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China to invest billions on Thai rail lines to be ready by 2022


Lite Beer

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If there one thing I have learnt over the years it is that a Chinaman never gives money away without some form of pay back assured,

The Chinese are not giving anything. They will have 80% equity in the rail project and to payback the Chinese, Thailand will pay them 80% of the revenues until the project is paid offf. Since the Chinese will also design and construct the project, it's a great deal for them.

I was under the impression you cant own more that 49% if non Thai.

Does anyone think this will even happen ?

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What are the Chinese getting ???

This is simply a freight line to distribute Chinese goods throughout SE Asia, with a few passenger trains thrown in for appeasement. It also seems to head through a couple of big Industrial areas here simply reinforcing the freight priority. Cant truthfully see that Thailand is getting much out of this at all. To be connected (eventually) to the rest of the Thai network it would of course mean a full upgrade to standardise the gauge but whether the Chinese will pay for this too...I doubt, after all, what would they gain from an expensive double track standard gauge route from Chiang Mai to Had Yai to meet up with the new standard gauge Malaysian Network ?

Thailand has simply signed over a load of land for the Chinese to build a mainland SE Asia distribution network....ridiculous.

I recently came from Butterworth to Bkk on the train- same carriages all the way, so if the gauge is different, how does that work?

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What a pack of fools these anti-everything's are they don't have the faintest idea what they are writing about.

They don't even seem to know that China is now Thailands top export destination :

Top 5 Export destinations of Thailand China (14%), Japan (10%), United States (9.7%), Indonesia (5.2%), andMalaysia (5.0%)

http://atlas.media.mit.edu/profile/country/tha/

This can only grow with new rice and rubber deals and a rail network that can get perishable agricultural produce quickly to a huge population.

It will mean that farmers in Issan can actually grow specific products that are in demand and fetch high prices in China.

There will be other benefits such as SME's setting up businesses along the route to target export markets in China as well as having easy access to markets farther south.

This line will also pass through Lao to Vietnam which is No 8 export destination and will eventually connect through to Malaysia, No 4 on the export list and Singapore No 5.

Consider that all this has been set up by the present Govt , how many weeks has it been in place ?

Tell us what was done by the previous administration....yackity yak bring Thaksin back.

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What are the Chinese getting ???

This is simply a freight line to distribute Chinese goods throughout SE Asia, with a few passenger trains thrown in for appeasement. It also seems to head through a couple of big Industrial areas here simply reinforcing the freight priority. Cant truthfully see that Thailand is getting much out of this at all. To be connected (eventually) to the rest of the Thai network it would of course mean a full upgrade to standardise the gauge but whether the Chinese will pay for this too...I doubt, after all, what would they gain from an expensive double track standard gauge route from Chiang Mai to Had Yai to meet up with the new standard gauge Malaysian Network ?

Thailand has simply signed over a load of land for the Chinese to build a mainland SE Asia distribution network....ridiculous.

I recently came from Butterworth to Bkk on the train- same carriages all the way, so if the gauge is different, how does that work?

According to Wikipedia, Malaysia's inter city railway is metre gauge. http://en.wikipedia.org/wiki/Rail_transport_in_Malaysia#Metre_gauge_rail

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What are the Chinese getting ???

This is simply a freight line to distribute Chinese goods throughout SE Asia, with a few passenger trains thrown in for appeasement. It also seems to head through a couple of big Industrial areas here simply reinforcing the freight priority. Cant truthfully see that Thailand is getting much out of this at all. To be connected (eventually) to the rest of the Thai network it would of course mean a full upgrade to standardise the gauge but whether the Chinese will pay for this too...I doubt, after all, what would they gain from an expensive double track standard gauge route from Chiang Mai to Had Yai to meet up with the new standard gauge Malaysian Network ?

Thailand has simply signed over a load of land for the Chinese to build a mainland SE Asia distribution network....ridiculous.

I recently came from Butterworth to Bkk on the train- same carriages all the way, so if the gauge is different, how does that work?

According to Wikipedia, Malaysia's inter city railway is metre gauge. http://en.wikipedia.org/wiki/Rail_transport_in_Malaysia#Metre_gauge_rail

Thanks.

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What are the Chinese getting ???

This is simply a freight line to distribute Chinese goods throughout SE Asia, with a few passenger trains thrown in for appeasement. It also seems to head through a couple of big Industrial areas here simply reinforcing the freight priority. Cant truthfully see that Thailand is getting much out of this at all. To be connected (eventually) to the rest of the Thai network it would of course mean a full upgrade to standardise the gauge but whether the Chinese will pay for this too...I doubt, after all, what would they gain from an expensive double track standard gauge route from Chiang Mai to Had Yai to meet up with the new standard gauge Malaysian Network ?

