Former Bank of Thailand governor MR Pridiyathorn Devakula called for the government to abolish its planned development of four high-speed rail routes because it is not worth the investment costs.
Should the government want to test the waters on the viability of high-speed rail, it should invest in a Bangkok-Rayong route due to the absence of airline flights at the moment, he told a seminar entitled "The Fiscal Budget: What They Do with Our Money".
"We're not a rich country that can invest in projects that are not worthwhile," he said.
The 780-billion-baht high-speed rail project is part of the government's 2-trillion-baht worth of infrastructure projects aimed at improving the country's logistics and transport systems as well as stimulating domestic investment.
The four routes are Bangkok-Phitsanulok-Chiang Mai to the North worth 387 billion baht, Bangkok-Hua Hin-Padang Besar on the Malaysian border worth 124 billion, Bangkok-Pattaya-Rayong to the East worth 100 billion and Bangkok-Nakhon Ratchasima-Nong Khai to the Northeast worth 170 billion.
A draft to authorise government borrowing to fund the 2-trillion-baht scheme is pending parliamentary deliberation.
The seven-year investment is expected to start in the second half of this year.
MR Pridiyathorn referred to a study that some routes need as much as 41,000 passengers per day or 15 million a year to break even.
The required number of passengers is above the number of domestic airline passengers at the moment.
The fares of high-speed train routes will likely exceed those of low-cost airlines even though its faster to fly.
He lashed out at politicians whose first priority is to win re-election by offering populist policies, noting that this could create a democracy trap where doing activities for the sake of the country becomes the second priority.
This practice is how countries in Southern Europe ended up with a fiscal budget crisis, he said.
Their governments have high expenses funding their generous welfare benefits but did not dare to raise taxes.
"This democracy trap makes me lose faith in the democratic system to some extent," said MR Pridiyathorn.
Somchai Jitsuchon, director of the Thailand Development Research Institute, said the 780-billion-baht budget may be too low, and it is likely an additional 100 billion baht would be needed to fund the projects.
It is inappropriate to allow China and Japan to conduct the pre-feasibility study for the high-speed rail projects since they are likely to be investors should it move forward, he said.
About the author
- Writer: Wichit Chantanusornsiri
Position: Business Reporter