Rail mega-project could provide the economy much-needed stimulus

– Thailand news selected by Gazette editors for Phuket’s international community

PHUKET: The state railway mega-project recently given the green light in part is expected to offer the economy a much-needed lift, while the funding sources could range from banks and public-private partnerships to an infrastructure fund.

“The investments would be the lead stimulus while consumption, exports and the recovery of tourism during the high season would play a secondary role in the stimulation of the economy,” Sukit Udomsirikul, managing director of the research department at Maybank Kim Eng Securities (Thailand), said yesterday.

The ruling regime on Tuesday approved eight dual-track routes worth Bt858.7 billion as part of the eight-year transport development plan from 2015-22. The bulk of the budget, at Bt741.4 billion, was for two “high speed” rail routes running electric-driven trains at a speed of up to 160 kilometres per hour.

The 737km Nong Khai-Map Ta Phut route will cost Bt392.5 billion and the 655km Chiang Khong-Ban Phachi route Bt348.8 billion.

They would link up with networks in southern China, Laos, Malaysia and Singapore to facilitate expansion in trade and investment in the region.

Air Chief Marshal Prajin Juntong, deputy chief of the ruling National Council for Peace and Order and head of economic affairs, takes the lead of the panel supervising the project and is expected to spend a month finalising the sources of funds.

Sukit said that from now on economic growth would be mainly driven by public spending, as it is now clear that the Bt2.4-trillion infrastructure plan proposed by the now-ousted elected government will go ahead as expected. The government’s spending plans have become clearer and budget disbursement has been smoother since the NCPO came to power, he claimed.

“We have heard that the Bt2.4-trillion infrastructure scheme along with other projects will probably be commenced this year. About Bt80 billion will be spent this year and some Bt300 billion in 2015, and these are the main funds that will drive and stimulate the economy in the years to come,” he said.

Ruth Banomyong, director of the Centre for Logistics Research at Thammasat University, said the rail-system development would boost the economy, especially investment and consumption, driven by new property developments along the routes. The development plan should be complete as a whole package, including the second and third construction phases, he said.

For example, the standard gauge of 1.435metres should be adopted for all routes to be constructed in the remaining phases. The commuter trains should also be concerned about electricity supply.

Samart Ratchapolsitte, a former Democrat Party-list MP who is keen on the transportation, said the two high-speed train projects were too expensive at Bt532.66 million per kilometre.

Soithip Traisuth, permanent secretary of the Transport Ministry, said on Tuesday, citing a study, that the ministry would find ways to lower the construction cost of the dual-track rail system to between Bt350 million and Bt400 million per kilometre from between Bt500 million and Bt600 million. The Office of Transport and Traffic Policy and Planning will conduct a feasibility study next year before construction in 2016, she said.

The six dual-track routes using a one-metre gauge will receive a total construction budget of Bt117.4 billion. They are the 185km Jira junction (Nakhon Ratchasima)-Khon Kaen route, 167km Prachuap Khiri Khan-Chumphon route, 165km Nakhon Pathom-Hua Hin (Prachuap Khiri Khan) route, 132km Map Ka Bao (Saraburi)-Nakhon Ratchasima route, 148km Lop Buri-Pak Nam Pho (Nakhon Sawan) route and 90km Hua Hin-Prachuap Khiri Khan route.

— Phuket Gazette Editors