Serbia and Russia have entered final negotiations for a $800 million loan to overhaul the Balkan country's dilapidated rail network, the Serbian infrastructure ministry said on Tuesday.

      Assistant Infrastructure Minister Dejan Lasica said negotiators should iron out details by the end of the week on a first deal worth 50 million euros ($66 million) for repairs to a 15-kilometre stretch of railway between the capital Belgrade and the northern town of Pancevo.

      "This first agreement is very important as the other deals will follow the same pattern," Lasica said. "We are now negotiating the share of participation of Serbian and Russian firms and prices."

      The $800 million loan is a part of a wider economic pact between Serbia and Russia agreed in 2009.

      Serbia is seeking investors to improve its ageing infrastructure, mismanaged and neglected during the wars and sanctions of the 1990s and damaged by NATO bombs in 1999.

      The loan envisages the participation of subsidiaries of Russia's state-run OAO Russian Railways in the project and purchases of Russian-made diesel locomotives, Lasica said.

      It will also include track repairs between the west Serbian towns of Valjevo and Loznica, reconstruction of Serbia's key rail link to the Adriatic port of Bar in neighboring Montenegro, and the completion of a new railway station in Belgrade.

      Parliaments of both countries must ratify the full deal once agreed. ($1 = 0.7567 euros)