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Bidding to start on major Thailand rail links before end of 2018


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Fri, 5 Oct. 2018
    Oxford Business Group

Thailand is moving forward with plans to expand its transport infrastructure, with some of the country’s largest companies gearing up to bid on a high-speed rail line linking three key airports. Other major rail projects have also experienced progress in recent months.

In late July Charoen Pokphand, Thailand’s largest private firm and one of the world’s biggest conglomerates, announced plans to bid for the BT200bn ($6.2bn) Linked 3 Airport Project, which will connect two international airports in the Bangkok area – Suvarnabhumi and Don Muang – with the Eastern Economic Corridor’s (EEC) U-Tapao airport via 220 km of track.

This was followed in early September by the state-owned oil and gas group PTT announcing it was talking to potential partners with relevant expertise about making a joint bid on the project. According to international media, Chansin Treenuchagron, president and CEO of PTT, said the group is “in talks with several companies”, including domestic firms BTS Group Holdings, and Bangkok Expressway and Metro Public Company.

Following the Cabinet’s approval of the new line in March, bidding documents were made available until early July and purchased by 31 companies from seven different countries. The contract for the line is expected to be open for bidding in November, with the winner to be revealed in February next year.

In addition to supporting the development of the ECC as a centre for manufacturing, the high-speed rail link is seen as vital to accommodate increasing numbers of tourists in Bangkok. International arrivals could reach 40m next year, more than half the size of the Thai population, according to international media reports.

Other key rail projects gain traction

The Linked 3 Airport Project is the first of two high-speed rail projects to move forward in recent months, with bidding set to commence on the first phase of a project to build a rail link to China, according to statements from Thailand’s Ministry of Transport (MoT) last month.

China has already submitted designs for the 252.5-km first-phase link, which will connect Bangkok with Nakhon Ratchasima in central Thailand for a cost of BT179bn ($5.5bn).

Voravuth Mala, acting governor of the State Railway of Thailand (SRT), the rail network operator, also announced that SRT was preparing to commence auctions for a consulting contract to assist in the second phase’s development, which will extend the line from Nakhon Ratchasima to Nong Khai in the north-east.

In tandem with the push for high-speed networks, the SRT, which comes under the jurisdiction of the MoT, is looking to improve the efficiency of the rail network by increasing the number of double-track lines.

In late July it received approval from the Cabinet for a BT85bn ($2.6bn), 323-km dual-track line from Den Chai to Chiang Khong, effectively connecting the four provinces of Phrae, Lamang, Phayao and Chiang Rai.

Land exploration will be conducted through to June 2021, by which point bidding on construction contracts is expected to have commenced. Work on the railway is being accelerated at the request of the MoT to allow the link to open in 2023, rather than in 2025 as was initially intended.

In June the SRT said it would propose other double-track projects for approval this year. The majority will be for extensions to existing routes, including Pak Nam Po to Denchai, Jira to Ubon Ratchathani and Chumphon to Surat Thani.

Long-term plan to incentivise private sector investment

While the recent progress in these flagship projects is a positive step forward for rail connectivity, the government has sought to ensure ongoing infrastructural development and incentivise private sector investment through the creation of a long-term transport strategy.

In September last year, the Office of Transport and Traffic Policy and Planning launched a 20-year master plan to guide rail development.

The BT2.7trn ($83.3bn) strategy, which aims to upgrade and expand the rail network to support growth in special economic zones and the tourism sector, has been broken down into three phases through to 2036. The first phase runs until 2021, the second between 2022 and 2026, while the third stage will cover the period 2027-36.

It plans for the development of 2777 km of double-track rail, 2352 km of metre-gauge rail and 2457 km of standard-gauge rail for high-speed trains, along with the electrification of train lines and the establishment of additional container yards.

The plan envisages BT1.9trn ($58.6bn) of funding will come from the government, with the rest to be provided by the private sector.

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