29 July 2016: The Thai and Chinese authorities have now reached enough points of agreement on the cost of the first part of new double track railway line linking Bangkok and Nakhon Ratchasima to set a start date for construction of September 2016.
Disagreements Over the Cost
As we reported on the 13th May 2016, the sticking point on moving forward with the project had been the cost, with the Chinese Government (who are going to do much of the work to construct the new railway line and make it operational) estimating that a higher budget is required than the Thai Government is willing to agree to.
In May the figure suggested by the Thai Government was 170 billion THB, whilst the the Chinese wanted 190 billion THB. As we predicted back in May, a compromise has been reached with a proposed budget of 179 billion THB pending further research into the cost of feasibility studies and training Thai staff to operate the new train line when construction is complete.
Three Phases
The project from Bangkok to Nakhon Ratchasima will involve constructing 254 km of new double track railway line in 3 phases. The work which will start in September 2016 will involve a 3.5 km stretch of the line in Pak Chong, a district in Nakhon Ratchasima. This 3.5 km stretch of new track is being seen as a test run for construction of the 1st phase of the project, which will involve 138 km of new train track from Kaeng Khoi (a important railway junction just North of Saraburi and some 133 km from Bangkok) and Nakhon Ratchasima. In effect the decision has been to build the last section of the new railway track first, and before any firm agreement on when, and at what cost, the remaining sections of the railway will be built to extend the new double track line to Bangkok, or indeed onward from Nakhon Ratchasima to Nongkhai.
Analysis of the Proposals
There are two ways to look at this:
Critics will argue that the organisation of the project is pitifully bad with a contract being entered into prematurely without a fully formed plan or budget being in place, and this is being done to meet the expectations of an Government which is staking its reputation in managing the Thai economy on delivering a large number of ‘mega infrastructure projects’. Critics have suggested that a 3.5 km stretch of new line will not provide any benefits as a pilot project because the track is too short to allow high speed trains to actually reach high speed.
The other way of looking at this agreement to proceed with construction (and this is the view we take at Thailand Trains) is that this is a very important first step in the development Thailand’s railway infrastructure as part of the wider Pan Asia Railway Network project linking Kumming in China to Singapore. The technology and engineering issues are in reality much less of a significant challenge than developing cooperation between the countries of South East Asia and finding the finance to build thousands of kilometres of new high speed railway track. The kind of railway track the Thai Government is seeking build involve using tried and tested technology which is already successfully in place across many other parts of the world (Japan, China, France……). What is new is getting the Chinese Government to successfully work with it South Eastern Asian neighbours putting these kinds of cross border infrastructure in place.
An Important Project
Our conclusion is therefore that this agreement to commence construction marks an important turning point in the development of Thailand’s infrastructure. Starting this project is actually going to be the most difficult part of the project, and whilst the length of the track is only 3.5 km, the distance travelled in terms of cooperation between Thailand and its Asian neighbours is millions of miles from where it was a few short years ago. There will no doubt be ‘bumps in the road’ later on because the planning phase has not been carried out very thoroughly, but at least there is a road to be travelled on. Congratulations to all involved!