Train talks derailed by contract fees

Train talks derailed by contract fees

China says two-year warranty costs more

Arkhom Termpittayapaisith, Minister of Transport, said talks in Beijing broke down over complicated issues involving how to finance the 252.5-kilometre high speed railway between Bangkok and Nakhon Ratchasima. (File photo)
Arkhom Termpittayapaisith, Minister of Transport, said talks in Beijing broke down over complicated issues involving how to finance the 252.5-kilometre high speed railway between Bangkok and Nakhon Ratchasima. (File photo)

Thai and Chinese authorities failed to find common ground on a contract they were supposed to sign under the Thai-Sino high-speed railway project when they met late last month, Transport Minister Arkhom Termpittayapaisith said Monday.

Known as "Contract 2.3", this is one of 14 separate deals that are required for the 252.5-kilometre-long section from Bangkok to Nakhon Ratchasima.

The contract, which involves the tracks, electricity system, machinery, procurement of train carriages and training, was on the agenda of the meeting between Thai and Chinese officials in Beijing from Feb 27 to March 1.

Mr Arkhom said the contract has not yet been signed and that more talks were needed, adding the document is expected to be inked next month.

Referring to the latest meeting, the minister said the value of the contract was revised up by 7 billion baht to 45 billion baht, but the Chinese want more money.

The warranty period has also to be agreed, he said.

Thailand adheres to the international standard of a two-year guarantee, while China, which proposed just one year, is demanding more money for the extended term, according to Mr Arkhom.

He said Thai officials asked their Chinese counterparts why the longer guarantee was an issue if the materials being supplied were of high quality.

The type of train that will be purchased also has to be decided, he said.

Referring to Contract 2.3, he said Thailand would possibly seek a 38.2-billion-baht loan from China, or around 85% of the investment cost, if it agrees on 45 billion baht. The interest rate could be lower than 3%.

Mr Arkhom, referring to another high-speed railway project from Bangkok to Prachuap Khiri Khan's Hua Hin district, said it the authorities are now inviting private companies to invest in the scheme under a Public-Private Partnership agreement.

The 77-billion-baht scheme is likely to be proposed to the cabinet this month and the rail service could be launched in 2027, the minister noted.

Meanwhile, attention is being fastened on talks between the Charoen Pokphand Group-led consortium and the State Railway of Thailand (SRT) over the bidding for a high-speed railway project connecting three major airports -- Don Mueang, Suvarnabhumi and U-tapao.

The consortium offered the lowest bid, but it has not yet been named as the winner because its offer is subject to due diligence by the SRT's bidding committee.


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