BANGKOK – Thailand will no longer seek Chinaâ€™s financial backing for a high-speed rail line connecting Bangkok to the provincial hub of Nakhon Ratchasima, opting to finance the project on its own, its transport minister said Friday.
Thailand has been struggling to secure what it considers a satisfactory financing deal from Beijing for the 250 kilometer (155 mile) rail line, seen as part of a broader network running from southern China through Laos, and south through Thailand and Malaysia to Singapore.
The main bone of contention was the interest rate at which China was offering to finance the deal, along with the total investment cost. Transport Minister Arkhom Termpittayapaisith said at a news conference that since the approximately $5 billion project is a venture between governments, China should have offered a loan at what he described as a â€œfriendly rate that takes into consideration relations between China and Thailand.â€
Thai Prime Minister Gen. Prayuth Chan-ocha said earlier this week during a visit to China that Thailand would finance the project itself after failing to agree on terms with Beijing. Gen. Prayuth said on Thursday evening that he had informed Chinaâ€™s Premier Li Keqiang of Thailandâ€™s decision, and that Beijing had accepted Thailandâ€™s decision.
Since a military coup in 2014, Thailandâ€™s military-installed junta has been trying to develop stronger relations with China after the U.S. and European countries criticized the putsch. Among other things, Thailand in 2015 returned to China around 100 ethnic-Uighur Muslim refugees from Xinjiang in western China who were attempting to make their way to Malaysia and then on to Turkey.
The construction of the train line now wonâ€™t begin until the end of the year, Mr. Arkhom said, several months later than the planned launch of the project in May.
He said Thailand still plans to work with China on construction of the line, which is part of a longer 873 kilometer rail link from the Thai industrial seaport of Laem Chabang to Thailandâ€™s border with Laos. He said Thailand still plans to obtain Chinese-made trains and will contract Chinese engineers to build the line.
Mr. Arkhom and China are now discussing the cost of the line to Nakhon Ratchasima. Thailand wants to limit the budget to 170 billion baht ($4.81 billion), while China has suggested the final outlay would be 190 billion baht.