Ministry asks China to ease loan conditions on its first standard-gauge railway route

[Lite Beer]

Ministry asks China to ease loan conditions on its first standard-gauge railway route

BANGKOK: -- The Ministry of Transport has asked China to ease its loan conditions for the construction of Thailand’s first standard-gauge railway, reasoning that the proposed lending rate is too high when compared with rate offered by Japan.

It may look to other sources of fund if these conditions are not relaxed, according to Deputy Transport Minister Arkhom Termpittayapaisith.

Mr Arkhom, who presided over a meeting of the sub-committee in charge of finance and investment for the project, revealed that the Ministry of Transport had requested the Chinese government to extend the grace period of the loan, and also lower the proposed 2-4% interest rate which was considered too high compared to the 1.5 percent offered by the Japan International Cooperation Agency (JICA) which was the major creditor of the Airport Rail Link construction.

According to China’s terms, the two countries will be co-debtors of the Export-Import Bank of China which will be the fund provider.

Both are required to pay off the debts within 20 years plus interest of 2-4%.

He said the ministry has also turned down Beijing’s demand to undertake the construction work as well as the system operation, saying that all the tasks would be the responsibility of the Thai government.

He said the Chinese representatives would have to forward Thailand’s suggestions to their government first.

He said if the newly-adjusted interest rate is still high, Thailand may look for new investment sources by itself.

The standard gauge construction is a government-to-government project and that details of the investment should be concluded at the next round of negotiation which was scheduled for February 11-12 in Beijing, he said.

The country’s first standard gauge consists of two routes covering a combined distance of 873 kilometres..

The first route starts from Nong Khai province in the Northeast and ends at the Map Ta Put deep seaport in Rayong province via Nakhon Ratchasima province and Kaeng Khoi district in Saraburi province.

The other route starts from Kaeng Khoi district of Saraburi to Bangkok.

Source: http://englishnews.thaipbs.or.th/ministry-asks-china-ease-loan-conditions-first-standard-gauge-railway-route

-- Thai PBS 2015-02-06

[Paulc01]

Sooooo, somebody begins to see that all that glisters isn't gold--especially from China.

[Fat Haggis]

I hope the Chinese tell them to take a hike!! They knew the conditions when they negotiated the deal!!!!

[Rob8891]

Sounds like things are getting derailed already...

[smutcakes]

In the new promised world of Thai accountability, transparency, no corruption etc we have a deal seemingly turning sour over money....

Well who would of believed it!

The answer is anyone with an ounce of common sense.

Obviously we don't know the above is true as we have no information on any of the above....go figure.

All we know is that trillions were approved before seemingly money or funding was even discussed. Looking forward to the lads coming on to speak about 50 year debts etc like under the PTP and now justifying debt somehow..... with this new transp.....

[Anthony5]

He said the ministry has also turned down Beijing’s demand to undertake the construction work as well as the system operation, saying that all the tasks would be the responsibility of the Thai government.

The ministry will learn a lot more things when dealing with the Chinese, but to start with, the Chines bring their own people, materials and machinery. They don't use anything from their host country.

And what is more, if they fail in their project, they just leave everything behind, including their people.

Maybe General Happiness could have some talks with some African governments before signing anything with the Chinese.

[dinooz]

In the new promised world of Thai accountability, transparency, no corruption etc we have a deal seemingly turning sour over money....

Well who would of believed it!

The answer is anyone with an ounce of common sense.

Obviously we don't know the above is true as we have no information on any of the above....go figure.

All we know is that trillions were approved before seemingly money or funding was even discussed. Looking forward to the lads coming on to speak about 50 year debts etc like under the PTP and now justifying debt somehow..... with this new transp.....

OK I will bite ,

20 years is better than 50 for starters , at least the figures are under a budget and open to scrutiny ,not off budget. Do you honestly believe the above story would even see the light of day under PTP it would be just another G2G deal kept secret for national security, why ohh why do you guys jump on anything the present govt is trying to achieve , don't harp on about transparency or accountability the past Govt had neither .

