Serbia is committing nearly €1 billion to new trains, trams and metro rolling stock from suppliers in Spain, China, France and Turkey, while Siemens Mobility’s Kragujevac facilities continue manufacturing rail vehicles mainly for international customers. The combination of major public transport investments and limited domestic participation has intensified discussions around procurement transparency, state guarantees, financing structures and the absence of a coordinated industrial strategy linking transport spending with local manufacturing development.
- CAF contract becomes Serbia’s largest conventional rail purchase
- State-backed railway financing raises questions over operating capacity
- BG Voz expansion requires broader transport planning
- CRRC supplies additional electric trains for Serbian network
- Tram procurement brings further scrutiny over competition
- New tram tender increases importance of technical competition
- Alstom metro project adds another major foreign procurement
- Siemens Kragujevac facilities remain focused on exports
- Industrial strategy remains separate from transport procurement
- Siemens production plans face delays amid European competition
- Multiple suppliers create long-term maintenance obligations
CAF contract becomes Serbia’s largest conventional rail purchase
The largest recent conventional rail acquisition involves 30 electric multiple-unit trains for the BG Voz urban and suburban railway network. The contract with Spain’s Construcciones y Auxiliar de Ferrocarriles (CAF) is valued at approximately €310 million, implying an average cost of around €10.3 million per train.
The unit price alone does not capture the complete commercial structure, as total costs depend on factors including train configuration, passenger capacity, maximum speed, onboard technology, spare-parts packages, depot equipment, employee training, warranties and long-term maintenance obligations. Serbia has provided a government guarantee for financing of up to €263.87 million arranged through Deutsche Bank, with backing from Spain’s export-credit agency CESCE. The financing covers approximately 85% of the contract value.
The remaining €46.9 million, representing about 15% of the purchase price, is being financed through a long-term loan from state-controlled Bank Poštanska štedionica, also supported by a Serbian government guarantee. The structure follows a common export-credit model, where export agencies support buyer financing, suppliers receive secure contracts and purchasers gain access to longer-term funding.
The government guarantee means the ultimate repayment risk remains with Serbia. The financial assessment of the purchase therefore includes not only the train price but also interest costs, guarantee fees, foreign-exchange exposure, maintenance obligations and the operator’s ability to generate sufficient cash flow.
State-backed railway financing raises questions over operating capacity
The financial position of railway operator Srbijavoz remains a key factor in evaluating the long-term cost of the investment. The company reportedly increased its net loss from approximately €2.2 million in 2024 to around €16 million in 2025, despite receiving public subsidies of about €40 million.
Passenger railway systems often require public support because ticket revenues rarely cover all infrastructure and public-service obligations. State guarantees transform operator weaknesses into potential liabilities for public finances. The Serbian government has classified the BG Voz purchase as a strategically important investment, partly linked to transport requirements surrounding Expo 2027.
The delivery schedule, however, does not align with the exhibition timeline. The first CAF trains are expected 43 months after advance payment, while completion of the full delivery could take up to 58 months. As a result, the first units are unlikely to enter service before the second half of 2029, approximately two years after Expo 2027 concludes. The trains may still support the long-term development of Belgrade’s metropolitan railway system, but the project timeline limits the relevance of Expo as the primary justification for the purchase.
BG Voz expansion requires broader transport planning
The expansion of Belgrade’s suburban railway network requires additional rolling stock as the city develops new transport links. Future plans envisage stronger connections between BG Voz, Belgrade Airport, Surčin, the National Stadium area and the wider metropolitan transport system. A high-frequency regional railway network for a city of Belgrade’s size requires sufficient fleet capacity, modern infrastructure and reliable operations.
The procurement would therefore require long-term planning covering demand forecasts, service frequency, depot capacity, electrification, operating costs and future subsidies. Presenting the investment primarily through a temporary event-related deadline risks placing political timing ahead of broader transport economics.
CRRC supplies additional electric trains for Serbian network
Serbia has also signed a €21.6 million agreement with China’s CRRC for nine electric trains intended for the urban and suburban route connecting Zemun Polje, Nikola Tesla Airport and the future National Stadium. The trains were expected to arrive by the end of 2026. Separately, Serbia purchased five CRRC electric trains capable of speeds of up to 200 kilometres per hour.
According to public audit information, the purchase was valued at approximately €54.5 million, representing an average cost of around €10.9 million per train. These trains have entered service on the modernised Belgrade–Subotica corridor, highlighting the differences between upgraded railway sections and older parts of the national network.
While modern trains can operate according to European conventional high-speed standards on renovated routes, deteriorated infrastructure, outdated signalling and ageing equipment continue to limit speeds on some regional lines to 30 kilometres per hour or less. A train fire near Jasenovik in July 2026 involving a service operating between Niš and Svrljig highlighted the contrast between new flagship infrastructure projects and ageing regional railway assets.
Tram procurement brings further scrutiny over competition
Belgrade’s tram purchases have also attracted attention. In 2024, the city signed a contract with Turkey’s Bozankaya for 25 low-floor trams valued at approximately €63.7 million excluding VAT. The contract corresponds to around €2.55 million per tram, although some public comparisons have estimated the effective cost closer to €2.7 million per vehicle, depending on included equipment and services. Critics have compared the price with Bozankaya trams supplied to Timișoara, claiming Serbian vehicles were more expensive by as much as €800,000 per unit.
Such comparisons require consideration of differences in vehicle specifications, length, spare parts, warranties, financing arrangements and contract timing. Large price differences require detailed public explanations, particularly when purchases are financed through public resources and implemented by municipal transport operators facing financial constraints. Operational questions have also emerged. The Centre for Local Government has claimed that only 12 to 14 of the 25 vehicles have regularly entered service because of technical and compatibility issues. A full assessment would require public data on acceptance testing, defects, warranty repairs, daily availability and maintenance performance.
