Thai Deputy Finance Minister Pradit (centre) and Japan’s ambassador to Thailand Kyoji Komachi (left) are about to exchange their signed copies of agreement while JICA Thailand office’s director Katsuji Onoda looks on.

Thailand yesterday signed an agreement to borrow about 63 billion yen ($655 million) from Japan International Cooperation Agency (JICA) in an effort to finance the Red Line rail project, linking upper Bangkok to Rangsit in Pathum Thani province.

The agreement, worth about 23 billion baht, was signed between Thai Deputy Finance Minister Pradit Phataraprasit and Japan’s ambassador to Thailand Kyoji Komachi and JICA Thailand office’s director Katsuji Onoda.

The 63-billion-yen loan, bearing an interest of 1.4 percent a year and a 25-year maturity with seven-year grace period, from JICA has earlier been finalised during Prime Minister Abhisit Vejjajiva’s visit to Japan last month.

The loan will be used for the construction of the Bang Sue – Rangsit part of the 75.5-billion-baht Red Line mass transit project, which will also stretch from Bang Sue to Taling Chan in southern Bangkok for a distance of 15 kilometres and from Hua Lampong to Mahachai in Samut Sakhon province for 35.5 kilometres.  

Currently, Bang Sue and Hua Lamphong is linked by the Blue Line subway system, operated by Bangkok Metro Plc (BMCL), for the distance of 20 kilometres.

Meanwhile, the Bang Sue – Rangsit rail route will be operated by the State Railway of Thailand (SRT) which has already been responsible for the Suvarnabhumi Airport Rail Link, linking downtown Bangkok to Suvarnarbhumi Airport. The Airport Rail Link is expected to commence operations on August 12.

Thai government has also planned to seek another $2 billion of loans from the World Bank and the Asian Development Bank for the Red Line project.