A man takes a close look at the Chinese train model exhibited in Chiang Rak Noi station in Bang Pa-in district, Ayutthaya, on Dec 19, 2015. (Photo by Chanat Katanyu)
Loan interest rate issue has delayed Thai-Chinese rail project with Thai govt urging China to cap interest rate at 2%.
TRANSPORTATION
China to drop loan rate for train project
19/01/2016
Amornrat Mahitthirook
China has agreed in principle to reduce the interest rate for loans for its joint rail project with Thailand, Transport Minister Arkhom Termpittayapaisith said on Tuesday.
After several rounds of negotiations, China's vice-premier promised to slash the interest rate to 2% from 2.5%.
"In the latest talks with Deputy Prime Minister Somkid Jatusripitak, Chinese Vice Premier Wang Yang pledged the 2% interest rate," Mr Arkhom said.
The pledge could become official at the two countries' next meeting, expected in February, at which time the joint venture's structure could be finalised.
The transport and finance ministries are considering increasing China's stake in the project to 70% from the proposed 60%. Mr Arkhom said the issue will be decided before the next meeting.
He said increasing China's investment will not derail the project because the operational plan remains unchanged with China letting Thailand take over all operations after seven years.
The loan issue has played a part in the delay of the Thai-Chinese train scheme as the government repeatedly had urged China to cap the interest rate at 2%.
The project covers the medium
medium
Meaning: in the middle between two sizes, amounts, lengths, temperatures, etc; not large, not small
Thai Translation: ปานกลาง, ขนาดกลาง
Learn more
speed train routes from Nong Khai to Map Ta Phut in Rayong and Kaeng Khoi to Bangkok.
The two countries expect construction to get underway in May.