Thailand’s cabinet has approved a 2.2-trillion-baht (US$68 billion) loan bill proposed by the Transport Ministry for high-speed railway and other transportation mega projects.
“This investment will help lower logistic costs, fuel consumption and travel time,” Finance Minister Kittiratt Na-Ranong told the Bangkok Post.
The transportation network development would reduce logistical costs from 18% to about 10% and strengthen the trade competitiveness of Thai manufacturers, Pongsak Assakul, chairman of the Board of Trade of Thailand, said.
The seven-year project involves 200 high-speed trains on lines linking the capital Bangkok with the north, south and east of the country.
"The projects, which will focus on electric trains and dual tracks, will completely change Thailand, and they will start next year," said Transport Minister Chatchai Sitthipan.
"The investment will stimulate the real GDP growth between 2013 and 2020 by 1.0% annually and will also create more than 500,000 jobs," added the Finance Minister.
Assakul said on Tuesday the government's planned development projects to be funded under the legislation would help Thailand become a regional hub of ASEAN (Association of Southeast Asian Nations.)
The high-speed rail lines will be built in two stages and eventually link Bangkok with the Malaysian and Lao borders, as well as the northern city of Chiang Mai, the seaside resort of Pattaya and areas further to the east.
Bangkok will also get a metropolitan rail network.
The new trains will be capable of travelling at up to 155 miles per hour, reducing travel time from Bangkok to northern Thailand to four hours from 12 hours, a cabinet document said.
After receiving the cabinet’s approval the bill will now be forwarded to Parliament.
Prime Minister Yingluck Shinawatra told the press after the cabinet meeting on Tuesday that the management of the massive budget for the project will be graft-free and transparent.