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Thailand's high-speed rail carries high price tag

Publication Date : 06-08-2012


Inspired by bullet train technology and the geographical advantages of the country, many share the ambition that Thailand can proceed to the next stage of development.

A consensus seems to have formed that investment in the rail system was urgently needed, especially to bring down high logistics costs, currently at about 20 per cent of gross domestic product.

Chalongphob Sussangkarn, an economist at the Thailand Development Research Institute (TDRI) and a former finance minister, said last week that since the government plans to upgrade the rail network and extend it to other Asian countries, the country should seek a vision for the next 10-20 years.

The country should not only import technology, locomotives and parts from foreign suppliers, but also look into the possibility of producing its own parts for trains.

"We're competitive in the auto and parts industry and we may be able to leverage from the solid base to advance to a high-income country, otherwise we will be trapped as a middle-income country for many years," he said.

The Office of Transport and Traffic Policy and Planning has proposed four new routes from Bangkok to Chiang Mai, Nong Khai, Rayong and Padang Besar. The 800-billion baht (US$25 billion) project covers every key section of the country - North, Northeast, South and Eastern Seaboard.

The cost is as high as the speed of the trains.

Due to the big budget, the government might just start with a first phase of about 300-400 kilometres from Bangkok.

"Due to high investment risk we should first build double-track railroads before thinking about high-speed trains," said Nakorn Chantasorn, an adviser to the president of the National Science and Technology Development Agency.

Thailand's cities and towns are located along roads, which match movement by passenger car and public vehicular transport, unlike Europe, whose communities cluster around rail lines. That makes high-speed train investment successful there, he said.

If the Kingdom has to invest in high-speed trains, cities and towns will have to be relocated.

Getting a chance to get involved in high-speed train technology was not that easy, said Nakorn, who worked as an engineer for many years with the State Railway of Thailand.

The current government has yet to firm up a clear policy on how to deal with the issue. While Chalongphob is upbeat about the possibility, Nakorn harbours several concerns.

Since the trains will run at high speed, the risk of accidents and serious damage to life and property is also high, so the cost for the system is also high, as mechanical parts must be subjected to a very high standard.

"Recognising this fact, those who were initially enthusiastic have become disheartened," Nakorn said.

Many may agree with him, as Chinese high-speed trains have frequently experienced serious crashes in recent years.

Japanese experts have just finished a feasibility study for a high-speed train route linking Bangkok and Chiang Mai, while an expert team from China is conducting a study for Bangkok-Chiang Mai and Bangkok-Nong Khai.

The Nong Khai route may be the first to be built as China and Laos have been negotiating to build a railroad from Kunming in southern China to Vientiane, the capital of Laos.

But the tough conditions demanded by the Chinese government made the Laotian government reluctant. Some say Laos is worried about the train investment with China's help, as that might lead to a Chinese occupation of its soil.

The bottom line is how the countries share risk and return.

Chalongphob, who led TDRI's study on the economic gains from a rail network connecting with neighbouring countries, said Thailand, China and Laos should sit down and discuss the train route from Kunming to Vientiane and on to Nong Khai.

"To get the project off the ground quickly, I think the three parties should hold talks on the issue," he said.

The existing double-track rail route runs between Chachoengsao and the Laem Chabang eastern seaport. The Cabinet has just approved extending it to Kaengkhoi in Saraburi.

Both double-track and high-speed railroads face challenges in obtaining adequate financing, securing appropriate technology and sharing risks and benefits within Thailand and neighbouring countries.


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