Thailand to launch big infra projects for economic integration

Bangkok (The Nation/ANN) - A modal shift in transport for greater competitiveness is the name of the game behind the government's massive infrastructure development programme, which will be kicked off this year with the tendering of four high-speed-rail projects.

Under the grand plan, 55 projects worth Bt2.27 trillion (US$66.29 billion) are to be completed by 2020.

These projects are part of the government's long-term development plan but are being expedited by a commitment to infrastructure investment, the opening up of Myanmar, and the implementation of the Asean Economic Community (AEC).

The Finance Ministry is expected to submit a draft Bt2.2-trillion borrowing bill for the Cabinet's approval this month.

In the 2013 fiscal year, infrastructure spending of Bt100 billion is earmarked, according to Transport Minister Chadchart Sittipunt.

"The infrastructure development projects are designed to make Thailand the true centre stage of Asean. Under this plan, Bangkok will no longer singly represent Thailand. Major cities will gain greater prominence, thanks to the AEC, which will allow us to expand our territory without having to go to war, and extend regional connectivity," the minister said in an interview.

Of the total budget of Bt2.2 trillion, 64 per cent will fund 31 rail-related projects, 24 per cent will go to 13 road projects, 7 per cent to seven water-transport projects, and 4.75 per cent to four air-transport projects.

Ultimately, these projects are expected to improve linkages between Thailand and its Asean neighbours, reduce logistics costs, deal with growing traffic congestion, and boost tourism revenue.

Chadchart envisages Thailand as the centre of Asean through its presence in the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (Bimstec), the Greater Mekong Subregion (GMS), the Ayeyawady-Chao Phraya-Mekong Economic Cooperation Strategy (ACEMECS), and the Indonesia-Malaysia-Thailand Growth Triangle.

To benefit fully from these connections, Thailand requires a new seamless network and new rules to facilitate cross-border transport.

Thailand will be linked with the regional groups through the Southern Economic Corridor (Bangkok-Phnom Penh-Ho Chi Minh City), the East-West Economic Corridor (Malamang-Phitsanulok-Khon Kaen-Savannakhet-Danang), and the North-South Economic Corridor (which links Thailand with Kunming, China, via Laos and Myanmar). Through Route R9, Thailand will link Vietnam, Cambodia and Myanmar.

The road links are expected to boost border trade, which totalled $22.7 billion in the first nine months of 2012.

"We need to be friends with all our neighbours and must not take advantage of them. This can be a win-win deal for all sides," Chadchart said.

New investments in rail projects are designed to reduce logistics costs, which now account for 15.2 per cent of gross domestic product, against 8.3 per cent in the United States.

The cost is high as freight transport is 86 per cent by road, though this mode is the most polluting and most dangerous to life.

From 71 billion kilotonnes equivalent of carbon emission in 2010, 35 per cent came from goods transport and 36 per cent from the manufacturing sector.

Shipment by rail and water, currently at 12 per cent and 2 per cent respectively, will be promoted because of their lower costs compared to road transport.

"Rail transport should be tentatively raised to 40 per cent," Chadchart said.

Costing a total of Bt900 billion, the four high-speed-rail routes will help the government achieve that goal.

While the high-speed trains will speed up travel for individual commuters, they will also promise a shorter transport period for goods.

In Bangkok, where new roads cannot be built, the combined length of the electric-train routes will be expanded by 10 times from 40 kilometres to 468.8km. Tendering of the MRT Pink Line is expected to take place next month.

"If the tendering of all 10 new projects can be launched within two years, they will all be completed seven years from now," he said.

In the air-transport segment, some airports will be improved to attract more tourism revenue.

"There are 38 airports in Thailand, but 72 per cent of tourist arrivals are seen through Suvarnabhumi Airport," Chadchart said.

"The bottleneck must be tackled. In this regard, the Mae Sot airport could be used for travel to Myanmar."

He said there was plenty of fiscal room to finance the projects.

"We can issue 3-per-cent bonds to finance the infrastructure projects.

