Thai politics: How beneficial to us is the railway deal with China?

[webfact]

BURNING ISSUE
How beneficial to us is the railway deal with China?
Sasithorn Ongdee

BANGKOK: -- As expected, the Thailand and Chinese government-to-government deal for the construction of the 867km dual-track electric railway linking the country's Northeast with southern China via Laos was given the preliminary nod by the Cabinet on Tuesday and the agreement is set to be signed next month.

A draft memorandum of understanding has been inked for the 734km Nong Khai-Kaeng Khoi (Saraburi)-Bangkok route and for the 133km Kaeng Khoi-Chon Buri-Map Taphut (Rayong) route.

The trains would operate on a 1.435m gauge with speeds of up to 180km/h.

The routes would be part of the 2,000km Silky Highway linking Asean with southern China and passing through Laos, Thailand, Malaysia and Singapore. The highway that has been over a decade in the making is tantalising close to becoming a reality.

Thailand is set to get two rails systems - the new 1.435m gauge would join the existing metre gauge. There have been rows over this issue in every government for years.

There are still many concerns about the deal, whether it would benefit the country as much as it should.

Transport Minister ACM Prajin Juntong has said several times that it was likely the government would apply an engineering, procurement, construction and financing contract to the deal.

He said that by doing so China would be allowed to invest in its construction while Thailand would be allowed to operate it and then gradually pay back the loan to China over the long term. Thailand would have a 20-per-cent stake in it, he said.

If the project were implemented, it could be used as a model for other routes in Thailand that Japan, German, the UK and France may want to invest in.

But although the ECPF seems to have advantages - the lender and the contractor should be the same person, thus limiting the funding risk and having the project delivered on time with the desired specification.

However, the government should think long and hard about the merits of the contract, especially under a government-to-government deal.

Some experts in the transport sector are concerned that a soft loan usually comes with a condition that results in an influx of contractors and a large number of imported materials linked to the lender.

About 80 per cent of every Bt100 invested in a railway project typically covers construction and the rest is for rolling stocks and signalling systems.

If one looks into who would benefit most from the Thailand-China project, half of each Bt100 would leave Thailand, including money made by construction firms.

Sometimes, the lender's right to develop a project - which is a key driver of economic growth - is contained in the contract conditions.

The government must be asked the question: How many benefits would be left for us?

Source: http://www.nationmultimedia.com/politics/How-beneficial-to-us-is-the-railway-deal-with-Chin-30248747.html


-- The Nation 2014-11-28

[Bluespunk]

How useful would it be?

Well on a scale of 1 to 10 [1 being not very good and 10 as good as it gets], I'd say

Run, run away, run fast, run now, run while you can.........

"When you sup with the devil you need a long spoon", as my old granny may or may not have said.

[NongKhaiKid]

How useful would it be?

Well on a scale of 1 to 10 [1 being not very good and 10 as good as it gets], I'd say

Run, run away, run fast, run now, run while you can.........

"When you sup with the devil you need a long spoon", as my old granny may or may not have said.

A ' lang ' spoon indeed as China's only interest is China as LoS may find out to their cost.

The problem may not be what's in the wording of any contract but the little surprises that China produces along the way with Thailand firmly in their pocket.

[ramrod711]

He said that by doing so China would be allowed to invest in its construction while Thailand would be allowed to operate it and then gradually pay back the loan to China over the long term. Thailand would have a 20-per-cent stake in it, he said.

I guess the Thais should think about revenue from freight, and maintenance costs. If China builds it, Thailand pays for it, and China gets to keep 80% of the revenue while also getting the most benefit from shipping their goods to a closer port, it wouldn't seem beneficial. Perhaps I'm missing something.

[Valentine]

The devil will be in the details. Perhaps the government should look at what China is doing in many African states. There needs to be full transparency to the public on the details of the deal before it is signed. I mean after all isn't this supposed to be what new new government is about.

[taony]

"Thailand would be allowed to operate it".

What i was afraid to read.

