ROME/PARIS: Thailand's agricultural conglomerate Charoen Pokphand Group (CP) is exploring the key global players in railway operations to be potential partners on the 200-billion-baht high-speed train project linking three airports, which is scheduled to open for bid submissions in November.
Adhiruth Thothaveesansuk, CP's head for high-speed train coordination, said the group is studying similar operations in France, Japan, China, Italy and the US to select a potential partner.
"High-speed trains are new to Thailand," he said. "The project is the country's largest investment in a decade, so we should select one of the best to join us in the bidding."
CP Group is one of 31 firms from seven countries that have bought terms of reference (ToR) documents to bid on the train route to connect Suvarnabhumi, Don Mueang with U-tapao airports.
As the contract spans 50 years, CP is considering not only rail operations and management but also the transit-oriented developments that will be alternative income sources.
"We need to select partners very carefully as the key to success is in the details," said Mr Adhiruth, joining the coordination two months ago. "Some players are good at design. Some at efficient cost management. Every element leads to success."
Nino Cingolani, senior vice-president for global rail solutions of FS International, an international business of Italian rail operator Ferrovie dello Stato (FS) Italiane or Italian State Railways Group said the group is the only rail operator in Italy that makes a profit.
"Maximising revenue and minimising cost through operation and management are two key sources of income," he said.
The group boosts revenue through both an increase in the number of rail passengers each year and recurring income from commercial properties through transit-oriented development.
To reduce the cost of operations and management, FS adopts better engineering disciplines or reliability, availability, maintainability and safety (RAMS) improvements with optimisation processes and predictable maintenance technology.
Last year FS Italiane recorded a net profit of €552 million (20.9 billion baht) from operating revenue of €9.3 billion, compared with €772 million and €9 billion in 2016, respectively.
The company aims to have €11.2 billion in revenue with an ebitda margin of 25% in 2018.
Of the total revenue, €5 billion was from all railways spanning a total of 24,483 kilometres. Of the railway revenue, one third or €1.7 billion was from high-speed train lines.
"In Italy, the government invested in rail infrastructure and systems, while the private sector invested in rails and operations without repaying the government," he said.
About 15-20% of total revenue was from eight transit-oriented development projects in the country.
Key strategies will be setting up the partnership, establishing a local operator, transferring know-how and experience in high-speed lines and training locals about high-speed train operation and management.
Agnes Romatet-Espagne, deputy chief executive of international development, SNCF Mobilites, the largest rail operator in France, said the company has entered 120 countries worldwide, but not Thailand.
International business represented by one-third of SNCF's total revenue last year or €11 billion out of €33.5 billion.
By 2025, it expects overseas revenue will increase to 50% of total revenue or €21.4 billion from €42.8 billion.
"We will not only develop rail tracks but also real estate such as office and retail properties," said Mrs Romatet-Espagne, who will visit Bangkok this week.
Mr Adhiruth adds the high-speed train project will ignite other projects, including the new airport and its expansion, industrial estates, R&D, innovation centre, smart cities, deep-sea ports and others in the Eastern Economic Corridor.
Tomorrow CP executives will visit Japan and China to explore high-speed railway operations before finalising whom it will partner with in the consortium.
CP has various businesses that will contribute and benefit from the high-speed train project including technology through True Corporation and property development through CP Land that has more than 3,000 rai in Rayong for industrial estate development.