BANGKOK (REUTERS) - Thailand will approve a high-speed railway project worth US$12 billion (S$16 billion) next week to be built with Japanese help, a Thai minister said on Wednesday, one of several big-ticket plans the government hopes will stimulate Southeast Asia's second largest economy.
The Thai-Japan rail project is part of the government's eight-year investment plan worth more than US$56 billion to help boost a slowing Thai economy by strengthening infrastructure, employment, transport and tourism, said Transport Minister Air Chief Marshall Prajin Juntong.
"Next week, we will present a memorandum of cooperation to the cabinet," Prajin told reporters. "If it is approved we will fly to Japan on May 27 to sign the deal."
The rail scheme will cover a distance of 670 km, connecting the Thai capital, Bangkok, to the northern city of Chiang Mai.
Construction could begin as early as the second quarter of 2016, he said.
Thailand is also expected to begin construction of a Thai-Chinese rail project worth just under US$9 billion during the fourth quarter of this year, he added.
Thailand and China struck a deal in December that will see two dual-track railways covering more than 700 km.
Under this deal, China will build the track and rail system and Thailand will build tunnels and bridges.
The Thai junta has targeted infrastructure spending as a long-term fix to some structural economic problems. The projects are also expected to stimulate private investment.
Thailand's trade-dependent economy is stuttering amid slow demand for its exports. The state planning agency on Monday cut its 2015 full-year growth to 3 to 4 per cent from 3.5-4.5 per cent.