As construction workers cut up railway tracks in southern Hungary, the country marked its latest move toward becoming a European logistics hub. 

The Budapest to Belgrade railway is the first major infrastructure project in Europe for China's Belt and Road Initiative and the second most expensive infrastructure project in Hungarian history. 

Once complete it will provide a direct connection between Budapest and Belgrade, cutting the journey time between the capitals from eight hours to around three and half. 

"It will be the most modern rail route from Budapest to the capitals of the neighbouring countries," chairman of Hungarian railway company MAV Co, Robert Homolya, told CGTN Europe.

The current rail tracks haven't been updated since the 1960s and work is beginning in sections to increase speed and capacity.

Eventually tracks across Hungary and Serbia will link to create a 350 kilometer route and a pathway to the Greek port of Piraeus. 

Hungary's Minister for Innovation and Technology, Laszlo Palkovics, told CGTN Europe it was an important connection.

"The Piraeus port is the only deep sea port, that's why most of the Chinese goods are going to come to that point, but we need to bring them to Europe, so that's why this will be the quickest and actually the most convenient way."

The Hungarian government believes rail modernization will help turn Hungary into a logistical hub and increase investment around the country, monetizing Hungary's geographical position.

It is an expensive endeavour with Hungary signing onto a Chinese loan worth more than $2bn in 2020. Montenegro is currently seeking EU assistance to help pay back a billion-dollar highway it funded through China's Belt and Road Initiative, but Hungarian officials are confident their debt can be repaid.

"The Hungarian government doesn't make decisions which would negatively impact our future, this is not as big a loan as it seems actually when you compare it to the Hungarian economy," said Palkovics.

In September it was revealed the EU would begin investing in a Global Gateway to fund infrastructure and logistics links across the globe. She described the Global Gateway as necessary to ensure the EU creates "links and not dependencies."

The Budapest to Belgrade railway is due to be operational in 2025.