By Namrta Bangia, Director, Southeast Asia Infrastructure
Several ASEAN countries are developing high speed rail (HSR) systems primarily with Chinese investments as part of the Belt and Road Initiative (BRI), with most of these lines planned to eventually connect the region to China. Indonesia, Lao PDR, Thailand, and Vietnam have upcoming projects. In the ASEAN region, Thailand has the biggest plans for HSR projects, with four lines planned to be developed in this decade. A small section of the first line is expected to be operational by end-2022. Indonesia will open its first line, spanning over 140 km, also being built with Chinese investments, in 2022. Amongst the four countries, Lao PDR is expected to operationalise its over 400-km line connecting the country to Kunming in China this year. And finally, Vietnam has just announced plans for the 1,560-km North–South HSR project.
Thailand
Currently, four projects spanning 1,758 km have been planned in Thailand. Table 1 provides an overview of the upcoming HSR projects in Thailand.
Table 1: Overview of upcoming HSR projects in Thailand
| Project | Length (km) | Cost (USD million) | Funding | Status | Year of completion |
| Bangkok–Hua Hin HSR | 211 | 2,400 | Thailand Future Fund | Preliminary/ Planning/ Announced | 2025 |
| Bangkok–Nong Khai HSR | 647 (Phases I and II) | 5,800 (Phase I) | Thailand–China investment | Under construction (Phase I) | December 2022 (Phase I) |
| Bangkok–Rayong HSR | 220 | 6,800 | PPP | Under construction | 2026 |
| Bangkok–Chiang Mai High Speed Project (Phase I: Bangkok to Phitsanulok and Phase 2: Phitsanulok–Chiang Mai) | 680 | 8,700 | PPP | Preliminary/ Planning/ Announced | 2025 |
Source: Compiled by Global Mass Transit Research
Bangkok–Nong Khai HSR
China and Thailand signed a memorandum of understanding (MoU) in 2014 to develop the Bangkok–Nong Khai HSR line. In 2017, the Government of Thailand gave the final approval for the project under the Thailand–China Rail Cooperation Programme and cooperation agreements were signed between the countries.
The HSR line will span 647 km. Itis being developed in two phases (Bangkok to Nakhon Ratchasima HSR and Nakhon Ratchasima to Nong Khai HSR). The trains will have a speed of 250 km/hr. At Nong Khai, the line will connect with the 414.3-km-long China–Laos Railway Line.
Bangkok to Nakhon Ratchasima HSR: The first phase of the project will span 253 km and connect Bangkok with Nakhon Ratchasima.
The investment cost for Phase 1 is USD5.8 billion. As per the Government of Thailand’s estimate, 80 per cent of the project will be financed through internal debt denominated in Thai baht and 20 per cent by external debt in US dollars. In October 2020, the Government of Thailand approved plans to allocate an additional THB23 billion for this phase. The additional funds will be used for procurement of new trains, conversion of rail tracks, and maintenance of infrastructure.
The construction of the first leg of 3.5 km began in December 2017. In March 2019, Thailand-based Civil Engineering Company secured a contract from the State Railway of Thailand to construct an 11-km section (from Sikhio District to Kut Chik in Sung Neon District) under this phase. In July 2019, China Railway Design Group Company Limited completed the detailed design works for this phase.
In October 2020, PTK Joint Venture Company Limited, a joint venture (JV) of Malaysia-based Bina Puri Sdn. Bhd (BPSB) and Tim Sekata Sdn Bhd and Thailand-based NPA Construction, secured a contract to develop a 13.68-km section of this phase.
In November 2020, the State Railway of Thailand (SRT) signed five contracts to construct a 101.15-km-long section of the HSR. These five contracts have been collectively valued at around USD1.32 billion (THB40.27 billion). The contractors are Naowarat Pattanakarn Plc, Thai Engineer and Industry Company, SPTK Joint Venture Company, Italian-Thai Development Plc, and Civil Engineering Plc. Construction is expected to be completed in 2025.
A consortium of WSP Thailand, Epsilon Company Limited, Chotchinda Consultants Limited, and MHPM Company Limited has secured the contract to manage the design and construction of this phase.
Nakhon Ratchasima to Nong Khai HSR: This section will span 394 km. The Ministry of Transport is likely to ask for cabinet approval for the project. This project is expected to be completed by 2026.