[smutcakes]

In the new promised world of Thai accountability, transparency, no corruption etc we have a deal seemingly turning sour over money....

Well who would of believed it!

The answer is anyone with an ounce of common sense.

Obviously we don't know the above is true as we have no information on any of the above....go figure.

All we know is that trillions were approved before seemingly money or funding was even discussed. Looking forward to the lads coming on to speak about 50 year debts etc like under the PTP and now justifying debt somehow..... with this new transp.....

OK I will bite ,

20 years is better than 50 for starters , at least the figures are under a budget and open to scrutiny ,not off budget. Do you honestly believe the above story would even see the light of day under PTP it would be just another G2G deal kept secret for national security, why ohh why do you guys jump on anything the present govt is trying to achieve , don't harp on about transparency or accountability the past Govt had neither .

Umm because the reason for the coup was for more accountability/transparency/less corruption.

We know nothing about this funding other than the news today, so maybe you can enlighten everyone? Is 20 years better than 50 is 20 years at 4% better than 50 years at 1%? at what rate? What happens if it does not make money? Whats the collateral?Umm we don't know!!!! which kind of proves the point.

What figures are open for scrutiny? We have a sound bite in the press, no idea if true or not, but which figures are you scrutinizing?

Thanks for providing.

The reason people jump on the bad wagon is because this Govt is doing everything the same the previous one was criticized for and ejected for with the reason of being better and more accountable.

[Ricardo]

In the new promised world of Thai accountability, transparency, no corruption etc we have a deal seemingly turning sour over money....

Well who would of believed it!

The answer is anyone with an ounce of common sense.

Obviously we don't know the above is true as we have no information on any of the above....go figure.

All we know is that trillions were approved before seemingly money or funding was even discussed. Looking forward to the lads coming on to speak about 50 year debts etc like under the PTP and now justifying debt somehow..... with this new transp.....

The PTP 50-year deal was a crock, now it looks as though this latest proposal might be too, in which case I for one would be equally happy to say that it should not then go ahead ... a bad deal is a bad deal, and no Thai government should try to ram a bad deal through. No Double Standards here !

Is that clear enough ?

"trillions were approved"

But have not yet been spent, so there's still time to call a halt. It's also good to see a Thai politician or bureaucrat sticking his head above the parapet, and saying it may be a bad deal, that's progress isn't it ?

[Ricardo]

Just to add that, if we did need to get into which plan is worth carrying through, my vote would be for the medium-speed freight-line which might make some sort of economic sense, rather than the high-speed passenger-only network proposed by the last administration, the lines to nowhere with the amazing lunch-boxes.

[stickyrice2000]

Well, I'll be darned. He should be impeached for negligence. LOL

[dinooz]

In the new promised world of Thai accountability, transparency, no corruption etc we have a deal seemingly turning sour over money....

Well who would of believed it!

The answer is anyone with an ounce of common sense.

Obviously we don't know the above is true as we have no information on any of the above....go figure.

All we know is that trillions were approved before seemingly money or funding was even discussed. Looking forward to the lads coming on to speak about 50 year debts etc like under the PTP and now justifying debt somehow..... with this new transp.....

OK I will bite ,

20 years is better than 50 for starters , at least the figures are under a budget and open to scrutiny ,not off budget. Do you honestly believe the above story would even see the light of day under PTP it would be just another G2G deal kept secret for national security, why ohh why do you guys jump on anything the present govt is trying to achieve , don't harp on about transparency or accountability the past Govt had neither .

Umm because the reason for the coup was for more accountability/transparency/less corruption.

We know nothing about this funding other than the news today, so maybe you can enlighten everyone? Is 20 years better than 50 is 20 years at 4% better than 50 years at 1%? at what rate? What happens if it does not make money? Whats the collateral?Umm we don't know!!!! which kind of proves the point.

