Getting the Sino-Thai railway back on track
The Thai-Chinese railway reached a new milestone this month, as the Finance Ministry prepared funding for the project, including a loan for up to Bt170 billion from China, pending a final proposal from the Transport Ministry.
However, there are still hurdles to overcome, with the terms of the loan continuing to be a major sticking point.
The first stage of the project is a 252-kilometre stretch of high-speed railway from Bangkok to Nakhon Ratchasima, Later, it will be extended another 355 kilometres to Nong Khai on the Thai-Laos border, which will then connect with the China-Laos railway from Vientiane to Kunming in China’s southern Yunnan province.
The project is considered to be an important link in China’s Belt and Road initiative, but is already running late by about two years with further hurdles to overcome as people continue to question its viability and cost. Only last week, former finance minister Korn Chatikavanij suggested that it should be financed as a joint venture between Thailand and China. Since this suggestion has already been rejected by China, this would require renegotiating the deal all over again.
The suggestion is unlikely to be taken up by the government. Instead, Prime Minister Prayut has issued an order under Article 44 of the interim charter to grant multiple legal exemptions to the project. For example, Chinese engineers and architects would be allowed to work in Thailand, and would not need to take local tests to qualify for their fields of expertise.
Although this is controversial, the lack of specialist skills does present a barrier to the plans for Thailand 4.0, and Thailand does not yet have sufficient skills in railway construction to do the job itself. By contrast, China has developed tremendous expertise in this area.
Its rail industry is highly advanced with more than 20,000 kilometres of high-speed railways already built across its vast expanses, and new lines have been built to connect China and Europe. Hopefully China’s skills will be shared with Thailand through provisions for training and technology transfer.
While the Thai leg of the Thai-China railway is only a small part of China’s grand scheme for connecting the world, it is essential for Thailand’s vision of being a logistics hub for Southeast Asia. It will give China access to Thailand’s agricultural areas, markets and industrial estates, including the Eastern Economic Corridor and our Asean neighbours.
This means our part of the world will be brought another step closer to the Belt and Road reality.