High-speed rail: Property development along route needed

One-year for new development plan for high-speed rail route needed after Japanese study predicts gloomy financial prospects.

TRANSPORT

Railway route study points to low returns

3/06/2016
Amornrat Mahitthirook

A Thai-Japanese high-speed railway linking Bangkok and Chiang Mai is not likely to be financially viable, according to a recent study.

An estimate of the financial returns for the project shows gloomy financial prospects.

Project co- investor Japan has told Thailand that a recent study of the route found the project is socially viable but is likely to fall short in revenue terms (in terms of revenue),

Transport Minister Arkhom Termpittayapaisith made the announcement yesterday after meeting Japan's deputy chief for national railways.

THAI-JAPANESE JOINT INVESTMENT PROJECT

The high-speed railway is a joint investment project between Thailand and Japan which signed a memorandum of understanding (MoU) last year.

The countries expect the project to help bolster the economy and tourism in the Central Plains of Thailand and the North.

However, they have disagreed over the project's cost.

PROPERTY DEVELOPMENT NEEDED TO BREAK EVEN 

To ease the financial concerns, Thailand needs to find ways to make use of areas along the 635km track to generate money, Japan suggests.

In other words, property development (real estate development) along the high-speed rail route has to be added to the investment package to make the project break even.

The task of making a master plan to develop areas alongside the route and build a transport network connecting with the rail line has been assigned to the Office of Transport and Traffic Policy and Planning (OTTPP).

Officials have been given a year to complete the plan.

DEVELOPMENT OF TOURIST & AGRICULTURAL TOWNS NEEDED

"Japan stressed that Thailand must have a clear policy on area development," said deputy OTTPP chief Chaiwat Tongkamkoon.

The government must be able to show, for example, how it will develop tourist or agricultural towns in the seven or eight provinces that the train will pass through, he said.

JAPAN & THAI COSTS ESTIMATES DIFFER

Thailand initially estimated the cost of the project at 440 billion baht, which is 90 billion baht lower than Japan's calculation, according to a source at the Transport Ministry.

"Some details in the estimate differ, so we have asked Japan to review it," Mr Arkhom said.

One difference is Thailand believes part of the high-speed rail track from Bang Sue in Bangkok to Ban Phachi in Ayutthaya can share the same rail route with other rail projects, but Japan thinks not.

It suggested the construction of a separate track, which increased the project's cost as a result, according to the source.

The countries set June 20 as the date for further talks to discuss the project.

http://www.bangkokpost.com/news/general/999785/railway-route-study-points-to-low-returns

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