SRT told to conduct more feasibility study on Thai-Chinese train project

[webfact]

SRT told to conduct more feasibility study on Thai-Chinese train project

 

 

BANGKOK: -- The Transport Ministry has rejected the Thai-Chinese high-speed train project between Bangkok and Nakhon Ratchasima due to incomplete feasibility study.

 

State Railway of Thailand acting governor Mr Anont Luangboriboon said the Transport Ministry wanted the SRT to conduct additional feasibility study on several scenarios such as how much impact on the SRT’s revenue if passengers are below target by 10 percent or what will the SRT do if passengers are below target by 20 percent.

 

He said that SRT must complete the additional study and submit its findings to the board for approval before the project is to be submitted to the cabinet for endorsement.

 

Full story: http://englishnews.thaipbs.or.th/srt-told-conduct-feasibility-study-thai-chinese-train-project/

 

-- © Copyright Thai PBS 2017-05-04

[Ricardo]

But the main revenue-stream from the medium-speed heavy-freight project must surely come from the Chinese freight-for-export, being sent from southern-China down to the Thai ports, the whole question of using the same line for a few add-on medium-speed domestic-passenger trains is surely secondary !

 

The key questions should be, who bears the losses if the freight fails-to-materialise, and how to structure the whole deal so that China pays most of the capital-cost of building this line ?  Either one of those ought to be a deal-breaker, regardless of the tempting brown-envelopes, and regardless of whoever is in-power at-the-time !

 

Without their active support & involvement, this whole project is probably a non-starter, and always was  ...  which is why it has taken two decades to get this far !

 

And I do wish the Thais would stop calling it  "the Thai-Chinese high-speed train project between Bangkok and Nakhon Ratchasima",  that is misleading both as to speed and to its main purpose.  OK its looks good, for domestic-PR, it makes it look like a Thai project rather than something for foreigners which merely needs to run across Thai land, but it's still a misnomer !

Edited May 3, 2017 by Ricardo

[Bob12345]

Quote

due to incomplete feasibility study

Translation: on second thought, the envelope was a bit light.

[Srikcir]

Construction is to begin in September and NOW we hear that there is an incomplete feasibility study?

 

In July 2016 , Chinese officials reported that the softness of the soil in the area of the 11-kilometer second portion of the route from Pak Chong Station to Khlong Khanan Chit Station would be difficult for rail construction. This may require changing the course of the tracks. Has this been redesigned and re-evaluated with another feasibility study?

 

Finally, the government sought Chinese financing estimated at 179 billion baht for all four sections of the Bangkok-Nakhon Ratchasima route. The Chinese want loans (good for China's GDP growth rate) in yuan at an interest rate of 3.2% whereas Thailand wanted 2%. Has this been finalized yet or just let China build the line and negotiate price later?

 

What a mess.

 

[Srikcir]

7 hours ago, Ricardo said:

But the main revenue-stream from the medium-speed heavy-freight project must surely come from the Chinese freight-for-export

Rational but not what the Thai government claims in connection with the train from Bangkok to Nakhon Ratchasima :

 

"[Transport Minister] Mr Arkhom reaffirmed the government’s faith in the project stating that they were worth the cost as projections have revealed that 60% of revenues will be generated from real estate and commercial developments along the routes while the remaining 40% will come from passenger fares."

http://englishnews.thaipbs.or.th/bangkok-korat-high-speed-train-project-go-ahead-despite-call-revise/

So no freight on this segment?

[Ricardo]

25 minutes ago, Srikcir said:

So no freight on this segment?

 

That does seem an odd omission, doesn't it ? 

 

I'm not sure how the fact that medium-speed heavy-freight trains pass by at-speed along the route, creates opportunities away from the stations or port or major-interchange outside Bangkok.  Perhaps the numbers failed to add-up, so they quietly left them out ?

 

If the Chinese are the main investors in this series of linked-projects, only one of which is the Thai-line to outside-Bangkok & Laem-Chabang & the Eastern Seaboard, then they have a clear motive for actually using it at a level which generates at-least break-even.  It would be in their commercial interests to direct traffic down this line.

