China has agreed in principle to reduce the interest rate for loans for its joint rail project with Thailand, Transport Minister Arkhom Termpittayapaisith said on Tuesday.
After several rounds of negotiations, China's vice premier promised to slash the rate to 2% from 2.5%.
"In the latest talks with Deputy Prime Minister Somkid Jautripitak, Chinese Vice Premier Wang Yang pledged the 2% interest rate," Mr Arkhom said.
The pledge could become official at the two countries' next meeting, expected in February, at which time the joint venture's structure could be finalised.
The transport and finance ministries are considering increasing China's stake in the project to 70% from the propsed 60%. Mr Arkhom said the issue will be decided before the next meeting.
He said increasing China's investment will not derail the project because the operational plan remains unchanged with China letting Thailand take over all operations after seven years.
The loan issue has played a part in the delay of the Thai-Chinese train scheme as the government repeatedly had urged China to cap the interest rate at 2%.
The project covers the medium-speed train routes from Nong Khai to Map Ta Phut in Rayong and Kaeng Khoi to Bangkok. The two countries expect construction to get underway in May.