning that there are justified suspicions of corrupt practices in the process of building the railway in Serbia.
The collapse of the canopy at the Novi Sad Railway Station resulted in protests that have been going on for a year across Serbia, with varying degrees of intensity, and one of the protesters' demands is to determine responsibility for the deaths of 16 people (which is often referred to in public as murder).
This example should also serve as a warning to the authorities of the Western Balkan countries to pay attention to the transparency of contracts with Chinese investors and creditors.