Japan has reiterated its lack of interest in co-investing in a high-speed rail project linking Bangkok with the northern province of Chiang Mai, and suggests Thailand should solely invest in the scheme, a source at the Transport Ministry says.
Japan's stance was reaffirmed at a meeting between Transport Minister Arkhom Termpittayapaisith and Keiichi Ishii, Japan's Minister of Land, Infrastructure, Transport and Tourism, during Mr Arkhom's Oct 19-20 visit to Japan.
The source, who asked not to be named, said the Japanese reasoned that the high-speed rail project is a national asset that the Thai government should pursue on its own, the source said.
Chaiwat Thongkamkoon, transport permanent secretary, said negotiations over the project have been inconclusive.
Costs of the rail link project stretching 670 kilometres from Bangkok to Chiang Mai are estimated at 400 billion baht. The project is divided into two phases, with the first 380km phase from Bangkok to Phitsanulok to cost about 276 billion baht.
The source said Japan has turned away from the project because it is not worth investing in. While the economic internal rate of return (EIRR) is estimated at 14%, the financial internal rate of return (FIRR) is extremely low.
In late July, the State Railway of Thailand (SRT) expressed concerns the high-speed railway would run at a loss when it opens, citing a 66% drop in predicted daily passenger numbers. However, it is possible for Japan to offer low-interest loans to fund the project costs.
The concerns were based on the results of a feasibility study from the Japan International Cooperation Agency (Jica) which showed there would be around 10,000 passengers per day, against the original estimate of 30,000.
The entire route should service around 50,000 passengers per day in order to profit from journey fares.