Hungary contracts Chinese-owned railway carrier company to transport military gear

Hungary’s Defence Procurement Agency’s awarded a contract for operating military cargo trains to a Chinese-owned company. Besides the Chinese firm, a company owned by the honorary consul of Kazakhstan is also involved in the deal.

In a recently published announcment, the Defence Procurement Agency,  a state-owned firm overseeing military investment, revealed the result of a 1.57 billion HUF tender, the winners of which will provide rail transport for the Hungarian Defence Forces in Hungary and other European countries.

The tender was won by GHIBLI Transport Ltd, which will subcontract the task to CER Hungary Közép-Európai Vasúti Árufuvarozási, Kereskedelmi és Szolgáltató Zrt, who will be performing said tasks until 2028.

OPSEC risk

The publication of the results is somewhat unusual. The Defence Procurement Agency’s purchases are often classified – indeed, the tender was not published in the official Hungarian procurement gazeta.  However, the original tender and its result have been added to the EU’s TED database. So while no technical details have been published (such as what needs to be transported on rail), the contractors’ name and the contracts’ value have been revealed.

It has also been published that the contractors are expected to transport cargo to and from most NATO member states in Europe,

including the Baltic states, the Balkans, Scandinavian countries, as well as Austria, Belgium, Croatia, France, Germany, Italy, Spain and Turkey.

The winning GHIBLI Transport Ltd. is majority (62%) owned by CECZ Central European Commercial and Logistics Cooperation Belt Ltd., which is in turn owned by three Chinese businessmen and a Chinese company called Shandong Dihao International Investment Limited Company.

The minority (38%) share of GHIBLI Ltd. is owned by AEDUS LOG Szolgáltató Kft., owned by Zoltán Szabó. The Hungarian also owns and/or manages several companies together with the Chinese citizen Wu Jiang (pronounced Vu Jiang), who owns the majority (70%) of CECZ. Szabó and Jiang are both managing directors of GHIBLI Ltd.

Chinese ties and plagiarism

The sole owner of CER Zrt., which is subcontracted by GHIBLI for the transport of the defence forces, is László Horváth through several companies (CER Cargo Holding SE European Ltd. and Rail Development Kft.).

László Horváth, who has the title of Honorary Consul of Kazakhstan, is good friends with Mihály Varga, President of the National Bank of Hungary and former Finance Minister, as well as Sándor Fazekas, former Minister of Agriculture. All three are from the town of Karcag.

It was likely due to these relationships that in 2023 Horváth received 781 million forints in state subsidies for developing a sewing factory, which came to nothing.

Another one of Horváth’s company’s wrote studies about sheep breeding practices in Kazakhstan, ordered by the Ministry of Agriculture

– large parts of these studies were found to be plagiarized.

Shandong’s Hungarian subsidiary, CECZ Ltd, which owns GHIBLI Ltd, the winning bidder for the defence supplies, has been operating in Hungary since 2011. It is headquartered in the 15th district of Budapest, in the China Mart shopping centre, and has 10 subsidiaries in total.

One of these is GHIBLI, a freight forwarding and warehousing company with warehouses in the free port of Csepel (where it is also headquartered), at the Budapest and and Debrecen airports, as well as in Vác and Vecsés. The smart warehouse in Vác, which is still under construction, is expected to employ around 200 people and 700 robots, and the HUF 25 billion investment was supported by the Fidesz government with HUF 10 billion in public funding.

The majority owner (and one of the managing directors) of CECZ is Wu Jiang, who is also the representative of Shandong in Hungary.

This is known because in May 2024, when Chinese President Xi Jinping came to Budapest to meet with Viktor Orban, Wu Jiang met a Hungarian government official on behalf of the Chinese company. Norbert Izer, State Secretary for Tax Affairs at the Ministry of Finance, signed a Memorandum of Understanding on Trade Cooperation with the Chinese businessman.

According to the official account, Izer said at the time that “from Hungary’s point of view, effective economic cooperation with China is of paramount importance for the continuous and dynamic growth of the competitiveness of the Hungarian economy”. He went on to say that the agreement signed with Wu Jiang, representing Shandong, “aims at examining the conditions for the operation of the digital trade environment and the establishment and development of good practices in this field”.

Interestingly, a tender for domestic transportation of military cargo (also valid until 2028) was won by an Austrian company,

Rail Cargo Logistics – Hungaria Ltd., whics is ultimately owned by Austria’s state-owned railway company, Österreichische Bundesbahnen (ÖBB). Other members of the Rail Cargo group have previously been contracted for several defense jobs, such as in 2019, 2021 and 2023. Rail Cargo Logistics also submitted a bid for the 2025-2028 international transportation tender, but was outcompeted by the Chinese company.