What figures are open for scrutiny? We have a sound bite in the press, no idea if true or not, but which figures are you scrutinizing?

Thanks for providing.

The reason people jump on the bad wagon is because this Govt is doing everything the same the previous one was criticized for and ejected for with the reason of being better and more accountable.

How about you enlighten everyone with your 50 years at 1% pull that figure out of the air did we ? The populace would not be told what interest rate or terms on the 2.2 trillion Baht loan because it was off budget and not open to scrutiny. The proposed routes will be far more profitably than a high maintainence , high speed show pony,Thai rail has to learn how to walk before it runs.At least the bloody loan is in the budget, not some off budget boondoggie for PTP to enrich themselves , if you cant see the difference then so be it.

[rubl]

2014-07-30

"Transport Ministry permanent secretary Soithip Traisuth says the junta approved 741.46 billion baht ($23.3 billion) to build two high-speed train routes."

http://www.foxnews.com/world/2014/07/30/thai-junta-approves-budget-for-rail-upgrade-plans-high-speed-high-links-to/

2014-11-12

'Prayut said his government had plans to build many rail lines and China agreed to support the construction of routes from Bangkok to Nong Khai and from Bangkok to Map Ta Phut, as well as a sub-route from Kaeng Khoi to Map Ta Phut on the Eastern Seaboard."

http://www.nationmultimedia.com/business/Prayut-guarantees-transparency-of-rail-deal-with-C-30247542.html

2014-12-05

"The MoU, which should be signed soon after the NLA approves it, does not provide details about the investment and financial arrangements for the project. Prajin said the Finance Ministry was considering the financial side and would make a decision later on whether the project could be a joint venture in accordance with Thai laws."

http://www.chiangraitimes.com/sino-thai-rail-project-gets-green-light-from-thailands-national-legislative-assembly.html

2014-12-19

MoU signed

(sorry no quote, only found BangkokPost article)

2015-01-18

"Construction will be undertaken with Chinese supervision under the terms of a memorandum of understanding between the two governments signed in December 2014. Officials are reported to be assessing how far local contractors could participate ahead of a final project structure being signed off by the end of next month, Prajin said."

http://www.railwaygazette.com/news/news/asia/single-view/view/standard-gauge-line-construction-to-start-in-september.html

2015-01-28

The first phase of the project from BKK to Nakhon Ratchasima is at 170,450 Million Baht.

The second phase of the project from Nakhon Ratchasima to Nong Khai is at 108,245 Million Baht

See the Pracharat website (in Thai only!)

It would seem a lot of additional information is available, but mostly in Thai only. For some that doesn't help their understanding it would seem.

[konying]

Thailand is trying to pull the Greece

[greg71]

Didnt the so called current government offer soft loans to low income people at 34% to avoid loan sharks?.Suck it up prayut u knew the deal ,play with fire get burnt

[chooka]

Sooooo, somebody begins to see that all that glisters isn't gold--especially from China.

I think Thailand was acting like a bargirl. You so hansum China, my railway is broken can you give me some money? No more money, ok you not handsome anymore and I'II get a new boyfriend.

[Lite Beer]

Govt may tap funds locally for rail project
The Nation

BANGKOK: -- 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.

Source: http://www.nationmultimedia.com/business/Govt-may-tap-funds-locally-for-rail-project-30253616.html

-- The Nation 2015-02-07

[davehowden]

"If the negotiations [with China] do not succeed, we can borrow from local financial institutions as we have enough domestic liquidity for the project"

Wow, these local financial institutions must be pretty rich, why bother with China if you can sort the loan out at home I wonder?

[NongKhaiKid]

He said the ministry has also turned down Beijing’s demand to undertake the construction work as well as the system operation, saying that all the tasks would be the responsibility of the Thai government.

The ministry will learn a lot more things when dealing with the Chinese, but to start with, the Chines bring their own people, materials and machinery. They don't use anything from their host country.

And what is more, if they fail in their project, they just leave everything behind, including their people.

