Thailand’s rail network set for expansion thanks to regional partners

Thailand’s rail transport sector is set to expand over the next decade, with construction on a new high-speed railway line to begin as early as next year while upgrades to the country’s mass rapid transit system are already under way.

Upon completion, these projects – conducted in partnership with China and Japan ­– are set to improve domestic and regional connectivity, and boost economic growth.

Negotiations with China

In mid-September Prajin Juntong, Thai deputy prime minister, announced that construction on the first phase of the Chinese-Thai high-speed railway is expected to begin in the second quarter of next year as government negotiation comes to a close. Prajin further noted that Chinese technology would be used but that Thailand would be “fully responsible for project investment" while speaking at the 13th China-ASEAN Expo in China. The railway is set to connect Thailand to southern China via Laos.

Estimated by Thai officials to cost BT180bn ($5.2bn), the first phase of the standard-gauge double-track railway is expected to span 250 km from Bangkok to Nakhon Rachasima. While this initial phase will make up the southern portion of the rail’s route, the project will also have a segment extending from Nakhon Ratchasima to Nong Khai in the north-east, as well as a section linking Saraburi Province in central Thailand to Rayong Province in the east. 

After completion, the BT468bn ($13.4bn) rail project will span a total of 873 km and connect the city of Nong Khai on the Thai-Laotian border with Bangkok.

The new railway is set to significantly reduce the cost of travel and transporting freight between the two countries. A ticket from Kunming to Bangkok will cost BT3600 ($103), about half the price of a plane ticket, while freight will be transported at one-ninth the cost of air cargo, according to a Chinese media outlet.

Connecting far ends of the country

Japan is also supporting the expansion of Thailand’s railway network, as well as exploring potential rail links to neighbouring countries.

In early August the Japanese and Thai governments signed a memorandum of understanding for a 670-km high-speed railway between Bangkok and the northern city of Chiang Mai following the completion of feasibility studies. While the cost of the project was not disclosed after the recent agreement, last year media reports valued the project at an estimated BT430bn ($12.3bn).

According to Arkhom Termpittayapaisith, minister of transport, once the project details are finalised, a report will be submitted to the Cabinet for approval, which could be as soon as October.

Japanese companies are also currently conducting feasibility studies for rail projects that aim to link Thailand with neighbouring countries, particularly Myanmar, Laos and Cambodia.

A boost to urban connectivity

Japan is also involved in Thailand’s initiative to boost Bangkok’s mass rapid transit system through new commuter railways and extensions of older ones.

In late March the Thai government inked a contract with a Japanese consortium comprised of engineering and electronics company Mitsubishi Heavy Industries, multinational conglomerate Hitachi and trading firm Sumitomo to install electrical and mechanical systems for the Bangkok Metropolitan Rapid Transit’s Red Line, an elevated 40-km commuter railway.

Scheduled for completion in 2020 at a total cost of BT32.4bn ($927.3m), the Red Line will consist of two lines connecting Bangkok’s northern and western areas.

Meanwhile, Bangkok’s 23-km Purple Line – which is being overseen by a Japanese consortium of East Japan Railway, Toshiba and Marubeni – became operational in August, with the Japan Transport Engineering Company, a subsidiary of East Japan Railway Company, having already provided a fleet of 21 train cars.

Two monorail projects – the Pink and the Yellow Lines – are expected to be awarded under public-private partnerships and will connect the capital city to the suburbs. The cost of the 34-km Pink Line is estimated to reach BT56bn ($1.6bn), while the Yellow Line, which is planned to span 30.4 km, is projected to be worth BT55bn ($1.5bn).

Larger picture

The railway upgrades are part of a larger plan to improve Thailand’s infrastructure, which, according to Arkhom, is one of the main obstacles to the country’s economic development.

The projects are part of the government’s programme to spend nearly BT1.8trn ($50.8bn) on 20 major infrastructure projects by 2022. Once under way, the new projects are predicted to boost Thailand’s economic growth rate by one percentage point, with knock-on benefits for the construction and tourism industries.

Oxford Business Group is now on Instagram. Follow us here for news and stunning imagery from the more than 30 markets we cover.

Covid-19 Economic Impact Assessments

Stay updated on how some of the world’s most promising markets are being affected by the Covid-19 pandemic, and what actions governments and private businesses are taking to mitigate challenges and ensure their long-term growth story continues.

Register now and also receive a complimentary 2-month licence to the OBG Research Terminal.

Register Here×

Product successfully added to shopping cart

Read Next:

In Thailand

Despite Covid-19, South-east Asian investors prepare for a flurry of...

The pandemic and its related economic effects prompted a slowdown in initial public offerings (IPOs) in South-east Asia, as it did globally. However, there are indications that the region is set...

In Transport

What’s driving Abu Dhabi’s maritime logistics and trade growth?

Abu Dhabi has strengthened its position as a regional trade and logistics centre, with container traffic at the emirate’s Khalifa Port rising by 82.4% year-on-year in the first half of 2019.

Latest

Covid-19 and Myanmar: can the fledgling insurance sector adapt to the...

Prior to the outbreak of Covid-19, Myanmar's insurance sector was going through a period of rapid change following the entry of foreign insurers in 2019.  Amid the disruptive environment of the...