Thailand hopes to reach loan terms for 800-km joint venture rail project with China this month

[webfact]

Thailand hopes to reach loan terms for 800-km joint venture rail project with China this month



BANGKOK: -- The Ministry of Transport will meet the Chinese government for the eighth time next week in Beijing to finalise the planned 800-kilometre long joint venture Thai-Chinese rail project.

The ministry’s senior officials held high hope that this round of meeting will reach conclusion on loan terms as well as all details concerning the joint venture project.

Deputy transport minister Ormsin Chiwapruek said yesterday that from October 27- 29 of this month, the transport minister will be leading a committee to Beijing to hold talks with Chinese authorities regarding the joint Thai-Chinese rail project.

He said this meeting will be the eighth of such talks and will finalize all the details involved in the planned Nong Khai – Bangkok – Map Taphut rail project.

Preliminary on-site surveys have been carried out by the Chinese officials and the meeting hopes to finally conclude interest rates for the loan that the Chinese government will be granting to Thailand.

Mr Ormsin explained that this point has been the major stumbling block in past negotiations.

The Chinese government had earlier proposed a rate of 2.5% but Thai officials felt that that was too high and proposed a rate not exceeding 2%. Should this round of talks succeed then it is expected that a signing will be planned in the near future, he said.

The Ministry of Transport has set a target for the Thai-Chinese rail project to begin in December of this year. If things go to plan, the construction of the 800 km stretch of the two planned lines from Bangkok – Kaeng Khoi – Nakhon Ratchasima – Nong Khai and from Kaeng Khoi – Map Taphut will begin with the construction of the Chiang Rark Noi station in Ayutthaya province.

Source: http://englishnews.thaipbs.or.th/thailand-hopes-to-reach-loan-terms-for-800-km-joint-venture-rail-project-with-china-this-month

-- Thai PBS 2015-10-24

[DLock]

http://www.thaivisa.com/forum/topic/785047-thailand-and-china-to-sign-dual-railway-tracks-agreement-friday/

So the signing last December and "hopes" to start in January this year were all lies?

This is the 8th meeting on trying to come to "agree" on interest rates?

Remember the golden rule...he with the gold makes the rules. The Chinese have the money...they make the interest rates.

Tards.

[Hawk]

Thailand getting itself into unpayable debt.

Or selling off the country.

[TheCruncher]

So I doubt the rail lines will be completed by the end of next year as previously stated, and for sure they are not ahead of schedule as also previously announced.

[clockman]

Thailand is a chinese colony!

[trainman34014]

These people live in a complete dream world. Even if interest rates are agreed, the original amount they planned to borrow is now nowhere near enough as costs are rising with every minute that passes. The intended start date is mythical and is covered by....' if things go to plan'.

'Preliminary' on site surveys don't cut the mustard and when full scale surveys start it will become a whole different ball game, especially where costings are concerned.

All in all this is more bullshit to add to what they have already piled up previously, so don't expect to see any finished projects for at least a decade....if ever.

[aguy30]

Maybe China is already building the prototype based on an earlier Trojan horse design.

Edited October 24, 2015 by aguy30

[waldroj]

According to the broadcaster you can trust, if things go to plan, the construction of the 800 km stretch will begin with the construction of the Chiang Rark Noi station!

Needless to say, the media will soon be reporting that the completed station is fully operational, with a large staff working round the clock.

Long before it ever sees its first tracks it will probably win an efficiency award for never having a late train.

[Nice Boyd]

China's Southern Province Thailand will begin construction of an 800k train...........

[Praematura]

There is no negotiation hence the word "hopes" to negotiate. The generals are up in China every week and PM painted Thailand into a corner by eliminating democracy. Thailand is going to be hit with sanctions soon. Article should read "Thailand grovels for loan terms."

[phoenixdoglover]

I see the sheep are visiting the shearer.

[rubl]

Wouldn't it be nice if the government could just pay for the 800 km link from petty cash?

Of course, that would mean it to be much more difficult to make nasty 'humorous' remarks.

[phoenixdoglover]

Wouldn't it be nice if the government could just pay for the 800 km link from petty cash?

Of course, that would mean it to be much more difficult to make nasty 'humorous' remarks.

