Thai Cabinet agrees to seek Japanese funds for Red Line project

[webfact]

Cabinet agrees to seek Japanese funds for Red Line project



BANGKOK, 10 June 2015 (NNT) – The Cabinet has approved a plan to borrow 10 billion baht from Japan to fund the second phase of the Red Line electric train project on the Bang Sue-Rangsit section.

According to Deputy Government Spokesperson Maj Gen Sansern Kaewkamnerd, the Cabinet this week gave the green light to a draft loan agreement proposed by the Ministry of Finance which is to be signed between the Thai government and the Japan International Cooperation Agency (JICA).

Under the deal, the Finance Ministry will be responsible for obtaining a loan worth 10 billion baht from JICA and disbursing it to the State Railway of Thailand for use in the construction of the Red Line electric train system, stretching between Bang Sue and Rangsit.

Maj Gen Sansern affirmed that the loan is necessary as it will enable the government to keep up with the goal of enhancing the country’s public transport system and laying down infrastructure in support of urban community development.

Another amount of 22.78 billion baht has also been borrowed from JICA in 2009 for the first phase of the project and the loan period is due to end this month. For the second phase, the 10-billion-baht loan will have a period of 20 years, with an interest rate of 0.4 percent and an interest-free period of six years.


-- NNT 2015-06-10

[Soutpeel]

Maybe they should approach the Germans ?

I thought every country under the sun was chomping at the bit to invest in Thai infrastructure projects, why a loan ?

[webfact]

CABINET APPROVED
Finance Ministry gets nod to seek loan from JICA
Erich Parpart
The Nation

BANGKOK: -- The cabinet has granted permission to the Finance Ministry to secure another 38.203-billion Japanese yen (around Bt10 billion) loan from the Japan International Cooperation Agency (JICA) in order to continue with the construction of the second phase of the Bang Sue-Rangsit suburban route.

The 26-kilometre line is part of the State Railway of Thailand (SRT)'s Red Line Mass Transit System Project.

The Japanese government gave the nod to JICA to provide the loan on February 10, 2015.

The Red Line project consists of two lines - the Dark Red Line from Thammasat University's Rangsit campus to Maha Chai in Samut Sakhon province, and the Light Red Line, which runs from Sala Ya in Nakhon Pathom province to Hua Mark in Bangkok.

Both the Red Line routes will pass central Bang Sue railway station, which will act as a connecting hub to the Mass Rapid Transit system. The Bang Sue-Rangsit stretch, whose construction began in 2013, is the first phase of the Dark Red Line.

" The central Bang Sue station will be converted into Bang Sue Grand Station to serve as a transport hub that connects railway transportation from the North and from Isan [Northeast]. It would later connect with railways from the East and the South as well," Deputy Government spokesman Sansern Kaewkamnerd told the press after yesterday's Cabinet meeting.

The Thai government had earlier secured around 63.018 billion yen in 2009 for the construction of the first phase of the Bang Sue-Rangsit stretch. Around 59.388 billion yen has already been disbursed, which prompted the process to secure the second round of loan from JICA in order to continue with the construction, he explained.

Infrastructure contractor Italian-Thai Development signed a Bt21.24-billion contract on January 31, 2013, covering the construction of 20.2 kilometres of railway above the existing SRT alignment, six elevated stations at Bang Khen, Thung Song Hong, Lak Si, Kan Kheha, Don Muang and Rangsit, and associated road and drainage works. The construction work is expected to be completed within this year.

The SRT also awarded a Bt28.8-billion contract on January 18, 2013, to the 60:40 joint venture of Sino-Thai Engineering & Construction and Unique Engineering & Construction, for building the Bang Sue Grand Station and the 6.2-km elevated railway.

Sansern revealed that the interest rate for the new 38.203-billion yen loan from JICA will be set at 0.40 per cent per year and the period for the loan is 20 years with a six-year grace period. The SRT will secure the loan in baht from the Finance Ministry. The front-end fee for JICA is set at 0.20 per cent and the one-time payment will be made 60 days after the loan is secured.

Meanwhile, Transport Minister Air Chief Marshal Prajin Juntong has revealed that the new structure of the Department of Civil Aviation, covering short-, mid- and long-term strategies, will be presented to the Cabinet at next week's meeting.

Prajin also revealed that the ministry is currently contemplating increasing the airport taxi fee from the current Bt50 to Bt75 for small taxis and Bt95 for bigger taxi as requested by taxi operators but did not reveal any other details.

The Cabinet also approved the Finance Ministry's proposal to reappoint Ampon Kittiampon as Bank of Thailand chairman for another term.

Source: http://www.nationmultimedia.com/business/Finance-Ministry-gets-nod-to-seek-loan-from-JICA-30261967.html


-- The Nation 2015-06-10

[halloween]

Maybe they should approach the Germans ?

I thought every country under the sun was chomping at the bit to invest in Thai infrastructure projects, why a loan ?

Looking at the interest terms, it seems that a loan might be cheaper.

[Robby nz]

Maybe they should approach the Germans ?

I thought every country under the sun was chomping at the bit to invest in Thai infrastructure projects, why a loan ?

Depends I suppose how you see an investment, those making the loan could well consider it a financial investment much the same as if you or I put money into a term deposit in a bank as an investment. Or if you see an investment as some sort of a partnership. Or even a full contract with control of the finished project.

[Crossy]

Maybe they should approach the Germans ?

I thought every country under the sun was chomping at the bit to invest in Thai infrastructure projects, why a loan ?

The Germans got bitten when they financed the road that runs next to the Red Line.

[JOC]

Maybe they should approach the Germans ?

I thought every country under the sun was chomping at the bit to invest in Thai infrastructure projects, why a loan ?

The Germans got bitten when they financed the road that runs next to the Red Line.

But remember how quickly the Germans (finally) got paid, when they impounded a certain airplane??

[Srikcir]

Maybe they should approach the Germans ?

I thought every country under the sun was chomping at the bit to invest in Thai infrastructure projects, why a loan ?

Looking at the interest terms, it seems that a loan might be cheaper.

Depending on undisclosed terms of the loan agreement, the effective interest rate might be much higher.

The cost of technology and materials might be inflated.

Japanese investors might receive commercial development rights along the rights of way.

There may also be auxilliary agreements not directly related the the rail projects that provide hidden benefits to Japanse investors.

[rubl]

Maybe they should approach the Germans ?

I thought every country under the sun was chomping at the bit to invest in Thai infrastructure projects, why a loan ?

Looking at the interest terms, it seems that a loan might be cheaper.

Depending on undisclosed terms of the loan agreement, the effective interest rate might be much higher.

The cost of technology and materials might be inflated.

Japanese investors might receive commercial development rights along the rights of way.

There may also be auxilliary agreements not directly related the the rail projects that provide hidden benefits to Japanse investors.

Three 'might's and one 'may'. You're pretty sure of yourself, as if you have sufficient information to stick out your neck and state 'might' or 'may'.