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Published on January 30, 2008

Outgoing Finance Minister Chalongphob Sussangkarn and the JBIC have agreed in principle to a loan of about Bt30 billion, but the two sides have yet to finalise the contracts, said Public Debt Management Office director general Pongpanu Svetarundra.

A first amount of about Bt18 billion is expected to be the subject of the contracts signed in March. A second contract for Bt13 billion will follow later, he said.

The loans will finance construction of the Purple Line mass-transit project in Bangkok, linking Bang Sue and Bang Yai.

"I think the new government will agree with negotiations conducted by Chalongphob," Pongpanu said.

Meanwhile, Asian Development Bank (ADB) country director Jean-Pierre Verbiest urged Thailand's new government to accelerate investment in mega-projects, in order to cushion the effects of a world economic slowdown.

He said volatility in global financial markets would put greater pressure on the baht and that there was also high uncertainty about global credit conditions.

However, he said he did not believe the US had entered an economic recession. The US economy is still expanding and has not contracted for two consecutive quarters - the usually accepted indicator of a recession.

The ADB and the Japanese government yesterday provided grants worth US$700,000 (Bt23.14 million) for a Thai-government study of a single-ticketing system for mass-transit services. The study is expected to take nine months.

Wichit Chaitrong

The Nation