Japan to Finance Thailand High Speed Rail as Contract Decision is Due March 19


Talks between the State Railway of Thailand (SRT) and Charoen Pokphand Group (CP Group) on March 19 will decide whether the consortium will develop a high-speed rail project linking three major airports, Deputy Transport Minister Pailin Chuchottaworn said.

Japan Bank for International Cooperation (JBIC) has confirmed it will finance the high-speed rail linking the three main airports and the Eastern Economic Corridor’s smart city in Chachoengsao.

The consortium submitted the lowest bid price for the rail project linking Don Mueang airport in Bangkok with Suvarnabhumi in Samut Prakan and U-tapao in Rayong.

Previous talks hit a dead end when the SRT rejected additional proposals raised by the consortium out of the terms of reference (ToR) for the bidding.

The rejection came at a meeting on Feb 22 of the SRT’s contractor selection committee, which said the proposals went against a cabinet resolution.

The SRT reportedly asked CP to come for further talks on Tuesday but the company asked to meet next Wednesday instead, since it needed to hold talks with investment partners. The committee later rescheduled the meeting for March 19.

“There will be no postponement of the March 19 talks unless there is some exceptional reason to do so,” said Mr Pailin.

He said he believed CP was still willing to take up the project.

“On that day, the selection committee will decide whether the project is to be run by CP, or not,” the minister said.

If the talks fail, another group would be asked to step into the breach, he added.

The minister was referring to the second-lowest bidder, BSR JV, which is made up of Bangkok Mass Transit System Plc (BTS), Sino-Thai Engineering and Construction Plc, and Ratchaburi Electricity Generating Holding Plc.

Mr Pailin said he expected a deal to be struck this month in line with the parameters set out by Deputy Prime Minister Somkid Jatusripitak.

He said he told Japan Bank for International Cooperation (JBIC) governor Tadashi Maeda, who he met last Thursday, that talks with CP would conclude soon.

JBIC is the financier of the project and one of the consortium partners, which also include Bangkok Expressway and Metro Plc, China Railway Construction Corporation Ltd, Ch Karnchang Plc, and Italian-Thai Development Plc.

Meanwhile,Japan Bank for International Cooperation (JBIC) has confirmed it will finance the high-speed rail linking the three main airports and the Eastern Economic Corridor’s smart city in Chachoengsao.

JBIC governor Tadashi Maeda, who met Prime Minister Prayut Chan-o-cha on Thursday, and Deputy Prime Minister Somkid Jatusripitak said JBIC is ready to extend soft loans for the 224.54-billion-baht high-speed railway linking Don Mueang airport in Bangkok with Suvarnabhumi in Samut Prakan and U-tapao in the eastern province of Rayong.

According to Mr Somkid, the Japanese bank also confirmed support for investment in the Chachoengsao smart city.

JBIC has already conducted a “smart city evaluation framework” of policies and incentives that potentially attract Japanese companies, Mr Maeda said.

Maj Gen Weerachon Sukondhapatipak, the government’s deputy spokesman, cited Mr Maeda as saying JBIC’s support to be given to the high-speed rail linking the three airports will be an example project of investment cooperation between the private sectors of Japan and China in a third country.

Mr Somkid also updated Mr Maeda, saying that the contractor selection committee of the State Railway of Thailand (SRT) is scheduled to settle talks with the CP-led consortium, which submitted the lowest quote for the construction work, on March 19.

The SRT postponed talks with the CP-led consortium on Wednesday because some members of its contractor selection committee were on “business leave”.

The talks had already been delayed after CP said it was not ready after the committee rejected its 12 proposed changes to the original conditions of the 224-billion-baht project.

If the contractual negotiations with CP prove unsuccessful, BSR Joint Venture, the second-lowest bidder, will be called in.

SRT deputy governor Worawut Mala insisted earlier that the agency would be able to sign a contract this month.

According to Mr Somkid, Mr Maeda told Gen Prayut that the leaders of Japan and China agreed that the government’s flagship Eastern Economic Corridor will be instrumental in driving not only Thailand’s future economy, but also Asean’s.

JBIC also yesterday highlighted its role in supporting Japanese small and medium-sized enterprises (SMEs) operating in Thailand.

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