The fact is, there isn't nearly enough information in the public domain to make a judgement about the cost/benefit of this rail project.

In my book, that is sufficient cause for skepticism.

Feel free to contribute your own opinions regarding the public utility of this project. Don't forget about opportunity costs.

[Srikcir]

In the September 11-12 meeting, it was mentioned that the project costs more than the ministry’s estimate by 20-30%. And the calculation of expense and income as well as the construction plan had yet to be completed.

These issues are as important as negotiating a reasonable interest rate but they are no longer mentioned. Either they too are still unresolved or the government has simply conceded those issues; there's no one to hold the Prayut government accountable if it did.

[EJK]

I lost all faith in this government and no longer believe 1word even in THAINESS

[aslimversgwm]

Well put Sanuk711. I'm still looking forward to my 1st journey on a Chinese built train and railway in the near future. It will happen and well within a decade for sure. It will be one of the greatest gains for the Thai economy ever in my ever so humble opinion.

[Eric Loh]

So this is an off budget loan. Last I read, the constitutional court ruled against off budget loan of lesser amount.

[optad]

Never to old to learn, said the luddite.

[metisdead]

An off topic post has been removed as well as the replies.

[Muhendis]

A joint venture (JV) is a business agreement in which the parties agree to develop, for a finite time, a new entity and new assets by contributing equity. They exercise control over the enterprise and consequently share revenues, expenses and assets.

Wikileaks

​So why does Thailand need to borrow from its joint venture partner?

It's not a joint venture at all. It's a Chinese train set for the benefit of China.

I vote they should pay for what they want in its entirety.

[mgjackson69]

"loan terms" ???

Wasn't this supposed to be some gift to Thailand to slap USA in the face?

This is the Thai way I guess..."loan" = "something we can never pay back and never intend to pay back"

[rubl]

Wouldn't it be nice if the government could just pay for the 800 km link from petty cash?

Of course, that would mean it to be much more difficult to make nasty 'humorous' remarks.

The fact is, there isn't nearly enough information in the public domain to make a judgement about the cost/benefit of this rail project.

In my book, that is sufficient cause for skepticism.

Feel free to contribute your own opinions regarding the public utility of this project. Don't forget about opportunity costs.

Absolutely.

BTW where were you when a minister of the previous government justified the (real) highspeed link between ChiangMai to Bangkok with "many poor commuters waiting for it" and the PM herself designing the lunchboxes?

It would seem that many would like a good infrastructure (like dual track higher-speed (aka lower than high speed) links to open up the NorthEast so it too can profit from economical interest and expansion. That would mean the government has to invest initially in this infrastructure project and the willingness of the Chinese to finance the project with a multi-year loan makes it affordable. More so than a 2.2 trillion Baht loan now for ''possible', future' plans.

[rubl]

So this is an off budget loan. Last I read, the constitutional court ruled against off budget loan of lesser amount.

You probably missed that the current government planned for seven yearly installments and have reservations in the National Budget. Look it up. Here the Fiscal 2015 National Budget, the Fiscal 2016 (2015/2016) may soon come in English.

http://www.bb.go.th/budget_book/e-Book2558/PDF/Budget-in-Brief-2015.pdf

Here all of the budget books available, only the one I indicated in English though.

http://www.bb.go.th/budget_book/e-Book2558/

Edited October 25, 2015 by rubl

[aussieinthailand]

http://www.thaivisa.com/forum/topic/785047-thailand-and-china-to-sign-dual-railway-tracks-agreement-friday/

So the signing last December and "hopes" to start in January this year were all lies?

This is the 8th meeting on trying to come to "agree" on interest rates?

Remember the golden rule...he with the gold makes the rules. The Chinese have the money...they make the interest rates.

Tards.

Unfortunately there's a bit more to it than just interest rates. there will be all kinds of little surprises that have not yet come to ligt for the Thai people I suspect.

Anyone remember the budget for this project by the last gov't? and then compare them apples for apples, think there may be a little difference there???

Anyone know the safety states on Chinese fast trains v's Japans bullet trains? I've been on Japans trains and very happy except for the local peak time ones where yu'p for real sadeinzzz in a can man, but have to try the Chinese one soon. hope they're better than baby's milk in China, or fake eggs, n cardboard pork steamed buns?

