China wants Thailand to jointly seek loans from the Export-Import Bank of China to fund the Bangkok-Nong Khai dual-track rail route project but a panel overseeing the project says the interest rate quoted for the loans is too high.
"The proposed form of joint investment for this project will be reviewed once again. As for the interest rate quoted, the panel thinks it is too high," said Deputy Transport Minister Arkhom Termpittayapaisith, chairman of the sub-committee overseeing the project.
"Thailand used to get loans from the Japan International Cooperation Agency (JICA) to fund electric train projects, such as the Airport Rail Link, with interest rates of only 1.5%," he said.
Speaking after chairing the panel Thursday, Mr Arkhom said China had proposed the two countries apply for the loans from its EximBank to fund the 878-kilometre route with interest rates of 2-4%.
The loans will be interest-free in the first few years with the project expected to break-even in 20 years, said Mr Arkhom.
China also proposed the project adopt Chinese technology in design, construction, and managing train services while Thailand insisted it would rather manage the train services on its own, he said.
In response to China's proposal to invest in a factory to produce train parts and assemble them in Thailand, Mr Arkhom said the matter would be discussed again at meetings next Wednesday and Thursday in Beijing.
The investment will take the form of a government-to-government arrangement while the implementation will be divided into four phases, he said.
Construction is expected to begin in December this year or early next year, he said.
Meanwhile, Meng Jianzhu, secretary-general of the Committee of Political and Legal Affairs under the Communist Party of China Central Committee, met with Prime Minister Prayut Chan-o-cha to discuss bilateral cooperation in the rail project as well as other economic, energy, trade, and educational cooperation ventures.
Gen Prayut extended greetings to Chinese President Xi Jinping through Mr Jianzhu whom he regards as a special envoy of the Chinese president.
He is visiting Thailand until Sunday. China's Defence Minister Chang Wanquan is scheduled to meet Gen Prayut today.