Thailand to sign rail, rice, rubber deals with China

A food vendor sells her wares on disused rail tracks in Aranyaprathet, the Thai border town just next to the Cambodian casino town of Poipet.
A food vendor sells her wares on disused rail tracks in Aranyaprathet, the Thai border town just next to the Cambodian casino town of Poipet. ST PHOTO: TAN HUI YEE

BANGKOK (REUTERS) - China will sign agreements to build a railway in Thailand and buy some of its rice and rubber, senior Thai government officials said on Wednesday (Dec 2).

The agreements could help boost the pedestrian growth rate of South-east Asia's second-largest economy and are the latest sign of strengthening relations between the two nations since a 2014 coup in Thailand.

China has been supportive of the Thai military government, in contrast to allies such as the United States who have sought to distance themselves from the generals who seized power.

Thailand will agree to a memorandum-of-understanding (MoU) with China to build a nearly 900km railway from the Thai-Lao border to Bangkok, the officials said.

Thailand and China are planning to establish a joint venture company to undertake the project.

The two will also sign deals for China to buy 1 million tonnes of white and jasmine rice, and 200,000 tonnes of rubber from Thailand, Commerce Minister Apiradi Tantraporn said.

The rice and rubber will be sold at market price, and be delivered next year, she said.

There had been some late issues over the rubber deal as China had asked for changes in the terms, said Transport Minister Arkhom Termpittayapaisith. This would not impact the signings, he added.

The railway has been mooted for years. There is still no agreement on the price of financing of the project. Thailand has estimated it will cost 369 billion baht (S$15 billion), while China puts the price at 468 billion baht.

China has offered to finance the project with a loan with 2.5 per cent interest but Thailand wants 2 per cent, Arkhom said. Thailand may seek to borrow from domestic markets if it fails to strike the deal with China, Arkhom said.

China has ambitious infrastructure plans for the region and plans to build rail links from Kunming in southwest China through Laos to Thailand.