Govt to invest 2.2 trillion baht in transport overhaul

Govt to invest 2.2 trillion baht in transport overhaul

The government yesterday announced a 2.2-trillion-baht investment package to boost the country's transport system, including a massive increase in rail services in Bangkok.

The Pheu Thai Party-led government aims to increase connectivity between Bangkok and other provinces with a new high-speed train service, and to improve travel conditions in the capital by adding nearly 400km to the existing electric rail network.

The investment programme, to be overseen by Transport Minister Chadchat Sittipunt, also aims to encourage trade and investment.

The massive investment plans were unveiled as the government prepared to issue a bill authorising loans amounting to 2 trillion baht.

The loans will finance the transport infrastructure investment over the next seven years, from this year to 2020, said a source. Details of each project are being summarised and will be forwarded to the cabinet for approval next month.

On top of the loans, the government has also set aside an additional budget of 33.3 billion baht, loans from other sources totalling 105 billion baht, 38.7 billion baht in revenue from state enterprises and another 106 billion baht from the public-private partnership.

Mr Chadchat said 93.14%, or 1.8 trillion baht of the 2-trillion-baht loans, would pay for transport infrastructure projects under the supervision of his ministry.

The investment involves four main transport networks, accounting for 78% of the borrowing.

These are roads, rail, water transport and air, he said. The huge spending on infrastructure was crucial for the country's economic growth, he said.

The investment would ease the transport burden on roads and shift it to the rail network, which would help reduce logistics costs by up to 13.2%, he said.

Currently, logistics costs make up about 15.2% of gross domestic product, compared to 8.3% in the United States.

The programme would also improve transport in and near Bangkok.

It would add nine more electric rail routes to subway and skytrain services, coupled with a flat-rate ticket price of 20 baht for all mass transit services to encourage greater use of the system.

Bangkok has only 80km of electric railways at present. The investment will expand the total length of electric railway in the greater Bangkok area to 464km by 2019, the minister said.

The investment in a high-speed inter-provincial train network would shorten travel times between Bangkok and other parts of the country. High-speed train trips within 300km of Bangkok would take no more than 90 minutes, he said.

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