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Published on October 3, 2007

The Cabinet yesterday approved the long-awaited Purple Line mass-transit system, worth Bt55 billion, connecting Bang Sue to Bang Yai.

Deputy Finance Minister Sommai Phasee said the government was considering seeking financial support from the Export-Import Bank of China after some hesitation by the Japan Bank for International Cooperation (JBIC) in approving lending for the project.

The Chinese bank recently showed interest in financing mass-transit and other mega-investment projects in Thailand.

"The government will not wait

for loans from the JBIC. We may borrow from the domestic market or other sources," Sommai said, adding that domestic loans might cost 1.2-1.5 per cent more than loans from the JBIC.

The Chinese government, via its Export-Import Bank, is also willing to provide US-dollar terms to Thailand. The interest rate is expected to be 3 per cent, with a 15-year payment contract, he said.

If a Chinese firm wins the bidding to participate in construction of the mass-transit project, part of the funding may come from China, Sommai said.

The new Bt55-billion Purple Line, which will be 23 kilometres long, will connect Bangkok's sprawling weekend market to the capital's southwestern suburbs. It is expected to begin operation in 2012.

Sommai said bidding for the construction would be open to all. Japanese firms could form consortia with local contractors to participate, and if a Japanese firm won, part of the funding could come from Japan.

Transport Minister Theera Haocharoen said the Cabinet assigned the State Railway of Thailand to oversee the civil work, which would cost Bt31.127 billion. An expenditure of Bt1.248 billion will be made to hire a consultant.

Internal bidding for a contractor should be opened this year, with the winning contractor named by next May.

The Transport Ministry plans to call a meeting today of parties involved in the construction of the Purple Line to discuss detailed planning.

As for the Red Line mass-transit route from Bang Sue to Rangsit, the ministry is planning to accelerate its processes, in order to ensure it receives Cabinet approval this month.

Public Debt Management Office director-general Pongpanu Svetarundra said the government planned to borrow Bt8 billion next year to finance the Purple Line. Civil work was expected to cost Bt31 billion. The government will borrow about Bt10 billion over the next three years, he said.

The government has not yet decided who will operate the rapid-transit system. A private company may be hired to operate the train service, he said.

Mass Rapid Transit Authority of Thailand (MRTA) governor Prapat Chongsanguan said if the bidding went as planned, then the authority should have a contractor by next May or June.

"The Finance Ministry will borrow from local and foreign markets to finance the construction," he said.

The MRTA will discuss the cost of land expropriation for the construction with the Treasury Department next week, he said. The issue will be finalised if the cost amounts to Bt9 billion.

The two mass-transit investment projects are part of government efforts to speed up investment at a time when domestic investment and consumption has slowed.

Although Bangkok is notorious for its traffic congestion, the city's existing mass-transit system has only three lines - two aboveground, and one underground - totalling 75km of tracks.

Wichit Chaitrong,

Watcharapong Thongrung

 The Nation