Thais backtrack on Chinese rail deal

Chinese trains are becoming a key aspect of Beijing’s diplomatic strategy. Source: Public Domain Pictures

Thailand will no longer seek Chinese financial backing for a high-speed rail line linking Bangkok to the eastern city of Nakhon Ratchasima, opting to finance the scheme domestically, Transport Minister Arkhom Termpittayapaisith told the media.

The Thai junta has not managed to secure what it considered an adequate financing deal with Beijing for the 250km link. It is part of the Beijing’s wider rail strategy that would see southwest China linked to Laos, Thailand and Malaysia and eventually Singapore.

The interest rate offered by China was a sticking point along with the total investment cost. Arkhom told the media that the US$5 billion project was a joint venture between Beijing and Bangkok, and the Chinese should have offered a “friendly rate that takes into consideration relations between China and Thailand”.

Thailand asked to take a 60-per-cent stake in the project, citing the benefits to Beijing from the track’s position as part of a planned transport route between Kunming in southern China and Singapore, but the Chinese rejected the request. The Chinese insistence on securing the development rights along the railway was a contentious factor as well.

Thailand’s Prime Minister General Prayuth Chan-ocha said during a visit last week to China his government would finance the project itself after failing to agree on terms with Beijing.

It was planned that the route was due to be completed by 2020 and travel at around 180kph.

Thailand’s junta has been trying to strengthen ties with Beijing after its traditional ally, the US, and the EU criticised the coup. Around 100 ethnic-Uighur Muslim asylum seekers from Xinjiang in western China, who were attempting to reach Malaysia and then Turkey, were returned to the Chinese authorities last year.

Construction work would start on the railway at the end of the year, Arkhom said, although it was due to start in May.

He said Thailand planned to work with the Chinese on the 873km track from port of Laem Chabang southeast of Bangkok to the Lao border. The route would use Chinese-made trains and Chinese engineers would be contracted to complete the construction, he said.

The Thais want to limit the budget to 170 billion baht (US$4.81 billion), while China says the final outlay would be around 190 billion baht.