The government may scrap three high-speed rail projects after being spurned by private investors, a source at the Transport Ministry said.
They are the Bangkok-Chiang Mai, Bangkok-Surat Thani and Rayong-Trat projects. The source said a high-speed train project linking Bangkok with the northern province of Chiang Mai, and a project connecting Bangkok with the southern province of Surat Thani were not included in the Transport Ministry's mega-investment scheme worth a total of 1.94 trillion baht. The projects were proposed at a meeting of economic ministers last Friday.
The State Railway of Thailand is preparing details of the projects before forwarding them to the National Economic and Social Development Council, the source said.
However, they said, private investors may not be interested in the projects as the routes span more than 600 kilometres and involve massive costs.
Another source at the Office of Transport and Traffic Policy and Planning (OTP) said the planned Shinkansen-like high-speed railway from Bangkok to Chiang Mai has undergone a feasibility study, but the project will not get off the ground unless Japan agrees to jointly invest.
The government wants Japan to co-invest, which would help reduce Thailand's public debt, as well as to transfer its technology to Thailand, the source said. However, Japan says it is not interested in taking part, they said.
At a meeting between former transport minister Arkhom Termpittayapaisith and Keiichi Ishii, Japan's Minister of Land, Infrastructure, Transport and Tourism, during Mr Arkhom's visit to Japan on Oct 19-20 last year, Japanese investors argued the high-speed project is a national asset which the Thai government should pursue on its own, the source said.
The cost of the project stretching 670 kilometres from Bangkok to Chiang Mai is estimated to be 400 billion baht. The project is divided into two phases, with the first 380km phase from Bangkok to Phitsanulok set to cost about 276 billion baht. The source said Japan has turned away from the project because it is not worth investing in. While the economic internal rate of return (EIRR) is estimated at 14%, the financial internal rate of return (FIRR) is extremely low.
The concerns were based on the results of a feasibility study from the Japan International Cooperation Agency (Jica) which showed there would be around 10,000 passengers per day, against the original estimate of 30,000.
The entire route would have to service around 50,000 passengers per day to profit from fares.
Regarding the second phase of the high-speed project from U-Tapao Airport in Rayong to the easternmost province of Trat, the government will not invest unless private entities co-invest, the source said. The project is an extension of the planned high-speed railway connecting Don Mueang, Suvarnabhumi and U-Tapao airports.
Chayathan Promsorn, deputy director of the OTP, said the government has focused on the Thai-Chinese high-speed railway project between Bangkok and Nakhon Ratchasima, which will connect to Laos, and is part of China's Belt and Road Initiative.
The first phase of high-speed railway project, which runs from Bangkok to Nakhon Ratchasima is under construction and is expected to open by 2023.
The second phase, which begins in Nakhon Ratchasima and ends in Nong Khai near the Lao border is expected to be running by 2025.