Who will benefit from the Sino-Thai railway?
Of all the government’s major infrastructure plans, the best known is the proposed new Sino-Thai railway system which would run from Nong Khai in the Northeast to Rayong in the east. It is hugely important to both Thailand and China, as it will ensure Tha
Construction work is supposed to begin in a few months but there are still significant hurdles to overcome.
Thailand has been trying to negotiate more favourable terms, similar to the ones extended to Indonesia for its Jakarta-Bandung high-speed railway, but China has pushed back. One reason for the special terms given to Indonesia was the fierce rivalry between China and Japan over the railway; however, this is not the case in Thailand, as Japan is more interested in East-West routes than the North-South ones being pursued by China.
The Thai government is now offering China some alternative ownership options but so far there has been no breakthrough on the business side.
Thai authorities also face a challenge from local communities and environmentalists who are concerned about the potential disruptive impact of the rail development, especially since the project is being “fast-tracked” through the Environmental Impact Assessment (EIA) process.
The Thai government, however, wants to speed things up, as it is pinning its hopes on infrastructure development to support the economy and there is only a small window of opportunity to make it happen, given that elections are due next year.
In my view, the economic benefits to Thailand of this project would be considerable. Apart from the boost it would give to the construction industry, the railway would stimulate tourism and the costs of freight would drop considerably.
The rail link would also support manufacturing and agricultural development in the areas through which it passes and strengthen supply-chain linkages between Thailand and other countries in the AEC. Nevertheless, the Thai government should put more effort into improving its dialogue with relevant communities along the route and assure them that they will be better off should the project become a success.
China is already the global leader in high-speed rail, with tracks extending for more than 19,000 kilometres or about 60 per cent of the world’s total. Its high-speed rail industry is also highly competitive and it has ambitious plans to extend its railways further. These even include a massive underwater rail tunnel to link China, Russia and America through Alaska. Despite all these potential benefits for Thailand, and although the Thailand rail project is only a small part of its grand global vision, it is in China’s interest to complete the Thai leg of the route as it will form an important part of the land link to the south.
Given China’s remarkable achievements so far, such as the record-breaking Qinghai-Tibet railway on the Tibetan plateau, the engineering side of the Nong Khai-Rayong link should be relatively straightforward.
Getting the Thai government to sign on the dotted line, however, seems to be much more challenging.