Bangkok–Rayong HSR
The HSR line will span 220 km and cover nine stations, spread across five provinces (Bangkok, Samut Prakan, Chachoengsao, Chonburi, and Rayong). It will connect the Suvarnabhumi International and Don Mueang International airports in Bangkok with the U-Tapao airport located in the eastern province of Rayong.
The project involves an investment of THB224.5 billion and is being financed by private players.
Eastern High Speed Rail Link Three Airports Company Limited is executing this project in the public–private partnership (PPP) mode. This is a consortium of Thailand-based Charoen Pokphand Group (70 per cent stake), Bangkok Expressway and Metro (BEM) (10 per cent stake), Italian-Thai Development (ITD) (5 per cent stake), CH. Karnchang (5 per cent stake), and CRRC (10 per cent stake). The consortium will operate the line for 45 years.
The strategic partners for this project are the Japan Overseas Infrastructure Investment Corporation for Transport & Urban Development (JOIN), CITIC Group (formerly known as the China International Trust Investment Corporation), China Resources (Holdings) Company Limited, Siemens, Hyundai, and FS International.
This project has been included in the national government’s Thailand 4.0 strategy and in the Eastern Economic Corridor (EEC) programme. The project was approved by the Eastern Economic Corridor Board (EECB) of Thailand in February 2018.
Recent development: In March 2021, Thailand’s Eastern Economic Corridor (EEC) Policy Committee approved an additional budget of THB2.17 billion for land expropriation. The budget is yet to be approved by the Government of Thailand. The funds will be used for land expropriation for the Suvarnabhumi–U-Tapao (THB607.56 million) and Phya Thai–Don Mueang sections (THB792.11 million). Funds also have been allocated for case appeals by land owners (THB770.48 million).
Passenger operations are expected to commence by 2026.
Bangkok–Hua Hin HSR
The 211-km Bangkok–Hua Hin HSR project is a 1,435 mm standard gauge track project with capacity to operate at a maximum speed of 250 km/hr. There are both at-grade and elevated sections along the route. The scope of works involves laying a new track parallel to the existing track and construction of railway bridges, overpasses, 40 u-turn bridges, 12 underpasses, six container yards, a 4-km elevated track at Hua Hin Station, and 58 new small and large stations that will either be upgraded or built.
The project will be linked to Suvarnabhumi Airport, the Bangkok–Rayong HSR, the Bang Sue–Rangsit Red Line, and the MRT Blue Line. It will help ease travelling between Bangkok and the surrounding areas.
Bangkok–Chiang Mai High Speed Project
This project is planned to be developed in two stages: Bangkok–Phitsanulok (covering seven stations) and Phitsanulok–Chiang Mai (covering five stations). Reportedly, in 2018, Japan reiterated its lack of interest in co-investing in an HSR project and suggested that Thailand should solely invest in the scheme. According to sources, Japan turned away from the project because of viability issues. While the economic internal rate of return (EIRR) was estimated at 14 per cent, the financial internal rate of return (FIRR) was extremely low.
Indonesia
Indonesia’s Ministry of Transportation is currently developing one HSR project, the Jakarta–Bandung HSR.
A 142.3-km (62 km underground) HSR line is being developed to connect the cities of Jakarta and Bandung. Four stations are being built.
It is being developed at an estimated investment of USD6 billion, of which the China Development Bank is expected to fund USD4.5 billion. As of May 2021, the cost is expected to have increased by around 23 per cent. Both China and Japan were interested in investing in the project. However, Indonesia leaned towards China on account of ease of availability of funds. China was willing to offer guarantee-free loans whereas Japan had requested the Government of Indonesia for funding.
Indonesian–Chinese JV Kereta Cepat Indonesia-China (KCIC) is undertaking construction of the line. The majority or 60 per cent of KCIC’s shares are held by the consortium of PT Pilar Sinergi BUMN Indonesia (PSBI), while 40 per cent is owned by Beijing Yawan HSR Company Limited. The PSBI consortium consists of four companies, namely PT Wijaya Karya Tbk with 38 per cent ownership, PT Kereta Api Indonesia and PT Perkebunan Nusantara VIII with 25 per cent each, and PT Jasa Marga Tbk with 12 per cent. PSBI may reduce its shareholding in KCIC to reduce the impact of cost escalation on Indonesian companies.
