Rail to Thailand
Trends and opportunities
Thailand is situated in a strategic location at the centre of the ASEAN region. The major form of transport is by road and this mode has resulted in traffic safety problems, urban congestion, energy inefficiencies and environmental challenges. Thailand is keen to develop its rail transportation system to resolve these problems, support the growth of transportation of goods and increase the level of passengers using rail both on urban and inter-city networks.
Thailand has an estimated 4180km of rail tracks that connect 46 provinces. Thailand has three types of rail tracks at present, single tracks total 3901km (93.3 per cent of total railways), while dual and triple tracks constitute 220km (5.3 per cent) and 59km (1.4 per cent), respectively.
(Source: Pomlaktong, N. and Ongkittikul, S. (2008), ‘Infrastructure Development in Thailand’, in Kumar, N. (ed.), International Infrastructure Development in East Asia – Towards Balanced Regional Development and Integration, ERIA Research Project Report 2007-2, Chiba: IDE-JETRO)
Rail Infrastructure Development Plan
In July 2014, the National Council for Peace and Order (NCPO) approved a 2.4 trillion Baht infrastructure and logistics development plan, covering dual track railways, electric trains, highways, waterways and ports and airports.
To be implemented over eight years from 2015, the plan’s primary goal will be to restructure the transportation system by accelerating the expansion and improvement of the national railway network and reducing its dependence on road transportation. Majority of the total budget will be devoted to railway development projects and reflects Thailand’s vision of becoming a key strategic and logistics gateway to the ASEAN Economic Community (AEC).
The government is aiming to cut Thailand's logistics costs from 15.2 to 13.2 per cent of Growth Domestic Product (GDP), create 1.6 million jobs and raise annual GDP growth by one per cent, enhancing the nation’s competitiveness. Another major goal of the plan is to expand Bangkok's mass transit system by 400km from the current 80km by 2017.
(Source: BOI Thailand Investment Review, Singular Infrastructure, Sep 2014)
Expansion of the urban rail network
The construction of six new lines will expand the total length in the greater Bangkok area to 410km by 2020:
- The 23km Purple Line (Bang Yai-Bang Sue) should be completed by the end of 2015.
- the 27km Blue Line extension (Bang Sue-Tha Phra-Bang Khae) and the 12.8km Green Line (Bearing-Samut Prakan) are expected to be ready by 2017.
- While completion of the 26km Red Line (Bang Sue-Rangsit) has been pushed back to the end of 2018.
The other two electric rail route projects are still in the bidding or pre-bidding preparation process, which includes an environmental impact assessment as mandated by Thai Law.
Thailand wishes to reinvigorate its rail network and services to reduce its dependency on fossil fuels and road freight and to lower greenhouse gas emissions. In achieving this, the government aims to increase the share of rail in freight transport from two to eight per cent by 2020. The State Railway of Thailand (SRT) has proposed a construction plan for the first electric railway route between a deep sea port in Songkhla province and Malaysia. According to the SRT, the new 100km route will serve as a link to the existing electric railway from Padang Besar to Kuala Lumpur (Source: tdhrail Magazine The Asian Railway Magazine, Asian Regional Roundup 2014, Issue 54, Nov 2014, p.21).
Thailand's far-reaching railway network gives traders a very inexpensive method of hauling heavy loads of cargo. This includes international links to expanding border markets such as Cambodia, Laos, Vietnam, Malaysia and even Singapore.
According to Dataconsult’s Thailand Corporate Alert October 2014, Laem Chabang Port will be improved to accommodate more vessels and become a ‘centre for rail based container freight transportation’.
With the national railway network expected to double from its current 4180km over the next decade, the Thai Ministry of Transport plans to establish a new railway transport department in 2015. The main role of the new department in the initial stages will be to act as a regulatory body, setting standards for:
The new role of the SRT will be as a railway operator, along with the Bangkok Metro (operator of the MRT subway) and the Bangkok Mass Transit System (operator of the Skytrain) (Source: tdhrail Magazine The Asian Railway Magazine, Asian Regional Roundup 2014, Issue 54, Nov 2014, p.21).
According to the Permanent Secretary for Transport, Soithip Traisut, Thailand has also signed an agreement with Vietnam to form the Mekong River Railway Authority in collaboration with Cambodia, Laos, China and Myanmar. The main objective of the Authority will be to connect rail transit systems for the transport of goods and passengers. Cambodia will be the first Chair of the Authority.
