Design-and-build contracts will be used to develop three mass-transit routes under a proposal accepted by caretaker Deputy Prime Minister SuriyaJungrungreangkit's Cabinet agenda-screening committee yesterday.

The proposal will be presented to the Cabinet on Tuesday for final approval, caretaker Transport Minister Pongsak Ruktapongpisal said.

"We expect to open bidding within three weeks after the Cabinet's endorsement," he said.

The proposal consists of three electric rail lines, including a route connecting central Bangkok with Suvarnabhumi Airport.

Under the design-and-build concept, construction companies design and build each phase within a fixed budget. This allows the government to control the cost of each phase as well as the entire project.

The government had appeared to prefer turnkey contracts, where contractors design the entire project and propose the total cost, which normally includes a cushion to cover them against risk factors.

Pongsak said the screening committee opted for the design-and-build concept in line with a suggestion from the National Economic and Social Advisory Council, which expressed worry that turnkey deals could push the project costs too high.

The council also suggested the government develop the Red line first and the Purple and Blue lines later so as not to pass on a budget burden in case political parties other than Thai Rak Thai form the next government.

Pongsak said that with design-and-build, the government would finance the construction with its own money, but contractors could also present their own financing plans. If they could secure a lower interest rate than what the state can obtain, they would have the inside track to win the bid.

"This will be considered by the Finance Ministry," he said.

Caretaker Finance Minister Thanong Bidaya said his ministry might seek a soft loan from the Japan Bank for International Cooperation (JBIC) for the government's planned Bangkok commuter train project.

"A loan from JBIC is our best choice now, given the low fixed interest rate and long payment period," Thanong told reporters.

The JBIC charges 0.75 per cent-0.95 per cent in interest on a loan with a 10-year grace period and 30-year repayment period, he said.

The size of the loan and other details are still up in the air because the rail project is awaiting government approval, he said.

Pongsak said the Transport and Traffic Policy and Planning Office and other agencies would organise a public hearing on the project's terms of reference next week, to ensure transparency in bidding.

Piyanart Srivalo

The Nation