The project witnessed several delays and the initial completion date of 2018 was shifted to 2021. Construction on the project began in September 2019. The initial delay was due to difficulty in acquiring land for construction as the land was privately owned. Construction was also held up because of labour shortages due to the imposition of travel restrictions during the early months of the coronavirus pandemic. As of May 2021, the project progress was 73 per cent. The project was scheduled to be completed in 2021, but now KCIC is looking to complete the project by 2022.
Recent developments: In March 2021, China’s Sinohydro Bureau 7 Company Limited completed the pre-casting work of 15,390 reinforced concrete rail track slabs for the line. In April 2021, the first batch of 50-metre rails for the HSR were delivered to the track-laying base in Indonesia. The rails have been manufactured in Panzhihua in southwest China.
Once the line is completed, the travel time between the two cities will be reduced from 3 hours to 45 minutes. The line has been designed to have a maximum speed of 350 km/hr.
The project is also a part of China’s BRI. It may be further extended to Surabaya, 760 km east of Jakarta.
Lao PDR
A 414-km HSR link between Vientiane in Lao PDR and Kunming in China is being built. The rail line features 75 tunnels which collectively span 198 km. The project is being undertaken by Laos-China Railway Company Limited (LCRC), a JV between China and Laos.
It is being developed at an estimated investment of USD7.2 billion. It is being financed by the Government of Laos, the Export-Import Bank of China, and Laos-China Railway Company Limited (LCRC). The funding for the project is split between China and Indonesia in a 70:30 ratio. The Export-Import Bank of China will lend a total of USD4.9 billion to Indonesia. A part of the loan tenure will be interest-free. Following this, the loan will be charged at an annual rate of 2.3 per cent for the next 30 years.
The project was launched in 2015. However, construction work only started in late 2016. To overcome pandemic-induced delays and difficulties, Laos is likely to approach China for economic assistance so that the project can be scheduled to begin service in December 2021.
Recent developments: In March 2020, track-laying works commenced in Vientiane, marking the beginning of track-laying works in Laos. This was the first time that the CYP500 track-laying machine was used for construction work in Southeast Asia. In May 2020, the China Railway Guangzhou Engineering Group (CRECGZ) completed the drilling works of the second longest tunnel of the project. The tunnel spans 9.26 km and is located in Oudomxay Province in northern Laos. The works for the tunnel began in May 2017. In September 2020, the Xiang Ngeun No. 3 Tunnel was drilled, thereby marking the completion of the tunnelling works of the HSR line.
The line has been designed to have a maximum speed of 160 km/hr. The project is also a part of the BRI.
Vietnam
Vietnam’s North–South HSR project will span 1,560 km. It is planned to be built at an estimated investment of USD58 billion by 2040. It is at the planning stage.
The North–South High-Speed Railway’s pre-feasibility study was conducted by a domestic consulting partnership led by Transport Engineering Design Inc. (TEDI) with the support of a foreign consultant team, including Padeco-Fukken-Yachio-Ernst & Young. In the pre-feasibility study, the consultancy group proposed the selection of HSR using multiple unit technology and radio control. The consultancy unit suggested a horizontal investment plan to ensure complete investment and to exploit the HSR potential on each section.
- Phase 1 (2020–2032) will construct the Hanoi–Vinh and Ho Chi Minh City–Nha Trang sections.
- Phase 2 (2032–2050) will construct the Vinh–Nha Trang section, which will connect the entire route.
The Ministry of Transport also agreed to select this option in its internal evaluation report. In order to ensure financial feasibility, the consultancy unit proposed applying the PPP model under which the state will provide about 80 per cent of the total investment, while investors will buy trains and equipment at a rate of about 20 per cent as well as take responsibility for operating, maintaining, and paying infrastructure rental fees.
Conclusion
HSR projects are being implemented across the ASEAN region, with some advancing despite delays in construction. These projects are capital and labour intensive and their ROI will be determined over time. There is also a lot of discussion about the role and impact of Chinese investments in expensive HSR projects that could lead to an increase in national debt for ASEAN countries. For example, the much-discussed Singapore–Malaysia HSR project was cancelled after Malaysia cited debt concerns and worries about Chinese influence.
However, Chinese companies are continuing to play an important role in HSR development in the ASEAN region. For instance, they are building an HSR system that will link Kunming, Laos, and Thailand. The line will extend from Bangkok to Nakhon Ratchasima, and then extend to Nong Khai and connect with the Laos system; it will link Vientiane to Kunming later this year.
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