Thailand asks China to increase rail project spending
Uncertainty remains in the Thai-Chinese railway development project linking Nong Khai and Bangkok after Thailand came up with a new proposal asking China to increase its investment.
Given China's affluence, the government has asked China to invest in civil works, trains and operating systems in the construction of the railway, Deputy Prime Minister Somkid Jatusripitak said yesterday.
Thailand signed an agreement with the Chinese government last December to build an 873-kilometre double-track route from the northeastern province of Nong Khai to the industrial area of Map Ta Phut in Rayong province, passing through Bangkok.
The rail line will carry medium-speed trains accommodating mostly freight or goods deliveries. It will cost about 400 billion baht.
Though negotiations are not finalised, especially those concerning the project's loan interest rates, the ground-breaking ceremony for an operations control centre was held as planned last Saturday at Chiang Rak Noi railway station in Ayutthaya and attended by Deputy Prime Minister Prajin Juntong.
Under a draft cooperation framework for the project approved by the cabinet on Nov 17, Thailand and China will establish special vehicle companies to run the train system, train operations and maintenance and repair services.
The project's development will be based on the engineering, procurement, construction method in which Thailand is the project owner, while China designs, procures and constructs track systems and equipment.
China will be responsible for construction that requires high technology such as tunnels, bridges and the rail operating system.
Thailand will be in charge of environmental impact assessments, civil works, land expropriation, electricity supply and equipment support for construction.
Funding will come from several sources -- the fiscal budget, borrowing from domestic financial institutions and international loans, mainly from the Export-Import Bank of China but on condition that lending rates do not exceed domestic rates.
Rail operation and maintenance will be divided into three phases, with China fully responsible for the first three years after completion.
In years four to seven Thailand and China will have equal responsibility, while after seven years Thailand will take over full responsibility, with China serving as an adviser to the project.
Under the framework, China will provide training for Thai officials. The framework will have a five-year term and can be extended if the two governments agree.
Mr Somkid said the Transport Ministry would ask Chinese authorities to clarify the investment costs after China estimated the joint project would cost up to 500 billion baht.