The agreement was signed by RZD general director and chairman, Mr Oleg Belozerov, and Serbian vice prime minister and minister of construction, transport and infrastructure, Mr Zorana Mikhailovich, during a visit to Belgrade by Russian prime minister, Mr Dmitry Medvedev.

A second contract signed during the meeting will also see RZD International design and build a single dispatch centre for managing rail traffic in Serbia, which is expected to take three years to construct.

RZD has modernised and rebuilt more than 200km of track in Serbia since 2014, and is currently involved in the construction of the Chortanovtsi tunnel and a viaduct over the floodplain of the Danube along the Stara Pazova - Novi Sad section of the Belgrade - Budapest line.

A $US 940m contract signed between the two parties in May 2013 included the construction and electrification of 15km of double track on the Belgrade - Pancevo line, the reconstruction of six sections totalling 112km along the Pan-European corridor, the relaying of the existing track and construction of a second track on a 40.4km section of the Stara Pazova - Novi Sad line, the reconstruction of the 77.6km Resnik - Valevo section of the Belgrade - Bar railway line, and the supply of Russian-made diesel trains.

A second contract worth €230m was signed by RZD International and Serbian Railways Infrastructure on January 17, which covers the reconstruction and track-doubling the Stara Pazova - Novi Sad section, to improve the line speed to 200km/h.