Sino-Thai Railway and Relations
Photo Credit: China Daily
By Tai Wei Lim

Sino-Thai Railway and Relations

Dec. 11, 2017  |     |  0 comments

According to the Thai mass media, the first phase of the Sino-Thai railway — Thailand’s first High Speed Railway (HSR) line — connecting Bangkok with Nakhon Ratchasima (approximately 253 km with a top speed of 250 km/h) would begin construction in late 2017. This was announced by Deputy Transport Minister Pichit Akrathit on September 25, 2017.

The projected date of completion is 2022, in sync with the Sino-Laotian railway line. This rail line will be a part of China’s Belt and Road Initiative’s (BRI) pan-Asian railway project, a master-plan to link Thailand, China, Laos, and other East Asian states. The first phase of this project will be crucial to gauge the success of upcoming later phases, such as projected initiatives for lengthening the track from Nakhon Ratchasima to Nong Khai (355 km). Given that it is placed under the BRI, the Sino-Thai railway project’s progress, successes, and challenges will be scrutinized by all stakeholders as well as the partners in other BRI projects, not just for the Sino-Thai railway but for the overall pan-Asian railway project.

The construction of the initial 3.5 km railway track involves the Department of Highways (Transport Ministry) in Nakhon Ratchasima Province. The following 11 km (Thailand hopes to fund this 2nd phase), 119.5 km and 119 km tracks will follow suit sequentially.

The leadership meeting on this project took place between Thai Transport Minister Arkhom Termpittayapaisith and Wang Xiaotao, the Vice Chairperson of China’s National Development and Reform Commission in Tianjin.

Thailand will be leading this project as its authorities (both national and local) are able to advise on bureaucratic procedures and the intricacies of raising USD 5.4 billion for the project. Thai PM Prayuth Chan-ocha permitted financing for the initial duration of the project in July 2017, having deployed the use of Article 44 of the country’s current transitional constitution. This extraordinary power allows the Thai PM to carry out and implement administrative commends without legal restraints. The Thais plan to issue bonds and/or take loans from banks and financial institutions, including options from a China-based bank.

Meanwhile, China will take care of the technical and engineering responsibilities and also the purchasing of railway track mechanisms, as it has accumulated skills and knowledge in constructing, managing, running and maintaining railway systems, especially since China has the world’s longest HSR railway.

400 Chinese technicians and engineers have taken courses on Thai legislation and Thai code of ethics with a mandatory qualifying grade of 60%. This is part of acclimatizing Chinese workers and engineers to local conditions. The courses also introduce Chinese personnel to local culture as well as other sensitivities, as they help Chinese workers understand the local concepts of ethical behavior and corporate social responsibility.

Eventually, according to the Chinese state media, the technologies and know-how will be transferred to the Thais through training institutions, including the manufacture of spare parts. This is important for a turnkey project as it would benefit both parties eventually. The Thais can acquire technical skills and the Chinese can move on to high-value added activities in partnership with Thailand in the future.

The Thai government has invested in the Eastern Economic Corridor and thus railway and other infrastructure developments are a boost to such plans.

In fact, this was a basis for the so-called “East Asian miracle” coined by the World Bank when technology and management know-how was passed from Japan and the Four Tiger Economies (Hong Kong, Singapore, South Korea, and Taiwan) to developing economies (the newly emerging tigers) like Thailand and the Philippines as well as the mostly former socialist countries of Cambodia, Laos, Myanmar and Vietnam. Thailand became Southeast Asia’s “Detroit of the East” through such exchanges. Its formidable car industry which supplies Japanese cars to most of Southeast Asia today is built up based on such turnkey projects as well as foreign direct investment. China plays this crucial role in the field of infrastructure development today.

The Sino-Thai railway project is significant for Sino-Thai relations which has been enjoying good relations of late. It will contribute to friendship, confidence building measures in economic relations, as well as to people-to-people’s diplomacy when the railway is completed and starts ferrying passengers. Of course, there will be challenges too. The Sino-Thai railway will have to meet environmental needs. Thailand is a major agricultural country and is one of the world’s largest, if not the largest, rice exporters. Therefore, preserving environmental integrity will be important.

The project must also be sensitive to local conditions and cultures. Therefore, emphasis has been given to training in local knowledge, bureaucratic procedures, and laws. These are crucial in developing this understanding and sensitivities. Otherwise, delays may result when procedures are not complied or cultures are not respected.

Like all large projects, the Sino-Thai railway is subject to national interests, domestic political developments, and technical solutions. Right now, Thailand is hoping to be the logistic hub of Southeast Asia and this railway may have the potential to contribute to this desire. The project is perceived as being good for Thailand’s economic development with infrastructure-spurring business investments.

The Thai government has invested in the Eastern Economic Corridor (EEC) and thus railway and other infrastructure developments are a boost to such plans. The EEC will draw Foreign Direct Investments (FDIs) to the region. China may also be able to build production networks with Thailand if connectivity becomes stronger through such railway projects.

The railway’s connection between Thailand and Laos may also be able to spur economic exchanges between the two countries. Land-locked Laos wants to have access to coastal ports such as Laem Chabang within the proximity of Thailand’s capital city, Bangkok. This would enable Laos to export products through the global maritime trading system.

Some Chinese scholars have suggested the possibility of constructing industrial parks along the railway tracks. Potentially, population centers near the railway system are possible centers of consumers and manufacturing. Such developments may then spur development in underdeveloped regions along or near the railway system.

China is also keen to connect with Thailand’s markets, consumers and labour pools and the railway system may make this possible. Some Chinese companies, including infrastructure and construction companies, are aligned with this line of thinking. Besides them, cutting-edge companies like ecommerce giant have also expressed interest in constructing logistical hubs and facilities in the vicinity of the railway system.

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