Deal on Thailand’s $7bn Eastern Corridor rail link expected by end of month

Thailand’s largest conglomerate is about to sign a $6.9bn deal with a Chinese contractor to build a high-speed railway connecting three of the country’s largest airports, according to the State Railway of Thailand.

Charoen Pokphand Group (CP Group) was granted sole negotiating rights in November, but talks on the project later stalled over issues of financing.

However, a senior State Railway official told the Nikkei Asian Review on Thursday, 4 April: "CP has made a deal with a financial institution, removing a large barrier."

The Thai government now intends to move to a final agreement by the end of the month.

The 220km railway will connect two Bangkok airports, Don Mueang and Suvarnabhumi (pictured), with U-Tapao airport, located midway down the country’s southeastern coast.

It would be part of the Eastern Economic Corridor, which aims to create a state-of-the-art base for Thailand’s manufacturing and export industries.

The construction work on the link is expected to be carried out by China Railway Construction Corporation. CP had hoped to enlist Japanese companies such as Itochu and Hitachi, but they withdrew over concerns about profitability.

CP Group is a conglomerate that deals in the food industry, telecoms and media, e-commerce, automotive, property development, pharmaceuticals and finance.

As well as the rail link, a consortium led by CP Group has formed the Thana Holding Joint Venture consortium, which has entered a bid for a $9bn project to develop U-Tapao airport and the Eastern Aviation City.

Image: Suvarnabhumi International Airport (Gronico/Public domain)

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  1. Progress with the rail system is always great news. Top priority should be given to the high-speed line from Bangkok to Laos to greatly improve transport, travel, tourism and trade with China and Laos.

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