Thailand approves design contract for rail project with China

[webfact]

Thailand approves design contract for rail project with China

 

NAKHON RATCHASIMA (Reuters) - Thailand's cabinet on Tuesday approved a draft contract for a detailed plan on the design and construction of the first phase of the country's high-speed railway project with China.

 

The 250-km (155 mile) high-speed rail line will link the Thai capital of Bangkok and the northeastern province of Nakhon Ratchasima and is scheduled to be operational by 2021.

 

It is part of China's controversial Belt and Road initiative, which aims to build a modern-day "Silk Road" connecting the world's second-largest economy by land corridors to Southeast Asia, Pakistan and Central Asia and maritime routes opening up trade with the Middle East and Europe.

 

"The State Railway of Thailand will use this contract to hire China's experience state enterprise which will be responsible for the detailed engineering design of the project, which will include elevated tracks, tunnels, bridges, and stations," Kobsak Pootrakool, vice minister at the Prime Minister's Office, told reporters.

 

"The planning phase will take 10 months and have the financial ceiling of 1.7 billion baht," Kobsak said.

 

The Thai government is planning to approve another contract that covers supervision expenses.

 

Prime Minister Prayut Chan-ocha plans to officially sign these two contracts with his Chinese counterpart when he visits China on Sept. 4-5.

 

The construction of the first phase of the $5.5-billion (4.28 billion pounds) Thai-Chinese rail project was approved by the Thai government in July.

 

The project, which is seen by observers as a centerpiece of China-Thailand relations, has been hit by delays over details including construction funding and technical assistance.

 

China and Malaysia broke ground this month on a $13 billion rail project linking peninsular Malaysia's east and west.

 

(Reporting by Panu Wongcha-um; Editing by Nick Macfie)

 

-- © Copyright Reuters 2017-08-23

[Ricardo]

But how will it be funded, and what will the interest-rate be, the question becomes increasingly pressing ?

 

 

" China and Malaysia broke ground this month on a $13 billion rail project linking peninsular Malaysia's east and west. "

 

But wouldn't that make the Kra-Canal project irrelevant ?  By by-passing it ?

 

http://www.straitstimes.com/asia/se-asia/malaysias-east-coast-rail-line-touted-as-a-game-changer

[trainman34014]

The planning will take 10 months from signing this September yet it will be 'operational' by 2021.... 250 klicks with all those elevated sections, bridges, tunnels, overhead catenary system etc etc, not to mention testing, training et al.     This really is the Land of Dreamers !

[Cadbury]

1 hour ago, trainman34014 said:

The planning will take 10 months from signing this September yet it will be 'operational' by 2021.... 250 klicks with all those elevated sections, bridges, tunnels, overhead catenary system etc etc, not to mention testing, training et al.     This really is the Land of Dreamers !

And the highly skilled Thai railway engineers will have to assess and certify the Chinese rail engineers to make sure they are qualified to do their jobs properly. All that takes time and money.

But being Thailand they waste no time in setting the price of the ticket and are in all probability now sitting back and mentally dreaming about the money coming in and planning who gets what. 

 

[Cadbury]

4 hours ago, Ricardo said:

But how will it be funded, and what will the interest-rate be, the question becomes increasingly pressing

In normal business practice that would be so. But in Thailand the priority is that the PM appears to be a man-of-action and a decisive leader so as to advance his own feelings of self- importance.

[Godang]

Throws Yinglucks rice scheme into the small fry bin.

[Srikcir]

7 hours ago, webfact said:

"The planning phase will take 10 months and have the financial ceiling of 1.7 billion baht,"

I think that's a misprint, s/b 170 billion baht that is the limit for a loan arrangement. The total cost of the first section is estimated at 179 billion baht.

[Srikcir]

6 hours ago, Ricardo said:

But how will it be funded, and what will the interest-rate be, the question becomes increasingly pressing ?

Funded with a loan by the Chinese up to a limit of 170 billion baht and an "agreed interest rate." The rate hasn't been disclosed. 

The Chinese were asking 2.9% with loan default remedies such as the right to seize Thai State resources. The Transportation Minister wanted less than 2%. Guess we'll know when China and Thailand sign the contract in September.