Thai govt urged to ask Chinese to share cost of railway

[webfact]

Govt urged to ask Chinese to share cost of railway
PIMNARA PRADUBWIT
THE NATION

BANGKOK: -- THE GOVERNMENT should review its plan to borrow money from China to finance the electric-railway project between Bangkok and Nong Khai, a former finance minister and Democrat Party MP has said.

Korn Chatikavanij said the government should enter a joint venture with China rather than shoulder the full financial burden on its own.

According to a memorandum of cooperation between the two countries, the Thai government would borrow the money to finance the project, not enter a joint venture with Beijing.

"I want to see a joint venture between the Thai and Chinese governments, as it will be difficult to get a return on investment from some parts of the line," Korn said.

An August deadline has been set to finalise the structure of financing before the first phase of construction starts in October.

The railway project was first planned by the Democrat Party government under Abhisit Vejjajiva in 2010. But the original memorandum of understanding signed by the two governments called for a joint venture to develop the line.

Korn said the government should seek a way to reduce the country's burden by persuading those who might benefit from the project to share the burden.

The Bangkok-Nong Khai rail line is strategically essential to China, he said. If Thailand did not carry on the line in the South, the Kunming-Singapore route could not be initiated successfully.

"China has the financial clout and it expressed its readiness to embrace the investment in the project in the past. Hence I would like the government to reconsider the arrangement," he said.

The Bangkok-Nong Khai rail line is expected to be 873 kilometres in length with dual tracks and a 1.435-metre gauge.

Korn said transport mega-projects in the past had a tendency to go over budget, an extra burden the taxpayers had to bear. "If the government opts for a 100-per-cent loan, the people will also bear 100 per cent of that burden."

Optimum benefits

On the other hand, China will get optimum benefits from the rail line in terms of construction contracts and the sale of rail equipment and rolling stock.

At the same time, if the government claims the project would help develop the property market along the railway route, which means the property sector will benefit while pushing the cost burden on to the people.

Korn also said the high-speed-rail project between Bangkok and Chiang Mai, to be built with the cooperation of the Japanese government, would not be worth the investment, as it would take 300 years to break even.

Source: http://www.nationmultimedia.com/business/Govt-urged-to-ask-Chinese-to-share-cost-of-railway-30262379.html

-- The Nation 2015-06-16

[Bluespunk]

"Korn Chatikavanij said the government should enter a joint venture with China rather than shoulder the full financial burden on its own."

It's your toy, you pay for it.

[davehowden]

Yeah, well good luck with that idea matey.

So you want the Chinese to part fund it and then presumably; unless you overlooked this small detail; to also pay to use it!

As for the Bangkok ~ Chiang Mai route didn't Yingluck already design the lunch boxes?

[khwaibah]

"electric-railway project between Bangkok and Nong Khai, Since when is it electric?

[soalbundy]

Thai-Chinese joint venture, i don't know if that's a good idea, shoddy goods with lousy maintenance, what could go right.

[Daniel Boon]

If the Chinese enact their transmigration policy (a la Tibet), then of course they should pay for at least half ...

[Emster23]

Dire Straits came to mind: "Look at them yoyos.... that's the way ya do it.... money for nothing and the chicks for free"

[Jimlove]

Look foreward to hear the answer (laugh) from the Chinese ...

[Srikcir]

The joint venture is a pathetic idea from China's perspective.

As an equity holder in the rail facility, its return on investment depends on the operation and maintenance of the line. China would assume a larger risk and, thus, would expect a much larger return on the order of 10%-15% versus the 2%-4% it would get as a lender.

As a lender China's return merely depends on Thailand's ability to merely pay the loan. If the treasury cannot meet its debt oblligations, it issues more treasury bonds to generate capital to pay the debt.

If China agrees to a joint venture (implies a 50%-50% ownership), it will be due to additional concessions by the Junta that will not be made public.

There is no reason the Junta cannot finance the entire cost of the railway. It would provide a substantial stimulus to the nation's GDP growth rate. Albeit, if the Junta were a caretaker government under the 2007 Constitution, it would be prevented from entering into such loans. The Interim Charter makes no constraints on the Junta.

As it is the Junta is rapidly entering into a handful of foreign borrowing arrangements for Thailand's infrastructure development that could in the cumulative bind the next government financially from implementing any of its own developments. And maybe that's the ultimate goal of the Junta.

[Muhendis]

Whilst Bangkok would be an interesting destination for chinese goods and tourists the real target is straight through Thailand and Malaysia to Singapore. That being the case I think China should make a significant contribution to the construction.

[Mudcrab]

The Bangkok-Nong Khai rail line is strategically essential to China, he said.

And.........?

[ratcatcher]

"electric-railway project between Bangkok and Nong Khai, Since when is it electric?

