Railway route study points to low returns

Railway route study points to low returns

An estimate of the financial returns for a Thai-Japanese high-speed railway project linking Bangkok and Chiang Mai shows gloomy prospects.

Project co-investor Japan has told Thailand that a recent study of the route found the project is socially viable but is likely to fall short in revenue terms, Transport Minister Arkhom Termpittayapaisith said yesterday after meeting Japan's deputy chief for national railways.

To ease the financial concerns, Thailand needs to find ways to make use of areas along the 635km track to generate money, he said, referring to Japan's suggestion.

The Office of Transport and Traffic Policy and Planning (OTTPP) has been assigned to devise a master plan setting out steps to develop areas alongside the route and build a transport network connecting with the rail line, Mr Arkhom said.

Officials have been given a year to complete the plan, he said.

"Japan stressed that Thailand must have a clear policy on area development," said deputy OTTPP chief Chaiwat Tongkamkoon, adding deputy permanent secretary for transport Peraphon Thawornsupacharoen will chair a working group to prepare the master plan.

The government must be able to show, for example, how it will develop tourist or agricultural towns in the seven or eight provinces that the train will pass through, he said.

Mr Peraphon next week will call an initial meeting with local administrative bodies, the Public Works and Town and Country Planning Department, and the Treasury Department on the planned development and legal issues, Mr Chaiwat said.

The high-speed railway is a joint investment project between Thailand and Japan which signed a memorandum of understanding last year.

The countries expect the project to help bolster the economy and tourism in the Central Plains and the North.

However, they have disagreed over the project's cost. Thailand initially estimated it at 440 billion baht, which is 90 billion baht lower than Japan's calculation, according to a source at the Transport Ministry.

"Some details in the estimate differ, so we have asked Japan to review it," Mr Arkhom said.

One difference is Thailand believes part of the high-speed rail track from Bang Sue in Bangkok to Ban Phachi in Ayutthaya can share the same rail route with other rail projects, but Japan thinks not.

It suggested the construction of a separate track, which increased the project's cost as a result, according to the source.

The countries set June 20 as the date for further talks to discuss the project.

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