Thai-Chinese high-speed rail opened up to foreign finance

The government has allowed the Thai-Chinese high-speed railway planned from Bangkok to Nong Khai to secure funding from overseas financial institutions, instead of from only domestic ones as earlier stipulated.

Nathporn Chatusripitak, an adviser to the Prime Minister's Office Minister, said the cabinet yesterday approved a proposal from the Finance Ministry to allow the ministry to borrow 166.34 billion baht from overseas financial institutions for the development of the Thai-Sino high-speed railway from Bangkok to Nong Khai.

In July 2017, the cabinet approved the Finance Ministry borrowing the same amount only from domestic financial institutions for the State Railway of Thailand to finance the Thai-Sino high-rail development from Bangkok to Nong Khai.

The first phase of the network from Bangkok to Nakhon Ratchasima, spanning 252.5 kilometres, is under construction.

The Transport Ministry is scheduled to ask for cabinet approval of the second phase of the project, running 350km from Nakhon Ratchasima to Nong Khai, before the general election.

Mr Nathporn said overseas loans from many sources are relatively cheaper than those provided by domestic ones. For instance, the Export-Import Bank of China offers a 2.3% interest rate for loans compared with an average of 2.86% extended by domestic financial institutions.

He said the Finance Ministry needs to study further whether Thailand should borrow from the Export-Import Bank of China ahead of the 27th joint Thai-Chinese railway committee meeting that will be held from Jan 23-25 in Beijing.

"The government will consider the fund that offers the cheapest interest rate, be it the World Bank, Japan International Cooperation Agency, or Asian Development Bank," said Mr Nathporn.

He insisted there is no reason for Thailand to borrow only from the Export-Import Bank of China.

Mr Nathporn said the Thai government wants to borrow 15% of the loans from domestic sources and 85% from abroad.

The government needs to settle the borrowing plan within three months, he said.

In a separate development, the cabinet yesterday approved extending the 2,000-baht visa-on-arrival fee waiver to foreign tourists from 21 countries to April 30. The starting date for waiving visa-on-arrival fees for 21 nationalities was Nov 15. The exemption was to run until Jan 13.

Mr Nathporn said the government expects to lose 2.14 billion baht in revenue from the extension, but 6.42 billion in income is expected to be generated from foreign visitors.

The cabinet yesterday also approved the state budget plan for fiscal 2020, set at 3.2 trillion baht, up 200 billion from fiscal 2019 ending Sept 30, 2019. The budget deficit would be 450 billion baht, equivalent to the previous fiscal year.

The cabinet also approved tax breaks for victims of the Pabuk storm, allowing repair bills for flooded homes and cars to be deducted from personal income tax calculations. The maximum deductions cannot exceed 100,000 baht for home renovations and 30,000 baht for car repairs.