 |
Economics and Investment Careful consideration has been given not just to engineering and traffic but to the project's economic and investment ramifications as well. Government planners have studied numerous economic indices, including the following:
- Construction of the proposed rail system is estimated to cost 12,600 million baht, while construction of the new expressway and frontage road is budgeted at 14,100 million baht. Compensation for the use of land owned by the private sector and the State Railways of Thailand (SRT) is expected to total 5,700 million baht.
- The net present value (NPV) of the rail link from Bang Sue to Nakhon Pathom and of the expressway is estimated at 12,940 million baht.
- The benefit/cost (B/C) ratio is equivalent to 1.60.
- And the economic internal rate of return works out to be 17.5%.
The figures above point to the economic viability of the proposed the Western Corridor Project. The anticipated benefits of the project clearly outweigh the cost of construction. Once it is up and running, the new link will speed travel times across the river, reduce costs to car owners, and minimize traffic accidents. It will also promote national development as a whole.
The most financially advantageous form of investment appears to be a joint arrangement between the state and private sectors, provided that the government bears the cost of land appropriation. Recommended loan/ capital ratio is 2:1.
|