Edited October 25, 2015 by aussieinthailand

[rodknock]

i hope they take into consideration all the stuffed brown bags that will be changing hands!!

some where along the line they will run out of money for construction, as they did not allow enough in the loan for all the pay-offs!!

oh, how the excuses will flow!!

just more of the dog and pony show in large $$$$$$.

[EnglishJohn]

So this is an off budget loan. Last I read, the constitutional court ruled against off budget loan of lesser amount.

No mention of that in the article. What is your source ?.

But regardless, the key point which must have gone right over your head is that this is a loan against a specific budget for an agreed project.

The one by the dirty cronies had no plan or any costings. They just wanted to take as big a loan as possible and keep it off-budget for 'allocation' later. The first chunk was very likely to be shoring up the bankrupt rice scheme.

A world of difference.

[phoenixdoglover]

Wouldn't it be nice if the government could just pay for the 800 km link from petty cash?

Of course, that would mean it to be much more difficult to make nasty 'humorous' remarks.

The fact is, there isn't nearly enough information in the public domain to make a judgement about the cost/benefit of this rail project.

In my book, that is sufficient cause for skepticism.

Feel free to contribute your own opinions regarding the public utility of this project. Don't forget about opportunity costs.

Absolutely.

BTW where were you when a minister of the previous government justified the (real) highspeed link between ChiangMai to Bangkok with "many poor commuters waiting for it" and the PM herself designing the lunchboxes?

It would seem that many would like a good infrastructure (like dual track higher-speed (aka lower than high speed) links to open up the NorthEast so it too can profit from economical interest and expansion. That would mean the government has to invest initially in this infrastructure project and the willingness of the Chinese to finance the project with a multi-year loan makes it affordable. More so than a 2.2 trillion Baht loan now for ''possible', future' plans.

Let me put a little historical perspective on these railway plans in Thailand. Most of these long distance links have been envisioned 20 years or more. Back when they were originally planned, the links focused on combined passenger and freight service at conventional speeds. At that time, SRT had a fairly robust ridership, and the shift to automobiles (and regional air) was only starting. Fast forward to 2015, and the conditions have changed dramatically. The SRT ridership has fallen precipitously, and auto/air traffic is way up. It is quite likely that new passenger service won't compete effectively on the long distance passenger routes. Thus the new lines should be focused primarily on freight, and they should be designed for conventional speeds.

In contrast, the historical evolution of mass transit in Bangkok is almost the opposite. Light rail was non-existent, and is now an important part of the mix; possibly crucial to solving many transport and environmental problems in the city. The plans for light rail expansion make a lot of sense, and decent ridership is almost assured (although the overall financial picture is not so obvious).

Maybe the planners have taken this all into consideration; but I am highly skeptical. Instead, I think the high speed rail ideas are potentially outdated.

That leaves us with questions of motivation. China's motivation is clear: get a freight rail link from Kunming, through Laos, and to (and through) Thailand for shipping their goods, and get the Thai government to pay for the Thai section. This should work out well for them. Thailand benefits would be marginally cheaper Chinese goods, the ability to back-ship rubber and rice, and some rail revenue. On the downside will be maintenance and replacement costs far exceeding their current levels. Maybe it's a good deal. I would love to see the ROI calculation, though.

Edited October 25, 2015 by phoenixdoglover

[rubl]

Wouldn't it be nice if the government could just pay for the 800 km link from petty cash?

Of course, that would mean it to be much more difficult to make nasty 'humorous' remarks.

The fact is, there isn't nearly enough information in the public domain to make a judgement about the cost/benefit of this rail project.

In my book, that is sufficient cause for skepticism.

Feel free to contribute your own opinions regarding the public utility of this project. Don't forget about opportunity costs.

Absolutely.

BTW where were you when a minister of the previous government justified the (real) highspeed link between ChiangMai to Bangkok with "many poor commuters waiting for it" and the PM herself designing the lunchboxes?

It would seem that many would like a good infrastructure (like dual track higher-speed (aka lower than high speed) links to open up the NorthEast so it too can profit from economical interest and expansion. That would mean the government has to invest initially in this infrastructure project and the willingness of the Chinese to finance the project with a multi-year loan makes it affordable. More so than a 2.2 trillion Baht loan now for ''possible', future' plans.