There are several planned railway projects in major provinces of Thailand:
- Phuket (South) - the construction of a light railway system would connect the International Airport with various tourist destinations on the island.
- Khon Kaen (Northeast) - the Mayor and a group of local businesspeople have shown a strong commitment to improving the city's public transportation system. During the initial phase, two projects will be introduced — an elevated rapid transit system like Bangkok's Skytrain service and a Bus Rapid Transit (BRT) system linking various parts of the town.
- Chiang Mai (North) is also considering several options, including a monorail system, to improve public transport in the city.
These projects are expected to improve linkages between Thailand and its ASEAN neighbours, reduce logistics costs and deal with growing traffic congestion and boost tourism revenue.
The Thai government has also planned to modernise the existing rail network:
- Rail modernisation and track rehabilitation – Thailand’s rail lines have long been in need of an upgrade, particularly for rail junction and links, as well as tunnels in order to prevent bottlenecks.
- Rail safety has become a critical issue following a number of derailments over the last couple of years and several accidents caused by the lack of signalling equipment at various roads and railways junctions.
- Freight and heavy haul – Australia is well known among Thai rail academics and industry contacts for its experience and capabilities.
- Sub-contracting work with local construction firms for railway lines and tracking systems.
- Technology and know-how – a number of Australian companies have already (or are planning) set-up in Thailand for either local manufacture or assembly. Technology transfer of manufacturing techniques is also an option to gain entry into the market.
- Education and skills development of rail engineers and technicians to meet the increasing demand for expertise in Thailand.
- Financing infrastructure investment plans:
- Proposed financing sources are the annual budget, government borrowing, revenue from State-Owned Enterprises (SOE) and Private-Public Partnerships (PPP) (Source: Presentation on Funding Source for Infrastructure Investment Plans by Mr. Suwit Rojanavanich, Bond Market Advisor, Public Debt Management Office, Aug 2014)<./em>
- Thailand’s new PPP Law has been in effect since 4 April 2013 and aims to encourage more private participation and involvement; upgrade the administration of government projects; and stimulate the use of more innovative technology.
- As part of a capacity building program, a PPP delegation from the Thai Ministry of Finance successfully conducted a study visit to Australia in November 2014. The group studied significant PPP models in Australia and conducted site visits to major economic and social infrastructure projects.
- A series of Infrastructure Funds will also be launched by the Ministry of Finance to seek private investment for public infrastructure projects.
Key rail players are:
- SRT is Thailand’s largest state enterprise, responsible for national rail network and the Airport Rail Link (eight stations).
- Bangkok Metro Public Co., Ltd. (BMPCL) operates the MRT Line (Blue Line) which is Thailand’s only metro system.
- Bangkok Mass Transit System Public Co., Ltd. (BTSC) operates Bangkok’s Sky Train System (BTS).
Current major suppliers for urban rail and SRT include Siemens, GE, Hitachi, Mitsubishi, Alstom and Bombardier.
In early 2015, Thailand and China signed an agreement covering joint construction and operation of two new standard gauge railway lines, from the Northeast to Bangkok to the eastern seaboard, with the project cost estimated at 328 billion Baht.
(Source: Bangkok Post, Sino-Thai Railway Agreement Signed, 12 Mar 2015)
The Thai and Japanese governments have had discussions on a proposed 695km double track (standard gauge) railway line, from Tak in the west to Mukdahan in the east.
Tariffs, regulations and customs
The Thailand-Australia Free Trade Agreement (TAFTA) has eliminated the majority of Thai tariffs on goods imported from Australia. The reduction of Thailand's previously high tariff barriers (for some goods, up to 200 per cent) is a significant win for Australian businesses, opening up a range of export opportunities in Southeast Asia's second-largest economy. TAFTA also improves the environment for bilateral services trade and investment.
The agreement establishing the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA) is Australia’s most ambitious trade deal to date and its first multi-country FTA. The countries of ASEAN - Brunei, Myanmar, Cambodia, Indonesia, Laos, Malaysia, the Philippines, Singapore, Thailand and Vietnam - constitute one of the most dynamic economic regions in the world.
Marketing your products and services
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Links and industry contacts
Government, business and trade resources
The Ministry of Transport (MoT)
OTP Office of Transport and Traffic Planning (OTP)
State Railway of Thailand (SRT)
Bangkok Metro Public Co., Ltd. (BMPCL)
Bangkok Mass Transit System Public Co., Ltd. (BTSC)
The Bangkok Post
Australian Embassy Bangkok
Australian-Thai Chamber of Commerce
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