Bullet train or chug-a-lug?: Thai PM orders the Japanese to slow down to save money

[cookieqw]

6 hours ago, smutcakes said:

If this does not go ahead, will the heads of the NCPO be found personally liable for all the money wasted? Including the construction of a 3.5km line in Khao Yai.

 

I doubt they care if it goes ahead. Lots of money already doled out for feasibility studies, EIA's etc etc

only if one of them has the name shin?????

[shady86]

Not sure what you mean by these comments.
Japan is solely a lender. It is not an investor in the project.Thailand's failure to service its loan will be addressed by any default remedies in the loan agreement. I don't recall seeing any published specifics in the agreement covering that aspect to guess what those provisions are.
 
But certainly the Japanese can have many options outside the loan agreement to penalize Thailand if it breaches the loan agreement. Japanese investment in the EEC comes immediately to mind wherein it could retaliate by demanding a renegotiated EEC Development agreement or withdraw all its billions USD investments in EEC. And as we saw with China that feared Thailand's possible default on the dual rail project, it insisted on much higher interest rates for risk of loan default or an upfront substantial cash fee that basically equated to the incremental higher interest rate cost (the latter actually was agreed!).
 
Private Japanese firms have contracts with Thailand to build parts of the high speed project whose costs are based on specific project specifications. This in turn drives their profit margins. If Thailand unilaterally changes the specifications it essentially breaches these contracts and damages those firms. That will no doubt activate contract default provisions - no doubt that will be expensive.
 
The bottom line is that Prayut made a mistake with this project but Japan will not be damaged by that. Ultimately, Prayut loses face (he has immunity from losses) but the Thai taxpayer will pay in more taxes and/or in reduced social benefits.
 
 

Most tax payers know the where the taxes paid go to, that's why business and people have been finding way for loopholes.[emoji16]

[smutcakes]

30 minutes ago, Srikcir said:

Not sure what you mean by these comments.

Japan is solely a lender. It is not an investor in the project.Thailand's failure to service its loan will be addressed by any default remedies in the loan agreement. I don't recall seeing any published specifics in the agreement covering that aspect to guess what those provisions are.

 

But certainly the Japanese can have many options outside the loan agreement to penalize Thailand if it breaches the loan agreement. Japanese investment in the EEC comes immediately to mind wherein it could retaliate by demanding a renegotiated EEC Development agreement or withdraw all its billions USD investments in EEC. And as we saw with China that feared Thailand's possible default on the dual rail project, it insisted on much higher interest rates for risk of loan default or an upfront substantial cash fee that basically equated to the incremental higher interest rate cost (the latter actually was agreed!).

 

Private Japanese firms have contracts with Thailand to build parts of the high speed project whose costs are based on specific project specifications. This in turn drives their profit margins. If Thailand unilaterally changes the specifications it essentially breaches these contracts and damages those firms. That will no doubt activate contract default provisions - no doubt that will be expensive.

 

The bottom line is that Prayut made a mistake with this project but Japan will not be damaged by that. Ultimately, Prayut loses face (he has immunity from losses) but the Thai taxpayer will pay in more taxes and/or in reduced social benefits.

 

 

Japanese development in the EEC is not state investment, it is private and public firms investing in manufacturing facilities there, i am not sure what the EEC development agreement between Japan and Thailand is that could be renegotiated, and Japan is not likely to tell private companies to pull out of the EEC.

[Lingba]

LOL

[Ricardo]

It is unfair to give current-PM Prayuth all the credit, for effectively canning this silly project, as it has been a favourite of previous administrations too  ...  for example many will recall former-PM Yingluck announcing what the packaged-meals were going to be on this new route (to her home town), and saying that it would help speed agricultural-produce down to Bangkok.

 

Incidentally it was only going to be built half-way, with some unidentified/hoped-for private investor being expected to appear and complete it through the more-expensive moutainous sections, sometime way in the future & once it was up-and-running as-far-as Phitsanulok.

 

Prayuth can take some credit, for finally admitting what we've been saying on ThaiVisa for years, that it simply doesn't make economic sense as a high-speed passenger-only line.  So it's very unlikely to ever get built.  Unlike less-ambitious cheaper options, like the SRT track-doubling part-way, on the existing metre-gauge route.

 

The PM knows that Thailand already has serious challenges, in trying to finance the much-more-viable Chinese standard-gauge medium-speed heavy-freight (plus a few passenger-trains) route, for which that 3km test-track is supposedly being built, as part of the (first) Bangkok-Khorat section.  Note that there are still the second  (Khorat to Nong Khai)  and third  (Eastern Seaboard)  sections of that to ever be funded. 

[kevc]

Thai motto as long as it looks good on the outside doesn't matter whats inside.

Sent from my SM-P901 using Thailand Forum - Thaivisa mobile app

[mommysboy]

What's the Japanese word for snail?

[ChouDoufu]

3 hours ago, jenny2017 said:

  Deutsche Bahn in Germany is unable to fill positions for high tech train drivers and a high school education is needed. But high schools in LOS are a bit different, ruffly speaking. 

not sure if that is a poor translation.  could be needing a certificate

from a "hochschule," which is just an institute of higher education,

either a uni or college.

 

regardless, once hired, there is a 3 year internship before allowed

to drive.  lotta work for little pay.

 

http://www.dw.com/en/german-train-drivers-earn-less-than-youd-think/a-18467783

[LomSak27]

8 hours ago, shady86 said:

Might as well cancel it or give it to the Chinese.

