Just passengers on Thailand's runaway train projects?

 

 

We can assume that Japan, which boasts being No 1 in train technology, was upset. Shortly after the signing with Beijing, Prayut’s immediate subordinate, Transport Minister Prajin Juntong, mentioned Japan would be handed the contract for the line linking Thailand with Myanmar in the west and Cambodia in the east. The agreement for joint development of the 874-kilometre link was signed last week in Tokyo.

That news must have displeased Germany, whose firm Siemens also claims to be a world leader in rail technology. That explains the interest it has shown in upgrading the Bangkok-Hua Hin route with a high-speed train project.

And later last week, Deputy Prime Minister MR Pridiyathorn Devakula met the French ambassador and reported that France was eyeing a slice of Thailand’s railway development.

Should Thais be proud that their Kingdom is once again attracting interest around the world?

The development brings to mind reports almost 10 years ago when the Thaksin administration unveiled plans for the 10-line electric train projects. Foreign companies, mostly from the West, approached Thai media in order to outline their visions for the projects. This led to the impression that a train assembly plant would be opened in Thailand, where technological know-how could be transferred to Thai technicians.

The only difference this time is that no company has approached local media, since foreign governments are dealing directly with the Thai administration and publicity for corporate visions is no longer needed.

Another fact overlooked is that we are now learning of foreign countries’ interest in our train projects only via policymakers. That seems strange: In past years, no junta has ever handed government projects to companies or countries without first making them go through a bidding process.

 Given the absence of public bidding, media interest in the rail projects has died down.

In the past, auctions surrounding mega projects were closely monitored for any trace of corruption. A full list of all the companies bidding was made public, with brief information on each one.

Newspapers were quick to report when companies actually submitted bids, when they passed the technical assessment round and when they won projects with the lowest bids.

Back then, reporters could say with some certainty whether or not a project was viable and transparent. We could say it was transparent if the bid won participation from a large number of Japanese and Western companies, as these firms would almost certainly not all collude to influence the result. The more bidders, the more transparent the project – and the greater guarantee for taxpayers that the projects would render economic and social benefits, rather than political ones.

Now, without bids, we just attend the press briefings and follow the government’s announcements. It makes our work a lot easier. Gone is the need to beg the China Railway Construction Corp (CRCC) for an interview to explain its vision for the Bt400-billion Bangkok-Nong Khai train line. The junta has guaranteed the whole process will be carried out in a transparent and honest manner.

How many of us would care to learn more about the CRCC and why it is being allowed to get involved in a mega rail project in Thailand? How many are questioning whether Thailand is just a piece in China’s diplomatic jigsaw, which is expanding via train technology?

In just 10 years, China has built the world’s largest network of high-speed trains and is aggressively pursuing high-speed rail projects worldwide. As Thai pride swells, we should remind ourselves that Beijing is offering the same package – including funding from the Export Import Bank of China – to all countries that award it projects.

In May, after securing the contract for a railway line linking the Kenyan port city of Mombassa to neighbouring Uganda, Rwanda, Burundi and South Sudan, China agreed to provide 90 per cent of the US$3.8-billion cost via its Ex-Im Bank.

In November, when CRCC signed a deal worth nearly $12 billion with Nigeria to build a railway along the West African nation’s coast, it was learnt that one third of the money would go back to China. About $4 billion will be used to buy equipment from China, including construction machinery, trains and steel.

In Mexico, a CRCC-led consortium won a multibillion-dollar high-speed train project backed by China Exim Bank financing of 85 per cent. Sixteen other firms pulled out of the bidding, saying they could not compete with the highly favourable financing package. The bid was cancelled because of a scandal but, thanks to its financing, CRCC is expected to win when the auction is held again.

The Chinese company has offered a similar deal for Thailand. Luckily, Thai authorities have been wise enough to weigh all the options. More and more observers reckon the Chinese interest rate is high compared to the other deals, including the one from Japan.

Though Thailand has agreed to use Chinese technology on the route, authorities have not ruled out the possibility of using local funding to finance the project.

With no bidding process being used, the conditions of the contract are being are being negotiated behind closed doors by experts handpicked by the junta. The absence of bids gives the impression that the junta is fully empowered to award all contracts for mega projects. As such it will come as no surprise if the prime minister and members of his Cabinet are approached by many other countries seeking a slice of our rail projects.