Thailand has simply signed over a load of land for the Chinese to build a mainland SE Asia distribution network....ridiculous.

I recently came from Butterworth to Bkk on the train- same carriages all the way, so if the gauge is different, how does that work?

There is a new double track project underway now from Singapore through Malaysia to the Thai border.

http://www.abe-industry.com/railim/index.php/en/newsflash/156-malaysian-electrified-double-track-rail-project-progresses.html#.VJYuW14AA

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If there one thing I have learnt over the years it is that a Chinaman never gives money away without some form of pay back assured,

The Chinese are not giving anything. They will have 80% equity in the rail project and to payback the Chinese, Thailand will pay them 80% of the revenues until the project is paid offf. Since the Chinese will also design and construct the project, it's a great deal for them.

The deal will be structured as part Thai government funding, part soft loan from the Chinese, and partly a PPP (Public-Private partnership) for the operations and development of stations and facilities along the route.

The ratio of the above is still to be decided, but it may mean that the Thai government would only have to guarantee around 20% of the total cost of the project at the outset.

My concern is the interest rate for the Chinese soft loan - recent deals have been at around LIBOR +2.7% which is quite high (because t is a variable rate loan), so they should make sure it is a much lower rate as a fixed interest rate - better than the US EX-IM bank rates or the ADB.

The Japanese funding agencies have a fixed rate of 0.6% for a 40 year loan for countries in Thailand's bracket, and a variable rate below LIBOR.

One project in Myanmar is quoted as having failed due to the high interest rate demanded by the Chinese

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So no Chiang Rai line then? Instead the rail line is going through Isan. No wonder they still think the Shins rule

Too many earthquakes in Chiang_Rai province and no petrol as we have in Issan tongue.png

"no petrol"

Just to point out that the Fang oil-fields have been producing, albeit in a small way, for over 50 years.

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So little trade with China, why the train ? There will be alot of freight coming from China to the port and empty train cars returning to China.

1. The container-freight will be going to Laem Chabang & Map Tha Put ports, with some benefit to Thailand by increasing volume through them, rather than sending the Chinese exports-to-the-world all the way down to Singapore.

2. It will make exporting Thai rice & rubber northwards easier & cheaper, also other Thai industrial-goods, if they can compete in China.

3. An 80% : 20% investment places the cost & risk with the main beneficiary, China, rather than loading it mostly onto Thailand. thumbsup.gif

4. There remains the risk of flooding Thailand with cheaper Chinese goods, hitting Thai producers, not sure how Thailand plans to prevent that ?

5. There remains the risk of Chinese products being relabelled "Made in Thailand", to bypass any possible future trade-barriers against the floods of Chinese exports, but getting Thailand added to the list, or of trade-rows about how much further processing is done here, to Chinese part-finished goods. The devil may be in the detail on that one.

6. Following years (decades ?) of over-optimistic forecasts, as to when this project might be completed, 2022 looks perhaps more realistic/achieveable ?

7. Not sure whether there will be any passenger-traffic, on this new line, it could only ever be a side-show compared to the freight which is (and ought to be !) what this is all about. But the "Thai high-speed passenger-railway network" mooted by Yingluck/PTP was only ever a pork-barrel for domestic voters' consumption.

8. This may be a nail in the coffin of other ideas for lines through Burma to any new ports (with little/no current shipping) like Tawei.

All just my personal opinions, of course.

Edited by Ricardo
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<snip>

8. This may be a nail in the coffin of other ideas for lines through Burma to any new ports (with little/no current shipping) like Tawei.

All just my personal opinions, of course.

It could add value to the Dawei port. Getting Chinese products across to the Indian Ocean without going through the Malacca Straits would be an big advantage. It will depend on the progress of port and line development into Yangon though.

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What a pack of fools these anti-everything's are they don't have the faintest idea what they are writing about.

They don't even seem to know that China is now Thailands top export destination :

Top 5 Export destinations of Thailand China (14%), Japan (10%), United States (9.7%), Indonesia (5.2%), andMalaysia (5.0%)

http://atlas.media.mit.edu/profile/country/tha/

This can only grow with new rice and rubber deals and a rail network that can get perishable agricultural produce quickly to a huge population.

It will mean that farmers in Issan can actually grow specific products that are in demand and fetch high prices in China.

