The Finance Ministry is ready to borrow 170 billion baht to finance the first phase of the Thai-Chinese railway project, according to its minister.
Apisak Tantivorawong said on Monday the entire project cost of 170 billion baht had already been added to the ministry’s borrowing plan for fiscal 2018 starting in October.
"How much we'll borrow initially will depend on the need. We can borrow both locally and from abroad. If China offers to lend us at cheap costs, we may borrow from it,” he said.
Borrowing is therefore not a problem and can be done immediately as soon as the Transport Ministry needs the money, he added.
"However, we have yet to see the spending plan so it’s too early to say whether we’ll borrow the entire amount."
Deputy Prime Minister Somkid Jatusripitak said as China was expanding trade and investment worldwide, Thailand can link regional rail networks thanks to its location in the heart of Asean.
"This is called planning on a national scale. And this is how we should view it. Those with a short-term vision shouldn’t run the country," he said.
In terms of cost effectiveness, he admitted it was hard to justify the cost based solely on fares.
"We need to look at economic benefits. A rail network links cities and creates new ones. There will no longer be just Bangkok and Chiang Mai. Tourism in the provinces will boom."
Mr Somkid also said land along the route would be developed and Thailand did not give this right to the Chinese, easing concern the condition would be required like in the Lao-Chinese railway where the mainland has the right to develop land along the routes.
"We hire the Chinese only for the rail and electrical systems; the rest will be handled by Thais. It has to happen in this government since the last two government could not realise it.
"Look at the Shinkansen [Japan’s rail network]. It was built 50 years ago. We’re 100 years late.”
The project is being vetted by the National Economic and Social Development Board. Once done, it will be sent to the Cabinet for approval after which bidding will start.
Construction is expected to begin in September for the first 3.5km section from Klang Dong station to Pang Asok station in Nakhon Ratchasima province.
Chaiwat Thongkamkoon, director-general of the Office of Transport and Traffic Policy Planning, said on Monday technology transfers were the major part of the project.
"The MoU signed in 2014 stipulates that China will train Thai officials responsible for the operation and system development,” he said.
Eighty staff of the State Railway of Thailand were sent for a 40-day training in China. The Chinese Commerce Ministry also held a high-speed railway training for 170 Thais for free, he said.
A free 20-day seminar is also being held at Beijing Jaitong University in the Chinese capital for 25 Thai academics and officials, he added.
The 603-kilometre Thai-Chinese train project has two phases. The first phase to be built in September involves a 252.5km railway linking Bangkok with Nakhon Ratchasima while the second phase connects Nakhon Ratchasima with Nong Khai (350km).
The rail network will be medium-speed, supporting 160-180 kilometres per hour, compared to at least 200 kmph for high-speed railways.