Friday's announcement that Thailand and France are expected to sign a memorandum of understanding next month on developing high-speed rail here and modernising the State Railway of Thailand's operations and services was a smart play by a Pheu Thai government anxious to win public support for the controversial 2 trillion-baht infrastructure project. The French have a proven performance record in the field of high-speed rail, and just as important, a reputation for stringent safety standards. France's TGV high-speed rail system was developed in the 1970s. Centred in Paris, it has expanded across France and into neighbouring countries on both high-speed and conventional lines. In April 2007 a TGV test train set the record for the fastest wheeled train, reaching 574.8kph.
There had been some speculation that Thailand might look to China as its main partner in upgrading the rail system, a move that would have invited unneeded difficulty in persuading parliament to pass the loan package the government is requesting for the infrastructure projects. In July 2011, a bullet train crash in the southeastern city of Wenzhou killed 40 people and injured 200. A December 2011 report authorised by the Chinese government concluded that the crash was the result of design flaws and sloppy management, and cited "missteps" by 54 officials.
Frederic Cuvillier, the French minister delegate for transport, maritime and fishing affairs, said his country's agreement with Thailand would emphasise mutual cooperation on transport development and that the French private sector would be encouraged to provide technical assistance for the project. He noted that as yet there has been no decision on the private sector's role in developing the project, as well as its rules and regulations. This is an important point.
The participation of the private sector in investment would not only reduce the debt and risk associated with the infrastructure projects, it would also add another layer of oversight and scrutiny. Let's face it, one of the major questions concerning the infrastructure projects is whether the government can show transparency in awarding contracts and disbursing funds, given past irregularities in such matters. Having the private sector, particularly foreign companies from places where transparency is more the norm, involved in project funding should introduce a higher standard.
Nualnoy Treerat, an economics lecturer at Chulalongkorn University, gave her general approval for the infrastructure proposal but disagreed with the government's plan to borrow such a huge sum and to be the sole investor. She pointed out that by allowing the private sector to invest in some of the projects, it would guarantee independent studies of whether the projects are worthy of investment and boost public confidence in them.
This is the chief task before the government when it seeks to win parliamentary approval for the infrastructure programme, probably in three or four months. In the meantime, the government would do well to heed Ms Nualnoy's advice and announce its intention to let the private sector in on the investment phase.
Should parliamentary approval eventually be won, as appears likely, another crucial area for the government to ensure the success of the infrastructure programme is to be mindful of the projects' effects on the environment and the people, particularly with regard to land appropriation.
When such projects are handled badly they invariably produce festering resentment among the very people the Pheu Thai Party are supposedly championing. After all, it was chiefly the lingering environmental impacts of government projects that brought about 1,000 demonstrators from the People's Movement for a Just Society to Government House in Bangkok last week.
If the infrastructure projects are handled transparently and with public participation from the start, and every effort is made to keep down the government debt incurred by bringing in the private sector, they should have a stimulating effect on the economy and at the same time provide needed improvements to keep the country competitive in the region. The decision to bring in the French on the rail transport phase marked a big step along this course.