Govt may tap funds locally for rail project
The government is mulling whether to borrow money from local financial institutions to fund the Bt400-billion Thai-China dual-track rail project if a funding deal cannot be reached with Beijing.
“Thailand needs lending interest rate below 2 per cent annually. If the negotiations [with China] do not succeed, we can borrow from local financial institutions as we have enough domestic liquidity for the project,” Transport Minister ACM Prajin Juntong said yesterday after the second meeting of the Thai-Chinese joint committee on cooperation for the rail project.
He made the comment after the Chinese administration offered loans for the project, but at an interest rate and with conditions Thailand reportedly deemed unacceptable.
The meeting aimed to set the stage for the final meeting between the two governments in China from Wednesday to Friday next week.
Prajin said the upcoming meeting would finalise the investment details and he expected the design and survey work to start this or next month if there were no problems.
Deputy PM Pridiyathorn Devakula said there would be no problem getting loans from local financial institutions to fund the project.
After meeting Li Yong, head of the United Nations Industrial Development Organisation, Pridiyathorn said Li had praised the government’s attempts to improve the industrial sector.
He also briefed Li on a proposal by the Chinese government for the two countries to jointly seek a loan from the Export-Import Bank of China to fund the dual-rail project, but the offered interest rate was higher than what had been offered by the Japan International Cooperation Agency (JICA) in the past, according to MCOT.
The Chinese bank had offered a loan with an interest rate ranging from 2-4 per cent and a four-year interest-free period with the following conditions: Use Chinese technology for the project, give China responsibility for the design and civil work and let China manage the routes, MCOT said. Thailand maintained it must manage the routes, it said, noting that the JICA interest rate for the Airport Rail Link was only 1.5 per cent.
