China offers loan for train project
The Exim Bank of China has offered Thailand a 20-year loan for the construction of two new railway lines but the terms of the loans will need to be renegotiated. In December Chinese companies won the right to build rail lines from Nong Khao to Map Ta Phut in Rayong via Kaeng Khoi district in Saraburi and from Kaeng Khoi to Bangkok.
The loan offered had an interest rate
interest rate
Meaning: the percentage that a bank or other financial company charges you when you borrow money, or the percentage it pays you when you keep money in an account
Thai Translation: อัตราดอกเบี้ย
Learn more
ranging from 2 to 4% and a four-year interest-free period with conditions attached. The conditions included a requirement for the project to use Chinese technology and give China responsibility for the design and civil works. China also wanted to manage the routes in exchange for the loan.
The Exim Bank's conditions were not acceptable as Thailand remained firm on managing the trains on the new tracks. The interest rate for the loan was also too high and Thailand had asked Beijing to lower it. The loan from the Japan International Cooperation Agency (JICA) for the construction of the Airport Rail Link had an interest rate of only 1.5%.