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Published on February 26, 2008

The Finance Ministry and the JBIC will sign a Bt16-billion loan next month to finance construction of the Purple Line, carrying annual interest of 1.4 per cent, he said.

"The Purple and Red lines will be the first to be constructed under the master plan, which covers nine routes. They require a combined investment of Bt700 billion," Santi told a conference yesterday.

Prime Minister Samak Sundaravej said the Cabinet today would approve the programme for development of the nine urban train routes, expected to be completed in three years.

"The development plan could be slightly altered, but all of the planned lines will be kicked off with the Purple Line."

He said a special committee to be chaired by him would be established to oversee its development.

Project financing, aside from JBIC loans, will also come from state bonds. The Finance Ministry will set up the Vayupak II Fund, issuing bonds worth Bt300 billion to Bt500 billion and carrying interest of 4-5 per cent.

Samak said he was confident the bonds would be warmly welcomed by domestic savers.

Aside from the urban train development, the government will push forward with construction of a double-track railroad. The project will run parallel to the existing 3,700-kilometre rail line.

"After that, we'll widen of the railways and sleepers. The process will not disrupt rail services," he said.

Samak also highlighted the possibility of the government acquiring a majority stake in Bangkok Mass Transit System (BTS), by having the Finance Ministry purchase its 89-per-cent stake from foreign creditors. He insisted the procedure would not affect the BTS concession.

Santi said the Transport and Finance ministries would discuss the bond issues again, as well as the ratio of domestic and foreign funding.

While construction of the Red and Purple lines can proceed, the Blue Line is still awaiting an environmental-impact assessment, Santi said.

On the government's acquiring a majority stake in BTS, Santi said the ministry would speak with BTS's creditors again. However, he insisted the government had no problem with setting a budget to buy the BTS stake.

"We'll do whatever benefits the public. This could bring down fares," Santi said, adding that if all of the projects were government-owned, it would be easier to reduce fares.

The Nation