Ms. Jindarat Wiriyathaveekul, Director of the Policy and Planning Office at the Public Debt Management Office (PDMO), addressed concerns regarding borrowing from China for the high-speed rail development project aimed at connecting the region, specifically the Bangkok-Nong Khai route (Phase 1: Bangkok – Nakhon Ratchasima). She assured that Thailand is fully funding the project independently and is not co-investing with China, thus making Thailand the sole host of the project. China is only providing high-speed rail technology services to Thailand.

 

Currently, the Ministry of Finance has already borrowed domestically for part of the infrastructure construction and is in the process of considering foreign loan sources for expenses that require foreign currency. There has been no binding loan agreement with the Export-Import Bank of China (CEXIM) or any other foreign lenders. Therefore, concerns can be alleviated as the Ministry of Finance is seeking funding sources with the most favorable terms and costs for the project.

 

“The high-speed rail development project is in accordance with the framework of cooperation between the Government of the Kingdom of Thailand and the Government of the People's Republic of China regarding the strengthening of cooperation in railway infrastructure development (Framework of Cooperation: FOC) under Thailand's transportation infrastructure development strategy for 2015-2022.” Both parties have agreed in principle that the funding sources for the project will come from various sources, including the Thai government's budget, domestic loans, and other loan sources, with the condition that the terms and conditions of the Chinese loans must be the most favorable compared to other sources,” Ms. Jindarat stated.
Ms. Jindarat further mentioned that the Cabinet has approved the Budget Bureau and the Ministry of Finance to consider sourcing funds for the project, with a total investment budget of 179 billion baht, comprising 13.2 billion baht from the budget and 166 billion baht from loans. Most of this will be domestic loans to hire local contractors for infrastructure construction, amounting to 127 billion baht, which is 80% of the loans, while foreign loans will be used for necessary items requiring foreign technology and paid in foreign currency, such as electrical and mechanical systems, train procurement, track laying, and personnel training, estimated at around 38.5 billion baht.

 

Thus, the Ministry of Finance believes in keeping options open for sourcing loans from both domestic and foreign sources to benefit the State Railway of Thailand (SRT) as much as possible. To date, 4 billion baht has been borrowed domestically, with 2 billion baht already disbursed.

 

However, regarding concerns about investment value and the ability to repay debts to the extent of losing project ownership to China, it has been confirmed that the National Economic and Social Development Council (NESDC) has analyzed the project and its economic and financial returns. The railway route is strategic for enhancing Thailand's economic potential and opportunities, supporting Thailand's role as a transportation and logistics hub, and connecting rail transport with neighboring countries. The analysis considered broader economic and social returns rather than just financial returns.

 

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