[Lee4Life]

The real question that should be asked is " How beneficial to China is the railway deal ? "

[chainarong]

Well firstly you have the Prayuth transparency , with Government to Government agreements , so nothing is transparent, the project is not subject to the correct procedure for tenders, lacking in any modelling or scoping for the project , simply put they haven't a clue as what construction problems there will be encountered and one thing is for sure any expenses for budget blowouts will be met by Thailand, how beneficial depends on whether you use it, how many derailments or will it becomes a monument to B/S.

[BSJ]

Mmmm, China construction material, China construction firm's, China owns 80%, China benefit's 80%+ and Thailand still has to pay back a huge sum of money. I am not seeing a good outcome here for the people of Thailand!

[boomerangutang]

In the overall perspective, modern rail lines are good. Upon scrutiny, however, sticklers appear:

>>> If Thailand has trouble maintaining slow trains, why does it think it will do better with fast trains?

>>> every large municipal project has been rife with corruption. There will be promises in this deal of 'no corruption' but there surely will be.

>>> The Thai gov't is world famous for over-paying. Two recent examples: $17,000 each for digital clocks. $33,000 each for little black plastic boxes which did nothing. Thai military officials had been told for years those boxes were useless, yet kept buying them.

>>> Whether 80 or 90 or 100% of the rail project is financed by Chinese banks, you get one guess who takes possession if there's default on payments. Thailand changes administrations, on average, every 16 months. In the 60 years it may take to pay off the loans with %, there could be 34 different governments. If just one government defaults.....

[whybother]

The railway will be beneficial to Thailand. The deal is a different story.

[johnmcc6]

The real question that should be asked is " How beneficial to China is the railway deal ? "

Should China ever get the idea of taking over it's Asian neighbors to feed it's billion plus population such a rail line would be just as good at moving troops as it would for trade. Just a thought???

[boomerangutang]

There are many more Chinese males than females. Plus, it's expensive for a man to marry in China. If there are tens of millions of Chinese young men looking for wives and girlfriends (and sex), where will some of them go?

[Lupatria]

How useful would it be?

Well on a scale of 1 to 10 [1 being not very good and 10 as good as it gets], I'd say

Run, run away, run fast, run now, run while you can.........

"When you sup with the devil you need a long spoon", as my old granny may or may not have said.

[yellowboat]

The SRT is poorly run. Who in Thailand is capable of running a modern railway? That is probably a detial in the contract and would allow the Chinese greater control should Thailand not be able to fulfill its operational duties.

[dogleg]

Any deal that gets the Chinese closer to the Gulf of Thailand and the Indian Ocean is very good for China and nobody else. IMHO.

[lovelomsak]

Seems everyone is more concerned about the building contract then what it means to Thailand in the long run. It will benefit Thailand greatly. China can produce and ship to Thailand and Thailand can distribute around Asia and the rest of the world. The perfect middleman position. As we all know the US needs Thailand more than Thailand needs and China will use this to their advantage. It will happen and the rich in Thailand shall prosper. Time for some of you to turn the lights on you sit in the dark way to much.

[IAMHERE]

Where would Thailand be if China had good roads down here 500 years ago ?

[yellowboat]

Seems everyone is more concerned about the building contract then what it means to Thailand in the long run. It will benefit Thailand greatly. China can produce and ship to Thailand and Thailand can distribute around Asia and the rest of the world. The perfect middleman position. As we all know the US needs Thailand more than Thailand needs and China will use this to their advantage. It will happen and the rich in Thailand shall prosper. Time for some of you to turn the lights on you sit in the dark way to much.

Agreed, it is a wonderful opportunity. Been following it ever since the highway was put into motion. Regardless of all the foreseeable short comings, this will have a positive effect in the region. Rail has almost always lead to prosperity.

Kunming is a wonderful city which has a very south east Asian disposition. My thinking is that there will be more opportunities in China regarding this than in Thailand.