New tram tender increases importance of technical competition
Belgrade later launched a tender estimated at €188.6 million for another 85 three-section low-floor trams. The procedure was temporarily suspended following objections that technical requirements could favour Bozankaya. Because the purchase would shape Belgrade’s tram fleet, depot infrastructure and spare-parts systems for decades, competition among suppliers is considered a significant factor.
Different vehicle platforms create additional long-term costs. Separate manufacturers often require different diagnostic systems, specialised tools, inventories, training programmes and maintenance agreements. These expenses may not appear in initial purchase prices but become important over vehicle lifecycles of 25 to 35 years. Fleet standardisation can reduce maintenance complexity, but excessive dependence on one supplier can create risks related to proprietary software, spare parts and service availability.
Alstom metro project adds another major foreign procurement
Serbia’s planned Belgrade Metro represents another major transport investment involving a foreign supplier. France’s Alstom has been selected to supply 32 metro trains, with rolling stock included in a wider French-backed package covering the first metro line. Publicly discussed figures place the combined value of train supply, system design and construction-related elements at approximately €915 million. Comparisons with other metro projects have raised questions about costs, including comparisons with a €1.7 billion agreement in London involving 94 Siemens trains and related line works.
Metro contracts differ significantly depending on whether they include signalling systems, depots, power infrastructure, civil engineering works, design services and long-term support. The central procurement issue is that Serbia did not conduct an open tender allowing manufacturers to compete on comparable technical and financial terms. Without competitive bidding, it is difficult to demonstrate that the selected package represents the most efficient option in terms of price, technology or lifecycle cost.
The metro project is also part of a wider government-to-government relationship involving French financing, engineering and project participation. Such arrangements can accelerate implementation but place greater importance on transparency regarding contract details, including cost allocation, supplier obligations, price adjustments and performance guarantees.
Siemens Kragujevac facilities remain focused on exports
While Serbia is purchasing foreign rolling stock, Siemens Mobility’s Kragujevac operations continue producing rail vehicles primarily for international markets. The company operates two facilities in Kragujevac employing approximately 1,050 people. The plants manufacture trams, railway coaches and train-end structures as part of Siemens’ European production network.
Current production supports customers including cities such as Nuremberg and Ulm, while additional opportunities have also been discussed for the United States market. In 2025, the Kragujevac business generated revenue of approximately RSD 21.25 billion (€181 million) and net profit of RSD 446.6 million (€3.8 million). These figures demonstrate that Serbia already has an operational rail-manufacturing base integrated into global industrial supply chains. Workforce representatives have claimed Siemens could have supplied Belgrade trams at a price €450,000 to €500,000 lower per vehicle than the Bozankaya purchase.
Siemens has not commented on individual tenders or third-party procurement decisions, meaning the claim cannot be considered a formal commercial offer. The discussion reflects the absence of a publicly documented market comparison.
Industrial strategy remains separate from transport procurement
A Siemens-produced Serbian order would not automatically guarantee manufacturing in Kragujevac. Production decisions within multinational companies depend on plant capacity, product platforms, workforce capabilities and existing order commitments. A Serbian procurement contract would require explicit local-production or industrial-participation conditions to ensure domestic facilities receive manufacturing work.
The broader issue is that Serbia has treated rolling-stock purchases mainly as individual transport contracts rather than as elements of a national rail-industry strategy. Procurement decisions, export-credit financing, domestic production, maintenance capabilities and workforce development have not been integrated into one framework. A local-content strategy would not require every component to be produced domestically.
Modern trains rely on imported propulsion electronics, braking systems, signalling equipment and specialised materials. The relevant measure would be the share of contract value retained in Serbia through activities such as final assembly, fabrication, installation, testing, maintenance training, spare-parts storage and supplier development.
Domestic production can generate additional economic effects through employment, taxes, local services, logistics and future export capabilities. Even a domestic offer priced 5% to 10% higher than an imported alternative could potentially have broader economic value when employment, tax revenues and industrial development are considered.
Siemens production plans face delays amid European competition
The importance of domestic industrial capacity has become more visible as Siemens’ Kragujevac operations face delays. The company had been expected to begin producing complete aluminium trains at the facility, but the project has reportedly been postponed by three to six months. Between 20 and 30 employees may temporarily take paid leave.
The delay reflects competition within Siemens’ European manufacturing network, including pressure from German facilities seeking additional production opportunities. A large Serbian order would not resolve all internal production decisions, but it could have strengthened Kragujevac’s position within Siemens’ industrial network. Instead, Serbian public financing is supporting rail production in Spain, France, China and Turkey, while Serbia’s own manufacturing platform continues competing for international orders.
Multiple suppliers create long-term maintenance obligations
Using multiple international suppliers provides Serbia with access to technologies from Stadler, CRRC, CAF, Alstom, Bozankaya and Russian manufacturers. Supplier diversity also creates a fragmented fleet structure that may increase future maintenance complexity. The financial implications extend beyond initial purchase prices. The CAF, CRRC, Alstom and Bozankaya contracts create long-term obligations related to maintenance, software support, spare parts, depot modifications and workforce training.
These commitments may continue for decades beyond the political periods in which the contracts were approved.
State guarantees also contribute to Serbia’s contingent liabilities. Individual guarantees may appear manageable, but repeated commitments for financially weaker public operators can create future fiscal pressure if companies cannot meet repayment obligations. Serbia requires continued investment in trains and trams as its ageing fleet and expanding metropolitan transport needs demand modernization. The challenge remains creating a procurement model that combines transparent competition, lifecycle-cost analysis and stronger links with the country’s existing rail manufacturing capabilities.
