China-Thai-Lao railways: Interest rate problem & more delays

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Infographic showing Thai-Chinese rail project showing September, 2015 start date before the delays that have plagued the project.

China-Thai-Lao railways: Interest rate problems

30/10/2015
Amornrat Mahitthirook

Construction of two medium speed railway routes under a Thai-Chinese agreement faces yet another delay, less than a month after the two countries pledged to speed up the project.

The rail project was originally set to start off on Oct 23, then came the first delay with the two countries promising on Oct 9 to try to get the project going by December and to kick it off with a groundbreaking ceremony before the year came to an end.

MAY NEXT YEAR NEW TARGET: NO AGREEMENT ON LOANS YET

May 2016 is the new target for starting work, after the latest round of talks last Wednesday and Thursday in Beijing.

Thailand wants a revised feasibility study of the project from China and there is still no agreement on the loans from China and the form of the joint venture.

Thailand has awarded China the right to build two medium-speed train lines — from Nong Khao to Map Ta Phut in Rayong province, and Kaeng Khoi district in Saraburi province to Bangkok with a total investment cost of around 400 billion baht

LAOS SEEKS BETTER INTEREST RATE ON LOANS

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Route taken by Lao-China railway to Nongkhai in Thailand.
In a related story, Laos is seeking a better loan interest rate for its joint railway project with China. Beijing currently offers a US$500-million loan with a 3% interest rate for 20 years.

The two countries earlier agreed on a route from the Chinese border in Luang Namtha province, via the old capital of Luang Prabang to Vientiane linking with Thailand in Nong Khai province, where another Chinese-backed line is expected to be built into Thailand.

The 417 kilometre line in Laos is to be built by a joint venture in which the two governments share 40% of the $6.8-billion cost and their state enterprises the rest. Construction was expected to begin next month and be completed in five years. The project, approved by Laos in 2012, is already far behind schedule because of conflicts with China over the form of investment and loan details.

PREVIOUS BANGKOK POST LEARNING ARTICLES ON RAIL TRANSPORT:

‘Thai-China railway to start this year’ shows railway stages and September 2015 planned start date here

‘China’s railway price 30% higher than original estimate, delays’ talks about the delay after Thailand learned that Chinese estimates were 30% higher than original estimates here.

‘Thai-Japan railway to link Burma & Cambodia’ discusses Thailand’s rail projects with Japan here

‘Rail loans: China’s interest rates too high’ discusses how China refused to give Thailand low interest rates that Laos gets and that Japanese loans might be better here

‘Highspeed rail coming to Laos’ is about the China-Lao agreement to build a railway through Laos here

 

 

Source: http://www.bangkokpost.com/learning/work/751800/china-thai-lao-railways-interest-rate-problem-more-delays