There will be other benefits such as SME's setting up businesses along the route to target export markets in China as well as having easy access to markets farther south.

This line will also pass through Lao to Vietnam which is No 8 export destination and will eventually connect through to Malaysia, No 4 on the export list and Singapore No 5.

Consider that all this has been set up by the present Govt , how many weeks has it been in place ?

Tell us what was done by the previous administration....yackity yak bring Thaksin back.

I think you will find most of the planning was done by the previous government. A preferred route had been chosen and funding was coming online. You may recall they had other things to worry about for the last 12 months or so of their administration not the least beening a hostile senate (no funding approval) and riots on the streets.

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What a pack of fools these anti-everything's are they don't have the faintest idea what they are writing about.

They don't even seem to know that China is now Thailands top export destination :

Top 5 Export destinations of Thailand China (14%), Japan (10%), United States (9.7%), Indonesia (5.2%), andMalaysia (5.0%)

http://atlas.media.mit.edu/profile/country/tha/

This can only grow with new rice and rubber deals and a rail network that can get perishable agricultural produce quickly to a huge population.

It will mean that farmers in Issan can actually grow specific products that are in demand and fetch high prices in China.

There will be other benefits such as SME's setting up businesses along the route to target export markets in China as well as having easy access to markets farther south.

This line will also pass through Lao to Vietnam which is No 8 export destination and will eventually connect through to Malaysia, No 4 on the export list and Singapore No 5.

Consider that all this has been set up by the present Govt , how many weeks has it been in place ?

Tell us what was done by the previous administration....yackity yak bring Thaksin back.

I think you will find most of the planning was done by the previous government. A preferred route had been chosen and funding was coming online. You may recall they had other things to worry about for the last 12 months or so of their administration not the least beening a hostile senate (no funding approval) and riots on the streets.

The Abhisit government also did some work on the train routes from Nong Khai to Bangkok, Bangkok to Rayong and Bangkok to Pedang Besar. The PTP government shifted the focus to a Bangkok to Chiang Mai line as the first in the queue.

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I think you will find most of the planning was done by the previous government. A preferred route had been chosen and funding was coming online. You may recall they had other things to worry about for the last 12 months or so of their administration not the least beening a hostile senate (no funding approval) and riots on the streets.

"most of the planning was done by the previous government"

It predates Yingluck & PTP slightly. wink.png

The Kunming-Singapore rail-link was first proposed by the British & French Empires in 1900, and revived in 2000 by ASEAN, and the past several Thai administrations have been playing with various ideas for the Thai section(s) of it.

http://en.wikipedia.org/wiki/Kunming%E2%80%93Singapore_Railway

Yingluck was talking about a passenger-only high-speed domestic-network, which played well to the Thai voters, but didn't serve the wider strategic needs of the Chinese. And it only went halfway up to her hometown of Chiang Mai, the remainder was to be built at some time in the future, by some nebulous commercial-group which never existed.

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What a pack of fools these anti-everything's are they don't have the faintest idea what they are writing about.

They don't even seem to know that China is now Thailands top export destination :

Top 5 Export destinations of Thailand China (14%), Japan (10%), United States (9.7%), Indonesia (5.2%), andMalaysia (5.0%)

http://atlas.media.mit.edu/profile/country/tha/

This can only grow with new rice and rubber deals and a rail network that can get perishable agricultural produce quickly to a huge population.

It will mean that farmers in Issan can actually grow specific products that are in demand and fetch high prices in China.

There will be other benefits such as SME's setting up businesses along the route to target export markets in China as well as having easy access to markets farther south.

This line will also pass through Lao to Vietnam which is No 8 export destination and will eventually connect through to Malaysia, No 4 on the export list and Singapore No 5.

Consider that all this has been set up by the present Govt , how many weeks has it been in place ?

Tell us what was done by the previous administration....yackity yak bring Thaksin back.

I think you will find most of the planning was done by the previous government. A preferred route had been chosen and funding was coming online. You may recall they had other things to worry about for the last 12 months or so of their administration not the least beening a hostile senate (no funding approval) and riots on the streets.

The Abhisit government also did some work on the train routes from Nong Khai to Bangkok, Bangkok to Rayong and Bangkok to Pedang Besar. The PTP government shifted the focus to a Bangkok to Chiang Mai line as the first in the queue.

I would not dispute that. Those routes were further developed by the following governments and would assume they are being further developed now. Lets just hope it finally gets up and running ASAP as it will be a great asset for Thailand. Have a good map of the Nong Khai route. Have tried uploading here without success. Tried 3 different browsers, pdf and jpg. Both files less than 80mb.

