Beijing plans to reveal rail route stance

China is expected to reveal next week whether it will agree to a 2% interest rate on a loan for the Bangkok-Nakhon Ratchasima high-speed train project.

The project has been delayed due to financial talks being unsuccessful.

Beijing is preparing to finalise the rate and the loan amount during the 15th ministerial-level meeting in Bangkok.

Thailand has stood firm on the 2% rate while China earlier suggested 3%, saying it is basing its calculation on the market rate.

If the proposals are still at odds, Thailand will change the plan and seek a domestic loan instead, permanent secretary for transport Phi rap hon Thaw ons up ha charoen said yesterday as Thai delegates geared up for the next talks to be held between Wednesday and Friday.

That should be a good way out, he said. Otherwise, “the government cannot answer to society why it needs to borrow from China” if a domestic interest rate is cheaper.

The 252.5km rail route linking Bangkok and Nakhon Ratchasima in the Northeast is a scaled-down version of the original Thai-Chinese dual-track railway project connecting Bangkok with Rayong, Nakhon Ratchasima and Nong Khai in the far Northeast over a distance of 873 kilometres, as part of planned inter-country tracks to connect with Laos and southern China.

Thailand later decided to build only the Bangkok-Nakhon Ratchasima section, following unsuccessful talks mainly regarding the loan interest rate.

Disagreement on the interest rate has continued as Bangkok wants to secure a 53.8-billion-baht loan from Beijing to buy trains and signal systems for the project, which is estimated at 179 billion baht in total.

Thai officials are also worried about the 3.5km track from the Klang Dong to Pang Asok railway stations in Nakhon Ratchasima which is designed by China because it “does not match Thai standards,” Mr Phiraphon said, adding an adjustment is needed because Thailand will use it to set the median price in the bidding.

Chinese officials are expected to suggest a revised design at the next meeting.

If the design, together with the draft contract which still needs some amendments, cannot be settled during the talks, the Transport Ministry will be unable to send the project to the cabinet for final approval.

“We have to see results after the Oct 28 meeting,” he said. “If a conclusion cannot be made, the project’s operation will be affected.”