It would be electric if the power for the locomotives was drawn from catenary, i.e. overhead wires, regardless of whether so-called High Speed (HST) or a regular fast railway system.

https://en.wikipedia.org/wiki/Overhead_line

[wabothai]

A former finance minister said, I wonder why.

[cloudhopper]

"I want to see a joint venture between the Thai and Chinese governments, as it will be difficult to get a return on investment from some parts of the line," Korn said."

lol and this guy was a finance minister?

[IAMHERE]

China can own the rails but not the land the rails are laid on. Well, for 30 years anyway, right?

[Muhendis]

China can own the rails but not the land the rails are laid on. Well, for 30 years anyway, right?

Does that mean the rails have to do 90 day reporting??

[khwaibah]

"electric-railway project between Bangkok and Nong Khai, Since when is it electric?

It would be electric if the power for the locomotives was drawn from catenary, i.e. overhead wires, regardless of whether so-called High Speed (HST) or a regular fast railway system.

https://en.wikipedia.org/wiki/Overhead_line

There has been no mention of this or other proposed lines being electric sooooo, where does this article get its information from.

[baboon]

I do hope for their own sake, important people in Bangkok aren't gathering over drinks and forming a plan to shaft the Chinese somewhere down the line like they did with Carlsberg, or they could be in for a shock...

[DogNo1]

I think that the palms are already greased and that Thailand will shoulder the full cost with money borrowed from China. A former Thai Railway official has stated that the passenger base does not exist to pay for passenger train operation and it is doubtful that shippers will be willing to pay for high - speed freight trains. The line will probably be a huge win for China at the expense of the Thai taxpayers unless, of course, Thailand defaults on its repayment of the loan. Time will tell.

[Basil B]

I do not think the Chinese would be interested in a electrified line.

The tank crews might get electrocuted.

Edited June 16, 2015 by Basil B

[Thai at Heart]

Still a little beyond me why Thailand even needs a loan to finance this. Is it 200bn USD in forex yet.

[ExPratt]

"electric-railway project between Bangkok and Nong Khai, Since when is it electric?

It would be electric if the power for the locomotives was drawn from catenary, i.e. overhead wires, regardless of whether so-called High Speed (HST) or a regular fast railway system.

https://en.wikipedia.org/wiki/Overhead_lin

Yep pretty much All conventional modern Railways are electric either OCS or 3 rd rail for Metro,

[thailand49]

Former MP, this is why you are the fomer!

Thailand is doing the right thing,,, you do not want China to foot some of the bill... later they will want more in return... you do not want to sleep with China Long term!

[Ricardo]

The freight-line through Laos to Laem Chabang & Map-ta-phut is basically to serve China's economic-interests, whatever small benefit there might also be for Thai-exports north-wards or for improving domestic passenger-services, so of course the Chinese should be bearing the bulk of the cost of financing/building it !

Thailand contributes the land, and might reasonably be expected to pay for any passenger-related facilities, but then comes the real problem of letting foreigners build/operate/own something within Thailand.

Which goes against normal Thai practice, in a Thai-centric non-regional/international/global world, and also reduces the opportunities for brown-envelopes ... hence perhaps the need for Thais to get involved, as seen over several administrations.

It's always interesting to see (just a bit of) the jostling surrounding a major infrastructure-project like this.

[natway09]

Slow down Mr PM.

Lets get the SRT up & running first properly before rushing off spending millions on modern railways that may or not be needed.

Would be great to get a decent freight train from Bangkok to Laem Chabang which could take 1,000+ heavy trucks a day off the roads.

Oh sorry, what was that, Oh your brother runs a transport Co, silly me

[spidermike007]

Thai-Chinese joint venture, i don't know if that's a good idea, shoddy goods with lousy maintenance, what could go right.

You might want to consider educating yourself on this topic. The Chinese have some real state of the art trains. Have you seen the Thai trains lately? Last updated in 1961.

[ExPratt]

Spidermike. i believe their Rolling stock has improved , its not all really theirs though they took a lot from The Germans and South Koreans

I was there 05-08 in the relatively early Chinese High speed days , when it was all about how quickly China could build High Speed which resulted in some areas of Wuhan- Guangzhou and X'ian - Zhengzhou having speed restrictions placed on Commissioning. My mate is still their and since the ex Minister of Railways was Jailed they are pushing for quality more than schedule . At the start they made some bizarre copies of German Rheda sleepers and fasteners. High speed sleepers and fasteners have to have and adjustment system in them to allow , track/Gauge to be adjusted . The sleepers the Chinese developed were useless for survey and adjustment , Had to remove everything from the rail foot , thus losing your Zero , which was given by some very expensive surveying equipment. They have learned now though

Edited June 21, 2015 by ExPratt