"Serbian Railways" and European Bank for Reconstruction and Development signed today at the Government of the Republic of Serbia, the contract by which this financial institution approves to Serbian Railways the loan of 60 million Euros, under very favorable conditions. Warranties for this loan have been given by Serbian Government.

In the signing ceremony participated the Director General of Serbian Railways, Milanko Šarančić and European Bank for Reconstruction and development Director for Serbia and Montenegro, Dragica Pilipović Sefi, while the Minister of Finance Mlađan Dinkić signed the warranties for this loan, on behalf of Republic Government.

Serbian Railways will use the resources of the loan for the provision of al least 1100 new freight wagons (58,5 million Euros) and one under floor wheel lathe (1,5 million Euros). During the negotiations, they agreed about the payment period of 11 years, with grace period of four years, so the first pay off rate will be in 2010.

Serbian Railways expect to have at least 1.100 freight car on our railways in the next year and a half to two years, - said the Director General of Serbian Railways, Milanko Šarančić.

Beside four thousand freight wagons that we have now at our disposal, Serbian Railways need about two thousand car to satisfy the increasing demands of domestic economy. Every day we have a lack of 550 to 750 freight cars for the transport of all the goods that we have as an offer from the market. Thanks to this project, beside all other activities that we carry out on the renewal and modernization of freight rolling stock, we expect to have approximately six thousand freight wagons on Serbian rails, which is the current need of our enterprise. By the provision of new freight wagons, Serbian Railway Company will be able to increase the goods transport on their railways, particularly on the international Corridor 10, - emphasized Šarančić and evaluated that this project would have positive effect on overall economic growth in Serbia.

Today is the big day for Serbian railways. The State decided to support the restructuring project of Serbian railways, since that transport mode will in future have great role on transport market, - specified the Republic Minister of Finance, Mlađan Dinkić and announced that our railways will be one of the national and economic priorities of the Government.

After the contract signed with the European Bank for Reconstruction and Development, we soon expect the signing of the contract with European Investment Bank for the loan of 80 million Euros, intended for modernization of Serbian rails, firstly on Corridor 10, and another 32,5 millions could be expected from Spanish State loan. The plan is to have The Warranties Law adopted by Republic Assembly in September, so the railways could expect a part of these resources during 2006, - said the Republic Minister of Finance, Mlađan Dinkić and continued:

By modernization of freight rolling stock and the railways, greater volume of transport will be enabled, and export orientation of domestic economy improved, specified the Minister and proclaimed the announcement of international tender for the provision of new freight wagons.

For a while, European Bank for Reconstruction and Development cooperates successfully with Serbian Railways on the project of restructuring this transport system. Freight traffic is the best segment of business on Serbian Railways, and it is on the level of other railway companies in the region. Year income form freight transport has been increased in the last period from 57 to 75 million Euros. That is why the bank decided to help the provision of freight cars, and we expect Serbian Railways to achieve even better results, improve the business and continue with restructuring, as we also expect the increasing of trade and cooperation in this region, - said Dragica Pilipović Sefi, European Bank for Reconstruction and Development Director for Serbia and Montenegro.

According to her words, European Agency for reconstruction will provide 1,3 million Euros to help implement the overall project, and Government of France another 300.000 Euros to assist the implementation of the restructuring component of this project.

European Bank for Reconstruction and Development, during 2001, together with European Investment Bank, helped Serbian Railways refurbish electric locomotives, buy new track equipment and initiate a sector restructuring program.