Thailand firm on train loan conditions

Thailand firm on train loan conditions

Thailand, Japan sign Red Line loan

A boy looks at a high-speed train model during an exhibition held at Chiang Rak Noi station in Ayutthaya on Dec 19, 2016 to promote the Thai-Chinese project. (Photo by Chanat Katanyu)
A boy looks at a high-speed train model during an exhibition held at Chiang Rak Noi station in Ayutthaya on Dec 19, 2016 to promote the Thai-Chinese project. (Photo by Chanat Katanyu)

Thailand remains firm on the conditions of the loans it is seeking from China for the joint high-speed train project which has been bogged down by disagreements over the interest rate.

The Public Debt Management Office on Friday insisted on the maximum 2% interest rate and indicated that the government would turn to local financial sources if the issue goes nowhere.

Thailand and China agreed to construct the first phase of the high-speed train project from Bangkok to Nakhon Ratchasima. But the construction of the long-delayed route has not started because the two countries could not agree on the loan conditions after 13 rounds of negotiations.

China demanded a 3% interest rate, saying it was a market rate. But Thailand wanted a lower rate as it viewed it was a government-to-government scheme.

PDMO director-general Suwit Rojanawich said the country would not pay more than 2% and added that if the loan talks fail, the government would borrow locally.

Of the 179-billion-baht project cost, Thailand will pay in baht for the design and consultant services while China will lend in yuan or US dollar for the system, Transport Minister Arkhom Termpittayapaisith said on Sept 22. 

Prime Minister Prayut Chan-o-cha said at the Bangkok Post Forum 2016 on Wednesday that the Thai-Chinese train project would move forward as it was part of the strategy to improve the transport system across the country.

According to plan, all train lines in and out of Bangkok will start at a new hub at Bang Sue, which will replace Hua Lamphong as the capital's central station. It will connect with mass transit lines and buses running in Greater Bangkok.

Peerapol Tawornsupchareon, deputy permanent secretary for transport, said on Thursday that the new train gateway would be completed by the 2019 schedule.

Land plots around the new Bang Sue station will be turned into a new business, commercial and office centres, the official added.

On Friday, Finance Minister Apisak Tantivorawong and Japanese ambassador to Thailand Shiro Sadoshima signed an agreement on the third tranche of loans for the Red Line from Bang Sue to Rangsit.

The 53.4-billion-baht loan for the mass transit project came with a 0.3% interest rate due in the next 15 years with a five-year holiday.

The Red Line is due to open by 2020 and could carry at least 300,000 passengers from Rangsit to downtown Bangkok.

Do you like the content of this article?
COMMENT (13)