Chinese are going to have the same concerns/complaints as the Japanese. Looks like this is going nowhere faster than anticipated.

[Sydebolle]

As long as you can fly for THB 590, all in - it might be noteworthy that this is cheaper than driving yourself, sitting in a (dangerous) long distance coach and no comparison with today's train travels. 

Am I the only one smelling a rat here ........ ? 

[nkg]

It is worth remembering that Japan's railways remain $350 Billion in debt, despite being generally regarded as very successful. And this in a hugely wealthy country that is perfectly suited to high-speed trains (population distribution, geography).

 

http://www.ejrcf.or.jp/jrtr/jrtr02/f02_oka.html

[wakeupplease]

20 hours ago, sweatalot said:

I think the lower speed would fit better to Thai safety standards

Safety standards WHERE the hell are they

[wvavin]

Hope the Japanese stand firm on their decision for not getting involved in this project except giving a loan.

[Happyman58]

Slow it down so the subs can keep up More important

 

[Srikcir]

14 hours ago, smutcakes said:

i am not sure what the EEC development agreement between Japan and Thailand is that could be renegotiated, and Japan is not likely to tell private companies to pull out of the EEC.

Aside from loan default provisions in Japan's loan agreement, Japan does have significant potential leverage through Japan's agreements to participate in development of the EEC through Japanese private investment.

 

For the EEC Japanese investment amounts to Bt65-200 billion (E.) for 2017-2018 and projected Bt500 billion in the first five years of the EEC! Note that for 2016 Japan was Thailand's biggest investor, and in 2017 and likely for 2018 Japanese business investments in Thailand will amount to about half of all foreign direct investment (FDI) in Thailand! Investments from Japan ensure that the EEC was not built from scratch, ie.,. using Thailand government/private investment which thus far been virtually nonexistent.

 

So I believe that its within the realm of possibility that Japan can threaten withdrawal from EEC development that is an agreement between the two nations to counter any attempt by the Thai government to default on the high speed train loan without negotiating a restructured loan agreement, ie.., higher interest rate, longer loan term (50 years?), penalty payments, etc. If Japan pulls out of the EEC agreements, is it likely its private investors will continue investing in the development? I think not.

 

 

[smutcakes]

Just now, Srikcir said:

Aside from loan default provisions in Japan's loan agreement, Japan does have significant potential leverage through Japan's agreements to participate in development of the EEC through Japanese private investment.

 

For the EEC Japanese investment amounts to Bt65-200 billion (E.) for 2017-2018 and projected Bt500 billion in the first five years of the EEC! Note that for 2016 Japan was Thailand's biggest investor, and in 2017 and likely for 2018 Japanese business investments in Thailand will amount to about half of all foreign direct investment (FDI) in Thailand! Investments from Japan ensure that the EEC was not built from scratch, ie.,. using Thailand government/private investment which thus far been virtually nonexistent.

 

So I believe that its within the realm of possibility that Japan can threaten withdrawal from EEC development that is an agreement between the two nations to counter any attempt by the Thai government to default on the high speed train loan without negotiating a restructured loan agreement, ie.., higher interest rate, longer loan term (50 years?), penalty payments, etc. If Japan pulls out of the EEC agreements, is it likely its private investors will continue investing in the development? I think not.

 

 

But it is not state agreements, it is investment by private companies which are not controlled by the Government. Unless you are suggesting that if Thailand defaulted on a loan to the Japanese Government, then the Government would tell Japanese private firms not to invest in the EEC. I think that is a bit far fetched.

[thaibeachlovers]

On ‎2‎/‎10‎/‎2018 at 2:19 PM, Classic Ray said:

What you need to factor in is the chance for Thailand to at last develop outside provincial Bangkok. This requires good fast road and rail infrastructure to allow factories and housing to be built throughout the country and agricultural produce, industrial products and passengers to be swiftly transported by rail.

 

The double tracking projects will help with this, and the bullet trains will allow people to live and do business outside Bangkok whilst retaining the ability to quickly travel to the capital.

 

Once the line is downgraded to lower speeds   It has no chance of being improved later at reasonable cost.

 

Thailand needs to bite the bullet now!

Perhaps you never noticed, but Thailand already has factories and housing throughout the country. Lamphun is a place with huge factories and apparently Ayutthaya has one or two such, not even considering the eastern seaboard.

If, as it seems, you want more Bkk atrocities to be built around Thailand, I can only hope you will forever be disappointed. One huge horrible nightmare is enough already.

[thaibeachlovers]

This thread only goes to prove that those of us already said it was never going to happen were on the right track.

[lamyai3]

Perhaps the best thing is for them to manufacture some strap on pointy bullet train attachments for the existing trains. 

[Srikcir]

On 2/10/2018 at 10:49 AM, rooster59 said:

The Japanese have also told ministerial counterparts in Thailand that their financial involvement is in providing loans and nothing else.

Japan rejects calls to invest in Thailand's bullet train

Transport Minister Arkhom Termpittayapaisith: "We have asked (Japan) to come up with solutions to decrease capital investments, in order to minimise debt on our part," he said. "One of the solutions would naturally be a joint investment (between Thailand and Japan)."

Japan: "it will offer loans with low interest rates for the project instead"

http://www.straitstimes.com/asia/se-asia/japan-rejects-calls-to-invest-in-thailands-bullet-train

But like the Chinese high speed train, will Japan then ask for an additional "consulting fee" to cover a lower interest rate because of potential loan default?