Maybe General Happiness could have some talks with some African governments before signing anything with the Chinese.

I was always taught to be cautious and LoS should be too but what's the bet they won't be.

[Strangebrew]

How come they don't demand it works for the taxi drivers? Now as far as repaying the loan they can steal that much rice over 20 years?

[Strangebrew]

Opps sorry confused I thought they were talking about Sky train.

[arthurboy]

Like so much 'news' from the junta's closed door committee meetings, I guarantee that this revalatory concern over funding is just smoke and mirrors.

Contradictory stories abound, regarding the state of Thailand's economic policy and development. Take a look at the various policy experts take on projected growth in 2015 or tourism numbers for this year as two examples of this obfuscation.

I defy anyone to have any clear idea on what is actually the situation here.

After the last few months of Prayuth's rhetorical huffing and puffing, and the junta's smoke and mirrors campaign, this deal with the Chinese has to be concluded.

Watch this space.

[NeilSA1]

I hope the Chinese tell them to take a hike!! They knew the conditions when they negotiated the deal!!!!

As per article - "the next round of negotiation which was scheduled for February 11-12 in Beijing"

[NeilSA1]

He said the ministry has also turned down Beijing’s demand to undertake the construction work as well as the system operation, saying that all the tasks would be the responsibility of the Thai government.

The ministry will learn a lot more things when dealing with the Chinese, but to start with, the Chines bring their own people, materials and machinery. They don't use anything from their host country.

And what is more, if they fail in their project, they just leave everything behind, including their people.

Maybe General Happiness could have some talks with some African governments before signing anything with the Chinese.

As per article - "He said the ministry has also turned down Beijing’s demand to undertake the construction work as well as the system operation, saying that all the tasks would be the responsibility of the Thai government."

[NeilSA1]

Sooooo, somebody begins to see that all that glisters isn't gold--especially from China.

.... and is prepared to ask "China to ease its loan conditions for the construction of Thailand’s first standard-gauge railway, reasoning that the proposed lending rate is too high when compared with rate offered by Japan."

[NeilSA1]

In the new promised world of Thai accountability, transparency, no corruption etc we have a deal seemingly turning sour over money....

Well who would of believed it!

The answer is anyone with an ounce of common sense.

Obviously we don't know the above is true as we have no information on any of the above....go figure.

All we know is that trillions were approved before seemingly money or funding was even discussed. Looking forward to the lads coming on to speak about 50 year debts etc like under the PTP and now justifying debt somehow..... with this new transp.....

As you said, anyone with an ounce of common sense would have to negotiate further, even if the deal turns sour. This is in line with accountability and transparency.

[Ricardo]

He said the ministry has also turned down Beijing’s demand to undertake the construction work as well as the system operation, saying that all the tasks would be the responsibility of the Thai government.

The ministry will learn a lot more things when dealing with the Chinese, but to start with, the Chines bring their own people, materials and machinery. They don't use anything from their host country.

And what is more, if they fail in their project, they just leave everything behind, including their people.

Maybe General Happiness could have some talks with some African governments before signing anything with the Chinese.

As per article - "He said the ministry has also turned down Beijing’s demand to undertake the construction work as well as the system operation, saying that all the tasks would be the responsibility of the Thai government."

One can only pray that this is just a negotiating-point, as the Thai government's record is hardly stellar, on projects like Swampy & Swampy-expansion, whereas the Chinese do at least make things happen.

Edited February 7, 2015 by Ricardo

[chainarong]

But ,but , Prayut - O - Cha has a Government to Government agreement , just what I thought the Prayth transparency, well done Sir, that's why you should have put all projects, not just the Rail projects, out for tender, you are getting what they call in the business slowly burned.

[ExPratt]

They are miles away from a formal contract. Will they go with a half arsed MOI and fight about it for decades later ?

[Commerce]

Dangerous ground to play off China against Japan. That's a huge insult, not an 888! Beware LoS...