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WASHINGTON, D.C., June 27 -- The International Finance Corporation (IFC) has approved a second investment of US$20 million in the Bangkok Mass Transit System Corporation Limited (BTSC), which involves building, operating, and maintaining an urban rail system in Bangkok, Thailand. IFC's equity investment is for about 2.8% of the total outstanding share capital in BTSC.
The mass transit system will have a significant impact on the regional economy by reducing daily travelling time and traffic congestion in the central business district of Bangkok. It will also help to relieve problems relating to pollution, health, and excess fuel consumption; and free up government resources for other activities.
The estimated cost of the project is US$1.67 billion. IFC's initial investment was a US$50 million loan for its own account. The total debt financing that has been mobilized from international and local financial institutions on a non-recourse basis amounts to over US$1 billion.
"IFC's presence in the company's shareholding sends an important signal to the investors signifying our support to the project," said Mr. Assaad Jabre, Director of IFC's Infrastructure Department. "This project is a highly visible component of the government's commitment to open new areas of infrastructure to the private sector in order to give the public more efficient services."
The project is structured under a 30 year Build-Operate-Transfer (BOT) Concession Contract with the Bangkok Metropolitan Authority. A consortium, comprising Siemens of Germany and Ital-Thai, a Thai construction company, will build the transit system on a turn-key basis (fixed price, fixed delivery date, and guaranteed performance). The sponsors are Tanayong Public Company Limited, a Thai real estate development company.
The transit system will be entirely elevated and located above the existing main roads, running about 15 miles (23 km). Safety features commensurate with international practices have been built into the design. There will be two inter-connected lines, the
Silom and Sukhumvit Lines, with a maximum carrying capacity of about 50,000 passengers per hour per direction.
BTSC has designed a plan to reduce noise, improve air quality, and alleviate other potential adverse environmental impacts.
IFC is the private sector arm of the World Bank Group and is the largest multilateral source of equity and loan financing for private sector projects in developing countries.
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