Serbia has very little insight into how the Russian company RZD International is using two Russian loans to modernize its railways, Radio Free Europe said on Wednesday.
The Serbian government is getting a new loan of 172.5 million Euro from Russia to upgrade its railway system and to build a new dispatch center, RFE said and added that some of the things that the new loan is intended to be used for have already been covered by an earlier loan.
A number of benefits are accorded the Russian RZD International company through the loans – it is free to subcontract local companies and has no obligation to inform the Serbian Railways Infrastructure company. The companies supplying goods and services are exempt from paying VAT, customs and other duties.
The Serbian Traffic Ministry told RFE in a written reply that it could not provide an estimate for the funds or say how they would be divided by the Russian and Serbian companies. “Under the contract, the Serbian Railways Infrastructure is not required to approve the choice of subcontractor and we have no knowledge of the contractual relationship between RZD International and subcontractors,” the ministry said.
The agreement on the new Russian state export loan was signed on October 19 by Serbian Finance Minister Sinisa Mali and Russian deputy Finance Minister Yuriy Zubarov during Prime Minister Dmitriy Medvedev’s visit to Belgrade.