Rail plans with China endorsed

Construction News Laos

Rail plans with China endorsed

The cabinet yesterday approved joint investment plans with China for three high-speed train routes: Nong Khai-Bangkok, Bangkok-Padang Besar, and Bangkok-Rayong.

However, ministers scrapped a proposal to borrow US$400 million from China, saying the lending conditions were unacceptable.

The Beijing government, through the Export-Import Bank of China, planned to charge 3% annual interest on the 15-year loans, plus A 0.5% management fee and 0.5% fine in case the loans fail to be fully disbursed.

Chinese products must also make up at least 50% of expenses, and principal and interest must be paid twice a year.

Originally, the Transport Ministry planned to use the loans from China to finance the purchase of 50 locomotives, and to improve existing rail lines in northern and southern provinces.

However, it was the Transport Ministry itself that proposed the borrowing be scrapped since the cabinet had already approved 170 billion baht to upgrade the rail system nationwide.

Transport Minister Sohpon Zarum said the borrowing was no longer needed, and in any case the Thai and Chinese governments are now planning to jointly invest in a high-speed train network, which would need funding on a much more substantial scale.

Deputy government spokesman Vachara Kannikar said the two routes 580 km from Nong Khai to Bangkok and 940 km from Bangkok to southern Thailand would cost about 300 billion baht. The 220-km route from Bangkok to Rayong would cost 20-30 billion.

The joint investment framework would cover technology transfer, appropriate routes and rail management.
Mr Vachara said the Chinese and Laotian governments had already agreed to build a standard-gauge line of 420 km from Kunming, to Vientiane. Construction would take about four years.

The transport ministries of Thailand, Laos and China are scheduled to meet soon to discuss connection spots on the regional high-speed routes.

Source: http://www.bangkokpost.com/news/transport/195151/rail-plans-with-china-endorsed

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