[nong38]

I high speed line would be beneficial for transporting vast amounts of tourists into the country, if it went where the tourists wanted to go but the line seems to me to be freight orientated and I cannot think where there is another high speed freight line. Freight travelling at 180 kph is higher speed than anywhere I can think of. In the UK many lines are available for up to 200pkh ( 125mph ) but freight is restricted to 80mph (128kph ) I think the reason being I believe is the weight behind the locomotive and the time taken to stop it in an emergency trains with loads over 3500 tons dont stop just like that.

I think it boils down to prestege, by all means build double tracks at standard guage across the country but how many Thai will travel on a High Speed line to LDR/China or Malaysia.

I would prefer China to build it rather Thailand, they have a bit more know how about making things last a bit longer.

[Strangebrew]

Why waste my breath I still working on the thinking behind the rice scam.

[Lupatria]

Seems everyone is more concerned about the building contract then what it means to Thailand in the long run. It will benefit Thailand greatly. China can produce and ship to Thailand and Thailand can distribute around Asia and the rest of the world. The perfect middleman position. As we all know the US needs Thailand more than Thailand needs and China will use this to their advantage. It will happen and the rich in Thailand shall prosper. Time for some of you to turn the lights on you sit in the dark way to much.

Agreed, it is a wonderful opportunity. Been following it ever since the highway was put into motion. Regardless of all the foreseeable short comings, this will have a positive effect in the region. Rail has almost always lead to prosperity.

Kunming is a wonderful city which has a very south east Asian disposition. My thinking is that there will be more opportunities in China regarding this than in Thailand.

Rail has almost always lead to prosperity.

...especially of those in their attempt to loot their colonies.

[lovelomsak]

I understand here when people talk about China being the main benefactor. Why shoud they not be. They are the ones opening the opportunity to Thailand.China is the engine of the Asian economy. It only makes sense they take controlling interests. But Thailands share will be long term and a substancial amount annually.Call it a gravy train if you like. All other nations invest in the industrial and labour end of Thailand. Well this is coming to an end. Thailand cannot keep up or willnot keep up, not sure which. Labour is getting expensive and have to get from bordering countries. So what is left. :Location.The most important thing on the globe. Fast rail,deep shipping ports,strong currency,strong military,available to deal in own currency with asian neighbours,the list goes on.Donot say corruption will end it for them. Corruption is a reality in the world and look how far Thailand has gone already without eliminating corruption. America will wake up one morning and say Gee I never saw that coming.

[Thai at Heart]

He said that by doing so China would be allowed to invest in its construction while Thailand would be allowed to operate it and then gradually pay back the loan to China over the long term. Thailand would have a 20-per-cent stake in it, he said.

I guess the Thais should think about revenue from freight, and maintenance costs. If China builds it, Thailand pays for it, and China gets to keep 80% of the revenue while also getting the most benefit from shipping their goods to a closer port, it wouldn't seem beneficial. Perhaps I'm missing something.

Is this a freight line at 180kmh?

[lovelomsak]

I high speed line would be beneficial for transporting vast amounts of tourists into the country, if it went where the tourists wanted to go but the line seems to me to be freight orientated and I cannot think where there is another high speed freight line. Freight travelling at 180 kph is higher speed than anywhere I can think of. In the UK many lines are available for up to 200pkh ( 125mph ) but freight is restricted to 80mph (128kph ) I think the reason being I believe is the weight behind the locomotive and the time taken to stop it in an emergency trains with loads over 3500 tons dont stop just like that.

I think it boils down to prestege, by all means build double tracks at standard guage across the country but how many Thai will travel on a High Speed line to LDR/China or Malaysia.

I would prefer China to build it rather Thailand, they have a bit more know how about making things last a bit longer.

You bring up a lot of good points. Will be interesting to see how they handle the speed element.

As far as bringing things into the country that is what it is all about. But the things willnot stay long will be distributed rather quickly throughout the world. The other benefit is Thailand is becoming the food basket for China (yes I know it will drive up food costs for Thais) ,this fast rail will supply the fresh product quickly for China,s markets.So the rail will never run without freight,in either direction.