Let me put a little historical perspective on these railway plans in Thailand. Most of these long distance links have been envisioned 20 years or more. Back when they were originally planned, the links focused on combined passenger and freight service at conventional speeds. At that time, SRT had a fairly robust ridership, and the shift to automobiles (and regional air) was only starting. Fast forward to 2015, and the conditions have changed dramatically. The SRT ridership has fallen precipitously, and auto/air traffic is way up. It is quite likely that new passenger service won't compete effectively on the long distance passenger routes. Thus the new lines should be focused primarily on freight, and they should be designed for conventional speeds.

In contrast, the historical evolution of mass transit in Bangkok is almost the opposite. Light rail was non-existent, and is now an important part of the mix; possibly crucial to solving many transport and environmental problems in the city. The plans for light rail expansion make a lot of sense, and decent ridership is almost assured (although the overall financial picture is not so obvious).

Maybe the planners have taken this all into consideration; but I am highly skeptical. Instead, I think the high speed rail ideas are potentially outdated.

That leaves us with questions of motivation. China's motivation is clear: get a freight rail link from Kunming, through Laos, and to (and through) Thailand for shipping their goods, and get the Thai government to pay for the Thai section. This should work out well for them. Thailand benefits would be marginally cheaper Chinese goods, the ability to back-ship rubber and rice, and some rail revenue. On the downside will be maintenance and replacement costs far exceeding their current levels. Maybe it's a good deal. I would love to see the ROI calculation, though.

So, now we have plans for dual-track 160 km/h speed links. That seems to fit both passenger traffic AND freight service. Previous plans for BKK-CHM was only a dual-track HIGH speed passenger service. Now you may ask about Roi again.

As for the ROI for the NK-BKK-MTP link, well, when we can agree upon the need to open up the NorthEast and needing infrastructure for that, we should also be realistic enough to accept government involvement. Certainly at first there would be limited ROI and intra-Thailand passenger service would depend on the ticket prices. Lots of commuters from Isaan to Bangkok but how much are they willing / able to pay for a ticket? Freight traffic depends on the produce in Isaan and price setting. I guess perishable goods might profit from high-speed freight links and could be cheaper than airfreight. Being 'accessable' would already help attract both Thai and Foreign companies to the region. Of course some seem to think foreign companies would only like to sell in the populous region rather than produce things. In that case keep it locked up and poor.

With or without a link into Laos/China the dual-track link should be profitable for the NorthEast as region,

[Eric Loh]

So this is an off budget loan. Last I read, the constitutional court ruled against off budget loan of lesser amount.

You probably missed that the current government planned for seven yearly installments and have reservations in the National Budget. Look it up. Here the Fiscal 2015 National Budget, the Fiscal 2016 (2015/2016) may soon come in English.

http://www.bb.go.th/budget_book/e-Book2558/PDF/Budget-in-Brief-2015.pdf

Here all of the budget books available, only the one I indicated in English though.

http://www.bb.go.th/budget_book/e-Book2558/

My dear Rubi, please tell why would you find in the budget for the extra infrastructure funding when you already have a budget deficit. The infrastructure allocation in the 2015 budget is a yearly expenditures for repairs and maintenance and not the big 3 Trillion Baht project which will be fully funded by loans or bonds. You really think we have the budget to pay the humongous loan in 7 years plus interest when the yearly budget is only about 2.5 T Baht and all the allocations are vital resources for the country. Do your math.

[Eric Loh]

So this is an off budget loan. Last I read, the constitutional court ruled against off budget loan of lesser amount.

No mention of that in the article. What is your source ?.

But regardless, the key point which must have gone right over your head is that this is a loan against a specific budget for an agreed project.

The one by the dirty cronies had no plan or any costings. They just wanted to take as big a loan as possible and keep it off-budget for 'allocation' later. The first chunk was very likely to be shoring up the bankrupt rice scheme.

A world of difference.

What specific budget you talking about? If you read first before letting out another emotional outburst, you can see that the project amount has yet to be determined. So here we have a loan first and the total construction cost of the whole project to be determined later. And that size of loan can be allocated in the budget already in deficit? So which resource allocation you think will be off loaded to accommodate the infrastructure loan.