Ex-minister Korn warns govt of heavy financial burden from Bangkok-Korat train project

[webfact]

Ex-minister Korn warns government of heavy financial burden from BKK-Korat train project



BANGKOK: -- Former finance minister Korn Chatikavanich today (Monday) warned the government that its decision to go it alone with the Bangkok-Nakhon Ratchasima medium-speed train would cause a heavy financial burden to the state.

In his letter addressed to Prime Minister Prayut Chan-ocha, the former Democrat MP also voiced his skepticism over the State Railway of Thailand’s capability to implement and operate the project.

However, Mr Korn made it clear that the Democrat party is supportive of investment in the development of infrastructure projects and the party, while serving in the government, proposed joint investment between Thailand and China to develop high-speed train project in Thailand.

Lately however, the government decided to go it alone to implement the project, initially with the Bangkok-Nakhon Ratchasima medium speed train project, without China’s investment participation.

Even if the project will be economically beneficial to the country, Mr Korn warned that the government would sustain heavy loss in operating the system and this would pose a financial burden to the country.

While expressing his doubt over the SRT’s capability to implement and operate the system the former finance minister suggested that the government should reform the SRT first so as to build up public confidence in the organization.

He suggested the government to attach importance to development of logistic system such dual track rail system, more motorways and special inter-provincial highways to facilitate cargo transportation.

Source: http://englishnews.thaipbs.or.th/content/157150


-- Thai PBS 2016-03-29

[jabis]

Someone derailing the money train here?

[jamesbrock]

Wait, it's a medium speed train now?

[Ricardo]

Good that he speaks out, and says what many others must be thinking, that as a stand-alone project it's a no-win no-hope no-do scheme ?

[craigt3365]

I don't think Thailand is ready for a high speed train. Even a country like France is having problems with profitability. Most Thais prefer the very cheap modes of transport. Who can afford an expensive high speed train ticket?

They'd be better off putting in a good system of trains, make the roads better, etc.

The problem with the Chinese involvement was all the strings attached. Obviously, all in favor of China.

[chainarong]

Wait, it's a medium speed train now?

So I noticed, Kun Korn would have a better Idea than the clowns in the circus

[MaiChai]

Wait, it's a medium speed train now?

Yup, and not to China but nakorn ratchasima.

[chainarong]

One wouldn't expect anything to happen at all , the good Prayut - O - Cha accidently picked up a users guide on how to run a country by the PTP, Chapter 2 "Feed them B/S" , Khun Korn need not worry, the next announcement will be a face saving rail project going from fast track to no track, due to economic downturn Bla Bla Bla .....................................................

[tomacht8]

Korn is one of the few capable politicians thailand has, and in this train case he is right again.

[klauskunkel]

While expressing his doubt over the SRT’s capability to implement and operate the system the former finance minister suggested that the government should reform the SRT first so as to build up public confidence in the organization.

SRT: How dare this has-been ex-something, and he's not even a general! Of course, we are highly capable of making money off this project (for our families and friends)

[trogers]

SRT and their Airport Link line is already a good example of capabilities and profitability.

Now, multiply the present state of affairs by 30.

[meatboy]

Wait, it's a medium speed train now?

with? wait for it MINI BUS DRIVERS at the helm.

[Srikcir]

Korn is right on so many points.

Both Democrats and PTP also proposed a joint venture with China on the Dual Rail project that Prayut has decided to borrow funds from the Chinese. In a joint venture Thailand shares the risk of cost overruns and loss of profits with a foreign and/or domestic businesses. But on the Dual and Nakhon Rail projects Thailand is exposed to 100% of the risk for project overruns, maintenance costs and overall profitability.

But I believe that China wants no part of the project risks now because of its own priority for domestic market capital and concerns about Thailand's economic sustainability. On the other hand Prayut seems compelled to showcase these projects as accomplishments of his regime. And where military reputation is concerned, no price is too high.

[craigt3365]

Korn is right on so many points.

Both Democrats and PTP also proposed a joint venture with China on the Dual Rail project that Prayut has decided to borrow funds from the Chinese. In a joint venture Thailand shares the risk of cost overruns and loss of profits with a foreign and/or domestic businesses. But on the Dual and Nakhon Rail projects Thailand is exposed to 100% of the risk for project overruns, maintenance costs and overall profitability.

But I believe that China wants no part of the project risks now because of its own priority for domestic market capital and concerns about Thailand's economic sustainability. On the other hand Prayut seems compelled to showcase these projects as accomplishments of his regime. And where military reputation is concerned, no price is too high.