[Ulic]

Mmmm, China construction material, China construction firm's, China owns 80%, China benefit's 80%+ and Thailand still has to pay back a huge sum of money. I am not seeing a good outcome here for the people of Thailand!

All correct but what you have to remember as in Africa, the local Mr Bigs get the skim as partners brokering

the deals with the Chinese companies.

[bangon04]

The real question that should be asked is " How beneficial to China is the railway deal ? "

Should China ever get the idea of taking over it's Asian neighbors to feed it's billion plus population such a rail line would be just as good at moving troops as it would for trade. Just a thought???

it worked for the Japanese.... come to think of it, isn't the current Thai railway system largely the legacy of the Japanese "investment" in the 1940s?

Certainly feels like it.

[ramrod711]

He said that by doing so China would be allowed to invest in its construction while Thailand would be allowed to operate it and then gradually pay back the loan to China over the long term. Thailand would have a 20-per-cent stake in it, he said.

I guess the Thais should think about revenue from freight, and maintenance costs. If China builds it, Thailand pays for it, and China gets to keep 80% of the revenue while also getting the most benefit from shipping their goods to a closer port, it wouldn't seem beneficial. Perhaps I'm missing something.

Is this a freight line at 180kmh?

I don't know, I hope so, because I can only think of one other reason China would want a railway all the way to Singapore, and it isn't tourism.

[boomerangutang]

Seems everyone is more concerned about the building contract then what it means to Thailand in the long run. It will benefit Thailand greatly. China can produce and ship to Thailand and Thailand can distribute around Asia and the rest of the world. The perfect middleman position. As we all know the US needs Thailand more than Thailand needs and China will use this to their advantage. It will happen and the rich in Thailand shall prosper. Time for some of you to turn the lights on you sit in the dark way to much.

Agreed, it is a wonderful opportunity. Been following it ever since the highway was put into motion. Regardless of all the foreseeable short comings, this will have a positive effect in the region. Rail has almost always lead to prosperity.

Kunming is a wonderful city which has a very south east Asian disposition. My thinking is that there will be more opportunities in China regarding this than in Thailand.

In the 1940's, the Japanese expanded their dominance throughout SE Asia via force.

In the 2000's, the Chinese want to do it under the guise of commerce.

Speaking of 'opportunity' ...that's nice to view the glass as half-full rather than half-empty.

Look at how the Chinese politburo are behaving in Tibet (military occupation), towards Taiwan (200 missiles aimed), towards Japan (want that island), Philippine and Vietnamese islands (sending in navy ships and building airstrips).

In the S.China Sea, China doesn't want any group discussions or any UN involvement or reference to laws or legal/historic precedence. With the Mekong River, they're building 8 giant dams upstream and they're not even members of the Mekong River Commission, so they don't have to adhere to any of the silly guidelines cobbled together by those little SE Asian countries.

They're like a 600 lb wrestling opponent. All they have to do is lean, and keep on leaning, and the smaller guy will be wind up falling over and getting crushed from the weight.

Thailand should pay what it can afford for a double track moderately fast train system. It's acting like a guy in a modest house with unpaid bills backed-up, who wants a new top-of-the-line BMW. It goes to the biggest baddest guy on the block to borrow 2.5 trillion baht. The big guy will own 80% of the car until/if it's paid off with % in 66 years. Good luck Thailand. The country which continued to buy worthless little black boxes for $33,000 each when every other country in the world had long realized the boxes were worthless.

[baboon]

The SRT is poorly run. Who in Thailand is capable of running a modern railway? That is probably a detial in the contract and would allow the Chinese greater control should Thailand not be able to fulfill its operational duties.

I think a shoestring budget is probably more a factor than competence in this regard. I know a good few railwaymen who honestly want to deliver a service to be proud of, but are constantly ordered to make do with shoddy / outright dangerous equipment. Give the staff a bit of a break, here. Many are doing their best under difficult circumstances.