Thais, Chinese agree on 60-40 railway plan

Construction News

Thai and Chinese authorities have agreed on a 60-40 shareholding plan in their first-ever joint venture to oversee management of the double-track rail routes to facilitate travel from Bangkok to southern China.

Their latest meeting resolved to have the State Railway of Thailand hold a 30% stake, Thai private companies experienced in rail management take another 30%, while a Chinese rail developer would own the rest, Transport Minister Prajin Juntong said yesterday.

The scope of the joint development covers a total of 867km of double-track rail routes: Bangkok-Kaeng Khoi, Map Ta Phut-Kaeng Khoi and Nakhon Ratchasima-Nong Khai, the far northeastern province opposite the Lao capital of Vientiane.

The agreement on the shareholding structure paves the way for the next stage: hiring a consultant to study the impact of rail construction on the environment, estimating the cost of the project and working on land appropriation issues.

Deputy Transport Minister Arkhom Termpittayapaisith yesterday estimated the construction cost of the 867km rail route at more than 328 billion baht.

Loans the government plans to use to finance the project should not come to more than 10% of its annual budget, he said.

ACM Prajin plans to ask the cabinet to grant funds to hire a consultancy firm on March 27.

At the meeting, the two parties also agreed on rail management, he added. In the first three years after construction is complete, China will be responsible for operations. From years four to seven, China and Thailand will be co-operators.

After seven years, during which China will transfer technological expertise to Thai technicians, Thailand will run the service with China acting as an adviser.

Thai and Chinese authorities are scheduled to meet early next month to discuss in detail the establishment of the joint venture.

“We hope to reach a conclusion at the next meeting so that we can start work in October this year,” ACM Prajin said.

There are many issues for both Bangkok and Beijing to consider. They are, for example, preparations to acquire new trains and a plan to seek loans from China for the electrical and railway signal systems.

ACM Prajin yesterday visited a site where the railway will be constructed in Nong Khai. He said construction of the dual-track with 1.435m standard gauge will be mainly carried out along existing rail lines. However, the government needs to expropriate some land near the tracks to build new stations.

Thai contractors will be hired to do infrastructure work, he said, adding that between 12 and 15 potential construction companies have been considered.

Authorities will also consider hiring Thai firms adept at producing important railway materials for the project, he added.

During his visit to Nong Khai, ACM Prajin told reporters the government envisages the province as a regional transit point linking inner provinces and Vientiane, where Lao officials are also working on a plan to build a double-track rail route from the capital to Kunming — the largest city in China’s Yunnan province.

The envisaged boost to transport facilities in Nong Khai has led to a push to develop the province into a new economic area.