Thai-Chinese rail project: Next stop to Nowhere Station
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Has the Thai-Chinese high-speed train project been derailed? Officially it’s still on, albeit on a reduced scale. Unofficially, the scheme has been suspended until further notice.
This, of course, has a far greater negative impact than if a normal transport joint venture between Thailand and China were involved. Thailand’s decision to go it alone in building a section of the original Thai-Chinese railway project, between Bangkok and Nakhon Ratchaima (Korat), will have far-reaching consequences for overall relations between the two countries.
Thailand could now become the “missing link” in Beijing’s ambitious plan to build a rail network linking southern China with the rest of Asia. That doesn’t augur well for Beijing’s much-heralded 21st-century Silk Road initiative. Both countries must now restore mutual goodwill and revive negotiations that failed to reach agreement despite nine widely publicised rounds of talks in Bangkok and Beijing.
Last week, Prime Minister Prayut Chan-o-cha returned from a summit of Chinese and Lower Mekong countries on Hainan, and separate bilateral talks with Chinese Premier Li Keqiang, to deliver an unexpected twist on the rail project: We will build the 250km Bangkok-Korat section with our own budget and with Chinese technology.
The original plan was for an 845km route from Bangkok to the Northeast border province of Nong Khai and from Kaeng Khoi in Saraburi to Map Ta Phut in the eastern seaboard province of Rayong.
Premier Prayut was trying to portray a positive scenario: The Thai-Chinese cooperation was still intact but, since Beijing had refused a joint-venture proposal that didn’t include the economic benefits it desired, “we will have to use our own money to build the first stretch of the rail link”.
Prayut probably realised that the first questions to arise would be: Is this economically feasible? What is the rationale behind the decision? Is the Thai-Chinese project still on track? Why does the Thai government have to commit to using Chinese technology and construction firms when this is now a wholly Thai project?
Another interesting twist is that despite the shorter distance, the Bangkok-Korat plan is for a high-speed link, with trains travelling at around 250km per hour. The government had previously revised the plan down to a medium-speed rail link – about 180km per hour. The inevitable question is therefore: What was economic rationale behind this change of plan? Does the projected traffic for the Bangkok-Korat route make the investment worthwhile?
A partial answer was offered by Transport Minister Arkhom Tempittayapaisith when he said construction of the rail project’s remaining 595km has been suspended, pending further consideration. In other words, all the major points now have to be renegotiated, including cost estimates, loan interest rates and the entire range of “fringe benefits” that were a sticking point during the failed talks between Bangkok and Beijing.
The Thai government will come under pressure to ensure that the deal eventually offers concrete benefits for Thailand’s economy – and that the country’s “economic sovereignty” is not compromised by Chinese conditions seen as less than fair and transparent.
Bangkok had proposed that Beijing demonstrate its willingness to share the burden and risk of the project by taking a significant ratio in a joint venture rather than merely offering a loan and demanding that its construction firms and technology be used. Beijing turned that down, arguing that without certain concessions being granted to China, the arrangement would be impossible.
The transport minister also indicated that Beijing suggested its active investment was conditional on China being handed the rights to make economic use of the land corridor around the railway track – a controversial condition that had previously disrupted similar negotiations between China and Laos. Thailand rejected that demand too.
Behind-the-scenes talks will certainly be held to revive the rail cooperation between the two countries. Thailand expects China to show more flexibility and understanding in forging the partnership for this regional transport infrastructure.
Without an agreement that is mutually beneficial, fair, equal and transparent for both sides, the now dim light at the end of the tunnel might turn out to be an oncoming train, hurtling towards a stationery carriage and an accident far more serious than any routine derailment.