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<script type='text/javascript'>window.mod_pagespeed_start = Number(new Date());</script>

If there one thing I have learnt over the years it is that a Chinaman never gives money away without some form of pay back assured,

The Chinese are not giving anything. They will have 80% equity in the rail project and to payback the Chinese, Thailand will pay them 80% of the revenues until the project is paid offf. Since the Chinese will also design and construct the project, it's a great deal for them.

The deal will be structured as part Thai government funding, part soft loan from the Chinese, and partly a PPP (Public-Private partnership) for the operations and development of stations and facilities along the route.

The ratio of the above is still to be decided, but it may mean that the Thai government would only have to guarantee around 20% of the total cost of the project at the outset.

My concern is the interest rate for the Chinese soft loan - recent deals have been at around LIBOR +2.7% which is quite high (because t is a variable rate loan), so they should make sure it is a much lower rate as a fixed interest rate - better than the US EX-IM bank rates or the ADB.

The Japanese funding agencies have a fixed rate of 0.6% for a 40 year loan for countries in Thailand's bracket, and a variable rate below LIBOR.

One project in Myanmar is quoted as having failed due to the high interest rate demanded by the Chinese

Thailand can make a loan to ITSELF by issuing Thailand treasury bonds with a low fixed rate, just as it did to pay off Yingluck's rice pledge program and provide debt relief to the public for loan shark household debts and to farmers for paying off capital improvements. The problem might be that there would be more transparency and accountability with domestic financing than with government-to-government financing. NACC announced that it will review the G-G deal.

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I read in the BKK Post today - 21 Dec (link not allowed by mods), that there are two parts to the project - something I must have missed before.

The first part is building (or rather extending?) six double track metre-gauge lines covering 887km at a cost of 127.5 billion baht, and due to be finished in 2020.
The idea is to increase narrow gauge capacity 268 trains per day up to 800 trains - to include passenger and freight trains.

The second part is obviously the standard gauge project.

Does anyone have any details on extending the narrow gauge system that exists already - is there a date it is scheduled to begin, for example?

Edited by bluesofa
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This massive infrastructure projects will bring wealth to the NE in the same way rubber and palm oil to the South, some 30 years ago. Rubber and palm transformed the economic landscape and brought the South better income and allowed more to be educated and gave them better standard of living. Meanwhile, poverty in the North fell behind compare to the South and Central and have almost 65% nation wide poverty. As we speak, the NE is getting the lion share of investments and growing at double digit GDP from increase border trades and young large work force. Next 10 years will see a reversal of poverty growth if the South still depend on the two main crops. This will also play a big part in the political scenario. The Dem will continue to see things happening from the rear view mirror.

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I read in the BKK Post today - 21 Dec (link not allowed by mods), that there are two parts to the project - something I must have missed before.

The first part is building (or rather extending?) six double track metre-gauge lines covering 887km at a cost of 127.5 billion baht, and due to be finished in 2020.

The idea is to increase narrow gauge capacity 268 trains per day up to 800 trains - to include passenger and freight trains.

The second part is obviously the standard gauge project.

Does anyone have any details on extending the narrow gauge system that exists already - is there a date it is scheduled to begin, for example?

Two parts: one a general upgrade of single track to double track, the other part being the standard gauge track from Nong Khai with China's participation.

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Also why can an unelected PM who used to be army chief who called the shots that led to the coup, that has kept all Thailand under martial law allowed to decide such a deal with China. This will end up bad for Thailand and cost its citizens much. The General has just signed away Thailand to China. You are all now Chinese slaves.

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Also why can an unelected PM who used to be army chief who called the shots that led to the coup, that has kept all Thailand under martial law allowed to decide such a deal with China. This will end up bad for Thailand and cost its citizens much. The General has just signed away Thailand to China. You are all now Chinese slaves.

"why can an unelected PM"

Because he is now the legal P.M., regardless of how he originally came to power, so he & his government can govern the country ?

Personally I'd say that, in getting China to pay most of the cost of the freight-line project, he's got an improved-deal, on what was previously proposed.

And Thailand remains free to continue to upgrade/double the existing SRT metre-gauge passenger/freight network, at whatever pace it wants or can afford, higher-speed services and onboard-meals and all !

It will be interesting to see how much corruption there will be, under the successive governments through the life of the Chinese project, and what degree of transparency there is. Also how much involvement the Chinese are able to wrest from the hands of the Thais, and how they go about doing so, years of fun for us farang casual-observers ! rolleyes.gif

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