"This is worthwhile as it will reduce energy consumption, pollution and logistics costs. We can invest first and pay back the investment through profits reaped from the projects," he said.

The government tentatively plans to finance 8 per cent of the needed funds through revenue of involved state enterprises, 69 per cent through borrowing by government and state enterprises, 9 per cent through annual fiscal budgets, and 14 per cent through public-private investment.

Unlike the Bt350-billion budget for the water-management scheme, which is backed by a borrowing decree, the minister said it was necessary for the government issue a law to back the Bt2.27-trillion transport-infrastructure investment.

"We need a law as we want to make it a national agenda, turning the projects into contingency plans that will bind all [subsequent] governments to follow through. It's a necessity for the nation. Whoever becomes the government must continue with it, as it will benefit the entire country."

To Chadchart, dealing with environmental concerns is key to the success of the scheme. Without public acceptance, the projects could face delays.

As much of the investment will go to rail projects, the government also needs to make sure that the State Railway of Thailand is capable of handling the projects.

He said the new SRT governor Prapat Chongsanguan and the labour union had started to see the urgency of restructuring, as few want to take a train ride because of poor service.

  • Look, don't touch: Flickr photo of the day 2 hours 7 minutes ago
    Look, don't touch: Flickr photo of the day

    If there's one car that's particularly sought-after among today's well-heeled car collectors, a Ferrari 250 would be it. Usually it's the GTO variant, like the 1963 that sold for a record $52 million last year. A 250 of any sorts demands unfathomable cash, however, which is why we can but gawk at this 250 Testa Rossa. It's as close as any mere mortal will ever come to owning one.

  • Peeling out at Octane Academy, the free driving school for Ford ST owners 3 hours ago
    Peeling out at Octane Academy, the free driving school for Ford ST owners

    Buyers of Ferraris or Jaguars are used to perks from manufacturers – including racetrack lessons to help master their exotic machines. But for enthusiasts on a tighter budget, the Ford ST Octane Academy might be the sweetest deal in motoring: Buy a Ford Fiesta ST or Focus ST hatchback, and the reward is a free day of training at one of America’s longest, most-lavish road courses.

  • Why you can't buy America's greenest car 6 hours ago
    Why you can't buy America's greenest car

    Ask me or any auto expert what's the fastest car you can buy for any given amount, and we could easily cough up several options. Same for most luxurious, or off-roadable, or any other measurement. Yet there's one type of question that's far harder to answer: What's the greenest, most environmentally friendly car you can buy today?

  • Pirates kidnap three on Singapore tanker off Malaysia
    Pirates kidnap three on Singapore tanker off Malaysia

    Armed pirates boarded a Singapore-managed oil tanker in the Strait of Malacca, kidnapping three Indonesian crew and stealing some of the vessel's shipment of diesel fuel, the International Maritime Bureau said Wednesday. The attack occurred early Tuesday off Malaysia's west coast, said Noel Choong, head of IMB's Kuala Lumpur-based piracy reporting centre. The diesel oil tanker was believed to be en route to Myanmar. "IMB is aware of the attack on the Singapore-managed ship in the Malacca Straits.

  • McDonald's Hello Kitty sale site temporarily suspended due to fresh wave of Kitty mania
    McDonald's Hello Kitty sale site temporarily suspended due to fresh wave of Kitty mania

    It may not be safe to enter a McDonald’s restaurant in Singapore on Mondays starting 28 April. To celebrate the iconic Japanese character Hello Kitty’s 40th anniversary, the fast food chain announced last Friday that it would be releasing a new collection of Hello Kitty toys in McDonald’s restaurants island wide next Monday.

  • First sign of S.Korea ferry disaster was call from a frightened boy
    First sign of S.Korea ferry disaster was call from a frightened boy

    He called the emergency 119 number which put him through to the fire service, which in turn forwarded him to the coastguard two minutes later. That was followed by about 20 other calls from children on board the ship to the emergency number, a fire service officer told Reuters.