 

If they merely lend (at whatever interest-rate) to Thailand, on a government-to-government basis, and they then find that overall export-volumes grow less-quickly than forecast, they might have no obligation to send the containers down this particular route, instead of to their own less-busy-than-expected ports.

 

So Thailand could in-that-event be left holding the financial baby.

 

I agree that there may well be massive speculative profits to be made, from owning/developing land along the medium-speed route, indeed part of the delay in-the-past might have been explained by the need for the right people to acquire land in the best spots, over the past several years.  Or am I cynical ?

 

I wonder whether there are any plans to create new Tax-Free-Zones, or even a new province (as was once planned for Swampy), near the port or the potential north-of-Bangkok inter-change ?

 

But whether enough of those benefits accrue to the government, rather than to private property-investors, to justify the Thai government going ahead and carrying all the risk of financing construction, well that might be a tad oprimistic IMO.

 

Perhaps I'm being a cynical accountant, who lacks faith that everything will go as-envisaged, and doesn't understand how these things are done here, I shall however countinue to observe with interest ! 

 

 

[colinneil]

The feasibility study is just to make sure that the bigwigs at SRT get a bigger brown envelope.

[Ricardo]

16 minutes ago, colinneil said:

The feasibility study is just to make sure that the bigwigs at SRT get a bigger brown envelope.

 

Are you a fellow cynical accountant, perhaps ?

[Stargeezr]

Ricardo I totally agree with you, I think that it is all abot the brown envelopes, that did not get into enough Thai hands  or the envelopes were

deamed not to be big enough yet.

Geezer

[ChrisY1]

As has been proven so often, the SRT is absolutely useless and should be all swept away.

But of course, who would replace them....everyone here is cast with the same mould!

 

[Ricardo]

1 hour ago, ChrisY1 said:

As has been proven so often, the SRT is absolutely useless and should be all swept away.

But of course, who would replace them....everyone here is cast with the same mould!

 

 

IIRC they tried that, replacing the entire Board of the SRT, only a couple-of-months ago.

 

http://englishnews.thaipbs.or.th/pm-orders-purge-srt-governor-board/

 

Unfortunately it doesn't seem to have fixed the problem.

 

This is a major regional-project, with long-term implications for the Thai-economy & government-debt, trying not to get lumbered with the bulk of the risk on the Thai-section of the new medium-speed freight-line, but while also deriving whatever potential benefits there might be for the country.

 

Which I'd say (but what do I know ? I freely admit I'm an observer, not an expert) fall into three main parts :-

 

1.  Getting some of the gravy (jobs & turnover) on the actual-construction, and later the ongoing-operation, of the link.

2.  Enabling the easier movement of Thai agricultural-products & manufactured-goods, where competitive, northwards to China.

3.  Lastly & least-importantly, Improving the domestic movement of passengers, on this route.

 

It would be wrong for short-term local gains, from land-investments & property-development along the route, to cause the decision-makers to lose sight of the wider implications of the scheme. 

 

There are also threats involved, for example the possibility of increased-imports of cheaper/poorer-quality goods from China, impacting on Thai industry.  Just how globally-competitive is Thai manufacturing  ...  they might find out, the hard way, as did the Western countries !

 

The creation of a freight-interchange just North of Bangkok, feeding into the gradually-expanding double-track meter-gauge SRT-system, will enable imports streaming down the medium-speed line to flow to most other parts of Thailand, or indeed (a long-term gain if it happens ?) all-the-way down to Malaysia & Singapore.

 

So it's not just about China wanting a new link to the ports, an extra option for their exports, to the World.  Although that does make sense IMO.

 

You're right, this sort of decision demands the brightest brains which Thailand can muster, to ensure that Thailand doesn't end up paying for something which damages the overall economy, are the SRT or Ministry of Transport up-to-it ?

 

Edited May 5, 2017 by Ricardo