After months of delay, the Finance Ministry now believes it can secure an Bt84-billion mass-transit loan from the Japan Bank for International Cooperation (JBIC) in August after Tokyo decided to send a fact-finding mission to Bangkok at the end of this month.

The visit of the first government mission from Japan marks a significant step in pushing the project forward, because the group will appraise and assess the projects before seeking further approval from the Japanese government.

After returning from Japan yesterday, Debt Management Office director-general Pongpanu Svetarundra said Finance Minister Chalongphob Sussangkarn met his Japanese counterpart and JBIC executives last week to discuss the loan issue.

The Japanese finance minister promised Chalongphob that he would send a team of officials from that country's Finance, Foreign and Economy ministries as well as the JBIC to Thailand on May 28, to gather information about mass-transit investment and the overall economic health of the Kingdom.

Japan is expected to complete its project appraisal next month.

The government wants to open bidding for construction of the first route, the Purple Line between Bang Sue and Bang Yai, in August.

The Finance and Transport Ministries also convened their first meeting yesterday to discuss the extension of the mass transit line to propose to the Cabinet meeting on May 22.

Deputy Transport Minister Sansern Wongcha-um said after meeting with Deputy Finance Minister Sommai Phasee and other agencies that the meeting already came up with a time schedule to open the bidding for the private sector.

The first route for Cabinet consideration on May 22 will be the Red Line, between Bang Sue and Taling Chan, which should be ready for bidding next month.

The State Railway of Thailand (SRT) is working on the final design for Rangsit to Bang Sue before proposing the budget for Cabinet approval.

The SRT will propose the Bang Yai to Bang Sue project to the Cabinet for approval around mid-July, and bidding should open in late August, Sansern added.

Sommai said the Red Line, covering 14.75 kilometres between Bang Sue and Taling Chan, would be the first project to go ahead. The government will finance the public work with Bt11 billion coming from domestic loans borrowed by the SRT.

The JBIC will finance the Rangsit to Bang Sue segment of the Red Line.

Sommai said the government planned to borrow 300 billion yen (Bt86.75 billion) from the JBIC, which should cover 75 per cent of the total Bt120 billion budgeted for public work.

Pongpanu said initial discussions indicated the JBIC was concerned about the environmental impact of each line, even though Thailand had already completed an environmental-impact assessment for the first line.

The government plans to spend Bt160 billion on the three lines: Purple, Red and Blue. The government will borrow Bt13 billion from within Thailand for the Red Line.

The JBIC initially offered to cut its interest rate 0.1 percentage point, from 0.75 per cent to 0.65 per cent.

Tenders for the Red and Blue routes are expected to open in January and July 2008, respectively, under the supervision of the new government.

Local political uncertainty has partly contributed to the hold-up in the mass-transit projects and JBIC loan agreement. The private sector has urged the government to accelerate mega-project investment in hopes that it can boost sagging private investment.

Wichit Chaitrong

The Nation