MORE progress is expected to be made in clearing the hurdles standing in the way of Thailand's first high speed railway (HSR) linking Bangkok and China when the premiers of the two nations meet tomorrow.
With the first phase of the 873 km high speed railway expected to begin operating within four years, there are still some nagging issues yet to be sorted out especially those relating to cost, warranty and also after sales service.
The first phase is a 252 km leg connecting Bangkok and the northeastern province of Nakhon Ratchasima.
China views the project as part of its Belt and Road Initiative while Thailand sees it as part of its plan to make the nation a transport hub in South East Asia.
According to the Bangkok Post, Transport Minister Saksayam Chidchob was optimistic about the negotiations, which has made a slow progress for about a year, as authorities cannot agree on cost and warranty issues.
The issues involve the cost of purchasing tracks, an electricity system, machinery, procurement of train carriages and training.
So far officials from both sides have yet to see common ground on prices or a warranty period.
According to Transport Ministry permanent secretary Chaiwat Thongkamkoon, China had also tagged the costs under this contract in the "lump sum of big numbers" without clearly giving the price details for each piece of equipment and facility.
However, the Thai government wants to check and compare the prices with those in the market.
Chaiwat had said that a lack of price details put the contract at risk of violating Thai procurement law, which required clarification on construction costs.
On the warranty issues, the Chinese suggests only a one year warranty for the high speed trains while Thailand wants it for at least two years and also with the appropriate after-sales services.
The Thai government also plans to seek loans from domestic sources and China, and an appropriate interest rate will be inevitably brought to the negotiating table for the RM32 billion project.
The Export-Import Bank of China has offered a 3 per cent rate while Thailand is trying to ask the bank to reduce it to 2.5 per cent.
The project was delayed in 2016 when Thailand rejected Chinese financing due to high interest rates.
For the first phase, the construction of its two sections totalling 14.5 km in Nakhon Ratchasima has started.
The Transport Ministry said that the rest was expected to be built as early as next year following a bidding process.
Once completed, it will link the capital and Nakhon Ratchasima, dubbed the Gate to the Northeast, with six stations along the line starting from Bang Sue central station to Don Muang, Ayutthaya, Saraburi, Pak Chong and Nakhon Ratchasima.
The Bangkok-Nakhon Ratchasima line is part of a larger project to build the high-speed train system to Nong Khai next to Laos, which will eventually make the route a crucial piece of the jigsaw in the Chinese Belt and Road Initiative in South East Asia.
Officials expect the Nakhon Ratchasima - Nong Khai section to be open in less than two years after the Bangkok and Nakhon Ratchasima section starts service.
China has put much focus on rail sections in Thailand as they are part of an ambitious project to link together southern China, Laos, Thailand, Malaysia and Singapore under its Kunming-Singapore strategic route.
Once trains from South East Asia reach Kunming and travel further to Beijing, it can then complete transnational routes connecting China with Russia and European countries.