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China agrees on deal to build 867km of railways in Thailand

[BANGKOK] Thailand and China agreed on Friday to build 867km of dual track railways in the Southeast Asian nation, in cooperation seen as consolidating China's influence in the region.

A memorandum of understanding (MoU) was signed on the sidelines of a two-day regional summit that began in Bangkok on Friday.

The project could be a boon for Thai trade and tourism and strengthen China's strategic foothold in a country that has seen its traditionally strong ties with the United States cool since a military coup in May.

"China will be responsible for the construction and development of the rail network and Thailand will take part in preparing the groundwork for construction," Thailand's transport minister, Air Chief Marshal Prajin Junthong, told reporters.

The first line will be a 734-kilometre standard-gauge dual track railway stretching from Nong Khai on Thailand's border with Laos, to its industrialised eastern seaboard. China has provisionally agreed with Laos to build a railway from Kunming through Laos, with the aim of connecting with Thailand.

China will also develop another, 133-kilometre rail track linking the central province of Saraburi to Bangkok, about 108 kilometres away. Construction would begin in 2016, Prajin said.

No details of the cost of the projects were disclosed. Earlier this month, Thailand's military-stacked legislature approved a preliminary agreement on the China deal, putting the value at 350 billion baht (S$14 billion).

Mayasu Hosumi, president of the Japan External Trade Organization in Thailand, said the rail network was "indispensable for the enhancement of production networks" in the region.

Chinese Premier Li Keqiang is attending the Greater Mekong Subregion summit in Bangkok alongside prime ministers and presidents from Laos, Cambodia, Vietnam, Myanmar and Thailand.

He is the most high-profile foreign leader to visit Thailand since the coup, signalling, Thailand says, its return to normalcy following months of political unrest.