Thailand approves $12 bln Japan railway scheme

Construction News

May 26 Thailand’s cabinet has approved a $12 billion railway project to be built with Japanese help, a deputy government spokesman said on Tuesday, one of several big-ticket plans the government hopes will stimulate Southeast Asia’s second largest economy.

The Thai-Japan rail project is the latest initiative by the military government to help jump-start a slowing economy by strengthening infrastructure, employment, transport and tourism.

“Thailand’s transport minister will be the one to sign the memorandum of cooperation agreement for the railway system with the minister of Land, Infrastructure, Transport and Tourism of Japan tomorrow,” Colonel Weerachon Sukondhapatipak, the deputy government spokesman told reporters.

The high-speed rail scheme will cover a distance of 670 km (416 miles), connecting Bangkok to the northern city of Chiang Mai.

Construction could begin as early as the second quarter of 2016.

Thailand’s trade-dependent economy is stuttering amid slow demand for its exports. The state planning agency recently cut its 2015 full-year growth to 3 to 4 percent from 3.5-4.5 percent.

The government has yet to disclose details on a second railway route connecting the Thai capital Bangkok to various industrial zones, including a deep-sea port on Thailand’s eastern seaboard.

The railway projects are separate from the government’s eight-year investment plan worth more than $56 billion to upgrade infrastructure, including the development of public transportation, railways, roads and sea and air transportation.

The ruling junta has targeted infrastructure spending as a long-term fix to some structural problems that has been a drag on the economy. The projects are also expected to stimulate private investment.

($1 = 33.5500 baht) (Reporting By Aukkarapon Niyomyat; Writing by Pairat Temphairojana; Editing by Amy Sawitta Lefevre & Shri Navaratnam)