The snag was inclusion of rice and rubber deals into the contract. And a high interest rate by the Chinese.

http://thediplomat.com/2015/12/china-thailand-sign-rail-rice-and-rubber-deals/

[taony]

They need something to replace Hopewell, so why not go bigger. Bts is being extended alongside Hopewell so it's not so prominent anymore.

[Eric Loh]

Korn is right on so many points.

Both Democrats and PTP also proposed a joint venture with China on the Dual Rail project that Prayut has decided to borrow funds from the Chinese. In a joint venture Thailand shares the risk of cost overruns and loss of profits with a foreign and/or domestic businesses. But on the Dual and Nakhon Rail projects Thailand is exposed to 100% of the risk for project overruns, maintenance costs and overall profitability.

But I believe that China wants no part of the project risks now because of its own priority for domestic market capital and concerns about Thailand's economic sustainability. On the other hand Prayut seems compelled to showcase these projects as accomplishments of his regime. And where military reputation is concerned, no price is too high.

The snag was inclusion of rice and rubber deals into the contract. And a high interest rate by the Chinese.

http://thediplomat.com/2015/12/china-thailand-sign-rail-rice-and-rubber-deals/

I think there are more than meet the eyes including the rubber and rice snags. China need the train connectivity for their land-locked south and south-west provinces and also as part of the grand trans-asia train network. There are much trade benefits for these provinces to ASEAN countries. The full reasons are not revealed but from the typical brinksmanship tone of Prayuth, I think it bore down to the poor negotiation junta team. Generals don't make good trade negotiators.

[kennw]

Try to be less pessimistic and critical, could it be that negotiating strategy is involved. China would be a major beneficiary if the line were connected to Nong Khai and on to China, but it seems they demanded too many conditions for their involvement. By taking the line only to Korat there is no benefit to China (except sale of equipment etc). Thailand on the other hand would gain experience and a system. So,lets wait and see if China comes back with a less demanding offer.

[tuanku]

Someone has told Prayuth that it is a primary function of his style of government to "make the trains run on time"

I suggest extending the airport link to Rayong via Chonburi and Pattaya would make a lot more sense, provided they get the trains to work! At least that line would have plenty of customers.

[craigt3365]

Someone has told Prayuth that it is a primary function of his style of government to "make the trains run on time"

I suggest extending the airport link to Rayong via Chonburi and Pattaya would make a lot more sense, provided they get the trains to work! At least that line would have plenty of customers.

It would take more than trains. Once passengers got off in Pattaya, how would they get to where they want to go? In the back of an overcharging baht bus? LOL

Mass public transport is desperately needed here.

P.S. a friend went to Bangkok last Sunday. He measured it, and the line at one toll both was a bit under 6km long! This was after the Pattaya Music Fest, so traffic was heavy.

[Ricardo]

Korn is right on so many points.

Both Democrats and PTP also proposed a joint venture with China on the Dual Rail project that Prayut has decided to borrow funds from the Chinese. In a joint venture Thailand shares the risk of cost overruns and loss of profits with a foreign and/or domestic businesses. But on the Dual and Nakhon Rail projects Thailand is exposed to 100% of the risk for project overruns, maintenance costs and overall profitability.

But I believe that China wants no part of the project risks now because of its own priority for domestic market capital and concerns about Thailand's economic sustainability. On the other hand Prayut seems compelled to showcase these projects as accomplishments of his regime. And where military reputation is concerned, no price is too high.

The snag was inclusion of rice and rubber deals into the contract. And a high interest rate by the Chinese.

http://thediplomat.com/2015/12/china-thailand-sign-rail-rice-and-rubber-deals/

Also that, as the global-economy slows & China's exports grow less-strongly, China's need for extra links to the ports also falls. They can afford to wait, indeed they should now wait, until it becomes clear whether there will be sufficient traffic after all, to fill the line.

After all the original plans, to run freight all the way down to Singapore, have already been put back into the distant future, if not totally forgotten.

Thailand doesn't need this line to China, although there should be marginal benefits for Thai-exports northwards & domestic passenger-links, but only if they don't have to put in too much towards getting it built.

It would have been a sweet deal for China, if the Thai section of the link to Laem Chabang were to be built, totally at someone-else's expense ! They would then have been in a strong position, when it came to negotiating rates for using it, and how much volume to put down that route.

[trainman34014]

The Pumpkin will have a tantrum if anyone dare challenge his plans for his big train set. He took his wife to ride on them in Japan and China and promised he would build her one as his legacy to almighty Thailand !

I sense a case of 'Attitude Adjustment' coming on.

[Duncan Donut]

There were 2 Fiji Islanders walking down the road. One turns to the other and says

"B'jaysus Paddy, shure we can build dat dere railroad for dat General fella in Thailand. You start laying tracks at Bangkok. I'll start laying tracks at Nakhon Ratchasima, and we can meet in the middle."

