Updated at 5:25 p.m. ET on 2019-10-23
The State Railway of Thailand signed an agreement with a consortium including a Chinese state-owned company to build a $7.4 billion high-speed railway that would connect three airports, officials said Thursday.
Prime Minister Prayuth Chan-o-cha presided over the signing ceremony for the construction of the 220-km (137-mile) line linking Bangkok’s Suvarnabhumi and Don Muang international airports to U-Tapao airport, which serves Pattaya, a town popular among tourists in the eastern seaboard area.
“[This] is a historic moment in Thailand that the private sector signed the agreement with the public sector to promote this mega construction project,” said Supachai Chearavanont, CEO of the conglomerate Charoen Pokphand (CP) Group, which led a consortium that includes China Railway Construction Corp.
Suphachai signed the agreement with State Railway of Thailand Acting Gov. Worawut Mala. China’s Ambassador to Thailand Lyu Jian witnessed the signing.
CP Group is Thailand’s largest conglomerate. The consortium it led won the bid in November 2018.
The deal was made under Thailand’s public-private partnership program, which calls for a government investment of 119 billion baht (about U.S. $3.93 billion) and 117 billion baht ($3.86 billion) from the private sector. Other terms of the deal were not made available to reporters.
The rail project set a precedent for a regional economic strategy to link China's One Belt, One Road initiative with the ECC, Lyu Jian said, according to China's official state news agency Xinhua.
Japanese banks have agreed to partly finance the high-speed rail, which will feature 181 km (113 miles) of elevated track, officials said.
Suphachai told reporters construction is expected to be completed within five years. China’s state-run news service Xinhua said some routes would be operational in 2023.
“This was the first project that China and Japan were cooperating with a third country, which makes this project the beginning of a new era of cooperation in Asia,” Kanit Sangsubhan, secretary general of the Eastern Economic Corridor (EEC), told reporters.
EEC, the common name for Thailand’s eastern seaboard, is the nation’s center for export-oriented industries, where high-value goods, such as Japanese automobiles, are manufactured and shipped elsewhere. The region includes the provinces of Chonburi, Rayong and Chachoensao.