Scant hope Thai-China rail project will proceed

Unsurmountable problems stand between Thailand's plan to build a rail connection to China, but the recent decision to proceed with the project indicates that the government is determined to achieve its logistics ambitions. The Thailand-China negotiations draft on the high-speed rail connection will be submitted to Parliament for consideration, Thai Prime Minister Abhisit Vejjajiva said last month. But neither he nor government websites have elaborated on the details of the project. "We are as confused as everyone else," a senior State Railways of Thailand executive told Cargonews Asia. Nothing has been revealed on the funding of the project, the routes planned, the labour involved, and what sort of trains will be built, high-speed, bullet or conventional. It is assumed that the deal will comprise three routes - Nong Khai-Bangkok, Bangkok-Padang Besar on the southern border with Malaysia, and Bangkok to Rayong. The first two routes are 580 km and 940 km respectively with the route to Rayong being a more modest 220 km. Other routes have been suggested but there have been no feasibility studies. The three rail routes will connect to a conventional railway China is building to its border with Laos. Once Thailand's rail project is realised, China's existing rail network will be connected to Thailand's and onwards to Malaysia and Singapore. There is no doubt that this is a major infrastructure development project with strategic implications. Moving large volumes of cargo will become much easier and cheaper and intra-Asian trade will gain more significance. Details of the infrastructure construction between Thailand and China are now being addressed although no-one expects it to be an entirely easy process, particularly as the rail network has to be largely built from scratch. "There's a lot of work to do," acknowledged Pierre Chartier, economics affairs officer of the transport and tourism division of the United Nations Economic and Social Commission for Asia and the Pacific. "The good news is that all feasibility studies have been completed." But although Thailand is committed to the rail network it might not have the resources to go ahead with it. Part of the problem is financing. One of the issues is whether or not Bangkok would accept Chinese export credits or government soft loans to fund the project. These usually are conditional on accepting Chinese labour - something that makes sense for Beijing but not Thailand. Another part of the problem is the vexed issue of Private Public Partnerships (PPPs) or more usually the lack of them. "The two primary reasons are the current PPP law of 1992, and the absence of a champion within government to drive PPP projects," conceded Deputy Finance Minister Pradit Phataraprasit. Then there are the political issues. Firstly, the current government coalition is shaky and funding of any major infrastructure project will arouse opposition with the election only 14 months away. The decision effectively will be made not by this government but by its successor. The project faces a tough internal political test as bureaucratic resistance is already building up. Pointing out there are some 64,000 Chinese workers in Laos building the railroad one SRT executive chafed at the suggestion that 100 Chinese engineers will come to Thailand. "We're actually working to try and create jobs for Thai people to develop our own expertise," said the official. "I don't believe that Chinese workers will be accepted in Thailand.''
(Source:www.cargonewsasia.com)