"Begorra that's grand, Seamus, but what if we don't meet in the middle?"

"Well <deleted> it, he'll get two for the price of one!"

[natway09]

Overhaul the SRT,,,,, We have been saying that for years. Scrap & start again.

The most corrupt, badly managed Government Department in Thailand.

Do not let them manage anything that moves faster than 90km per hour, they will just kill people,

A good double track standard train system to Laem Chabang (mainly freight) continuing to Pattaya & beyond would be a great step.

Then repeat this to Chiang Mai.& Nakhon Rachasima .

[TheCruncher]

Another one added to the "attitude party" invitation list

[chainarong]

Korn is right on so many points.

Both Democrats and PTP also proposed a joint venture with China on the Dual Rail project that Prayut has decided to borrow funds from the Chinese. In a joint venture Thailand shares the risk of cost overruns and loss of profits with a foreign and/or domestic businesses. But on the Dual and Nakhon Rail projects Thailand is exposed to 100% of the risk for project overruns, maintenance costs and overall profitability.

But I believe that China wants no part of the project risks now because of its own priority for domestic market capital and concerns about Thailand's economic sustainability. On the other hand Prayut seems compelled to showcase these projects as accomplishments of his regime. And where military reputation is concerned, no price is too high.

The snag was inclusion of rice and rubber deals into the contract. And a high interest rate by the Chinese.

http://thediplomat.com/2015/12/china-thailand-sign-rail-rice-and-rubber-deals/

I think there are more than meet the eyes including the rubber and rice snags. China need the train connectivity for their land-locked south and south-west provinces and also as part of the grand trans-asia train network. There are much trade benefits for these provinces to ASEAN countries. The full reasons are not revealed but from the typical brinksmanship tone of Prayuth, I think it bore down to the poor negotiation junta team. Generals don't make good trade negotiators.

Generally , Generals don't run countries very well either , there has been a few exceptions that come to mind through history, but none come from Asia.

[Ricardo]

Overhaul the SRT,,,,, We have been saying that for years. Scrap & start again.

The most corrupt, badly managed Government Department in Thailand.

Do not let them manage anything that moves faster than 90km per hour, they will just kill people,

A good double track standard train system to Laem Chabang (mainly freight) continuing to Pattaya & beyond would be a great step.

Then repeat this to Chiang Mai.& Nakhon Rachasima .

Laem Chabang to Chachoensao was one of the first parts, of the SRT's 20-year meter-gauge track-doubling program, to be completed. I saw them working on it, some five years ago.

From the number of new small stations also being constructed, it appeared that the SRT also plan to run some sort of enhanced passenger-service, on this route.

Whether (as seems obvious) these might run as far as Pattaya or Swampy & the Bangkok-suburbs remains a good question !

Or has anyone heard more-recent information ?

[gemguy]

Come on....we all know the project will be approved as there are millions of dollars to be made by the people that initiate and administer the project.

The way it works here is such that many people in positions of authority or influence or power and position will make a tidy sum off the project even before it is approved...so they really do not care if it gets approved before the final budget is approved and construction starts.

However.....If and when the construction starts, then there are much larger amounts of money to be made by the same people and the others involved in the actual engineering and construction who have previously jockeyed for position in anticipation of the project that they will help promote to get it kicked off as it is in their best interests

Believe me it will not happen if all those people ( you know who I mean ) do not clearly assert their power or authority over the project and make everyone else acknowledge their controlling hand over the project and the most important part ...just how much minimum amount of money they will receive from the project....or it will not go ahead.

They will make some money from it whether it goes ahead or not...but when it does they will be there to milk it for all they can in some standard ways, as per usual, and then some clever ways relevant to the project and all the lucrative aspects of everything entailed in the project.

Such as, the obvious one that every big government project entails: The land located on the route and where that route that will finally be determined......if you are in the know, so to speak...big bonus...big bucks to be made.

Just imagine, they are now jockeying for position to start looking at and assessing the land along the route and how cheaply they can buy it ( or force the people to sell ) and then sell it back to the project...especially land around the designated stations where the price of the land will sky rocket......just for example.

There is far more...but you get the point ..right.

Standard operating procedures under any government administration.

Cheers

[craigt3365]

An interesting read from a few years ago. Especially the part about the ticket prices. Nobody will pay that kind of money.

http://www.thaivisa.com/forum/topic/629544-thai-govts-train-project-will-only-benefit-the-rich/

And since this project has been planned for some time, land speculators have already been busy buying up property along the route. Especially those with advanced notice.