CP, ThaiBev tipped as investors

CP, ThaiBev tipped as investors

Prayut says local giants seek partners

Charoen Pokphand Group (CP) and Thai Beverage Plc (ThaiBev) may invest in the country's first high-speed train, Prime Minister Prayut Chan-o-cha said on Monday.

Several private sector companies, including the two largest business groups, CP and ThaiBev, are on the lookout for partners to bankroll the government's high-speed train project, Gen Prayut said.

The two routes covered by the 200km-per-hour train are from Bangkok to Hua Hin and Bangkok to Pattaya.

While Gen Prayut has no idea how many private partners will team up with CP and ThaiBev to invest, share concession benefits, or provide loans, he said firms are likely to come up with their best offers as the project is lucrative.

One news report said that, in addition to the agribusiness conglomerate CP group and Chang brewer Thai Beverage, industrial estate operator Amata Corporation Plc, consumer products giant Saha Group and skytrain operator Bangkok Mass Transit System Plc are said to be interested.

Meanwhile, Transport Minister Prajin Juntong said the project details will be summarised and forwarded to the cabinet for consideration by May.

Gen Prayut also said bidding for concessions will be called in the next few months, as everything must be completed before the next election. A concessionaire will be finalised by the end of 2015.

The high-speed trains are an urgent priority for the government's transport infrastructure development strategy, he said.

ACM Prajin said the railways assessment shows only a 40% return on investment costs within its first 10 years, considered a business loss. But 60% of investment will be returned to entrepreneurs after 10 years of operation, which is a healthy return, he said.

Railway station service area profits and economic growth from surrounding urban developments would also need to be included in the commercial benefit calculations, he said.

"I urge the Office of Transport and Traffic Policy and Planning (OTP) to conduct a feasibility study of both rail routes and compare it to the previous one carried out," ACM Prajin said.

Earlier the OTP sounded out investors' opinions on high-speed train routes between Bangkok-Pattaya-Map Ta Phut and Bangkok-Padang Besar. It found that long-distance railways will not be profitable due to costly fares that will restrict passenger numbers.

But the Bangkok-Hua Hin route has many tourists and will host additional commuters due to the urban development of Phetchaburi province, he said, while the Bangkok-Pattaya route also serves both tourists and workers.

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