Thailand has decided not to rely solely on Chinese loans to fund the two countries' joint railway projects because the interest rates are too high.
Transport Minister Prajin Juntong said Tuesday the lowest interest rate offered by China is 2%, but this is only for noncommercial work such as railway and system construction, and civil and structural work.
For commercial activities such as train operating systems, China has offered a 4% interest rate. China said Thailand is not an underdeveloped country and therefore does not deserve a 2% interest
rate.
As a result, investment in civil engineering and structures will be financed through other sources, such as domestic ones, said ACM Prajin. The matter has been discussed with the Finance Ministry, he added.
Domestic loans, bond issuances and raising capital through an infrastructure fund are all possible methods of financing the jointrailway projects.
Land expropriation costs will be covered by the national budget, he said.