Need to fast-track projects to reap benefits-
A well-integrated railway network is vital for enhancing regional trade and integration amongst Southeast Asian countries. The development of railway networks in the Association of Southeast Asian Nations (ASEAN) region has not received enough focus over a long period of time, primarily on account of factors like low levels of investment and mismanagement of train operations.
However, significant progress has been made in the last one year or so towards rail infrastructure development in the region. Work on the Lao PDR-China high speed rail (HSR) project started in end-2015 while the Singapore-Kuala Lumpur HSR project was approved around the same time. Besides, several projects are at an advanced stage of implementation. Countries like Thailand, Vietnam, Indonesia and the Philippines have also drawn up investment plans to expand their rail networks.
Existing rail network
The existing railway network in Southeast Asia spans only about 20,000 km. At present, Myanmar has the largest railway network in the region, followed by Indonesia, Thailand, Vietnam and Malaysia. Other countries in the region such as the Philippines, Singapore and Lao PDR support very small railway networks. Brunei has a private 19 km railway line operated by the Brunei Shell Petroleum Company.
On a global scale, the railway infrastructure in Southeast Asian countries is ranked behind other regions in the world and is hugely undersupplied. In terms of density, all countries in the region except Singapore are far behind other developing countries. For instance, Myanmar has 0.86 km per 100 square km of rail density as compared to around 2 km per square km in India and 1.3 km per square km in China. Other countries in Southeast Asia have significantly smaller rail coverage (see Table 1).
Key upcoming projects
Significant investments have been planned in the railway segment. This will directly and indirectly offer huge opportunities to contractors, consultants, rolling stock providers, technology/system integrators, and other service providers. According to the Asian Development Bank Institute, there are plans to construct the missing links within the Greater Mekong Subregion (GMS) and Trans-Asian Railway (TAR), and to connect the two regions.
Trans-Asian Railway (TAR): There are two main routes planned, which would connect South Asia and Southeast Asia. These are TAR-S1, which follows the Kolkata-Dhaka-Mahishasan (Northeast India)-Tamu-Mandalay-Ruili (China)-Kunming route; and TAR-S2, which traverses Mandalay-Bago (Yangon)-Mawlamyine-Nam Tok-Bangkok. The primary issues faced in implementing the project are the high cost, too many missing links and the hilly terrain in the region.
GMS: The latest railway strategy document for the region focuses mainly on analysing options for connecting Bangkok, Vientiane, Ho Chi Minh City, Ha Noi, Kunming and Nanning. The document, which does not specify the rail corridors, primarily follows the Master Plan on ASEAN Connectivity that focuses on the Singapore-Kunming rail link. It also talks about the Southern Corridor and the East-West Economic Corridor, including its extension to the Western Corridor in Myanmar. The primary benefit of the rail network is that it holds significant potential for an increase in traffic volumes, both passenger and freight. Besides, it would involve a high economic internal rate of return and therefore, be attractive to investors and operators from the private sector.
Cross-border rail links: One of the most anticipated rail projects in the region, also touted as a game changer, is the HSR line between Kuala Lumpur and Singapore. The 350 km project has been approved and is in the planning stage now. It is expected to cost $20 billion and is planned to be commissioned by 2023. The train service will run at an average speed of 250 kmph, reducing travel time between the two cities to 90 minutes as compared to the 7-8 hours needed currently by train or the 4-5 hours needed by car.
Other key projects like the 845 km China-Thailand rail link at a cost of 530 billion baht and the 427 km China-Lao PDR HSR project worth $6.04 billion were initiated late last year. Further, several rail expansion projects to connect Myanmar with neighbouring countries are in the pipeline.
Indonesia: The Indonesian government is planning to extend its railway network to 12,100 km by 2030, which includes 3,800 km of urban railways. The plan focuses on improving existing railway infrastructure, connecting existing route networks, and developing intra-city train networks in Jakarta.
The government is expected to soon begin construction work on the $5.5 billion Jakarta-Bandung HSR project. The 150 km project, which has been facing issues related to evaluation, is scheduled to be completed by 2019. The project will be developed through Chinese cooperation.
Myanmar: The country is planning to upgrade the Yangon’s circular rail line by investing about $207 million. The fund for the project, which also involves the Yangon Central Railway Station expansion work, will be provided by the Japan International Cooperation Agency (JICA).
Philippines: Recently, JICA has approved a 40-year loan of $2 billion for the upcoming North-South Commuter Rail project in Manila, Philippines. The project will be developed in two phases on a public-private partnership basis. Phase I includes the construction of a 36.7 km line from the existing Tutuban station in Manila north to Malolos. Phase-II includes revamping the existing 478-km line from Manila south to Calamba and Legaspi. The project is expected to be completed in 2020.
Thailand: The 737 km Nong Khai-Map Ta Phut HSR project is at an advanced stage of implementation. The 850 km project is backed by Chinese funding and will involve a double-line railway connecting the Lao border to Bangkok moving eastwards to Thailand’s Map Ta Phut industrial zone (close to the Gulf of Thailand). Further, the country plans to implement the 655 km Chiang Khong-Ban Phachi HSR project at an estimated cost of about $10.9 billion. The two lines will be capable of trains running at 160 kmph. The construction is scheduled to begin in 2016 and be completed by 2021-22.
Vietnam: Vietnam Railways plans to invest 46.7 trillion dong ($2.2 billion) to improve rail safety, and build and upgrade facilities at crossings between nine railway tracks by 2020. In addition, there are plans to upgrade existing tracks on the North-South rail route before two new HSR lines are operationalised in 2030. The upgradation of the North-South railway line consists of 284 km Hanoi-Vinh line and the 366 km Ho Chi Minh City-Nha Trang line and is estimated to cost $56 billion. Further, the 121 km long Bien Hoa-Vung Tau railway project has been planned by the Ministry of Transport. The project is expected to cost $5 billion.
Key challenges
Key challenges faced by the railway sector in the Southeast Asian region include ageing infrastructure (mainly tracks), obsolete signalling and telecommunication systems, and scarcity of spare parts. In addition, the sector also suffers from lack of investment, underutilisation of the existing network, and financial losses faced by railway operators.
There is also a need for an appropriate regulatory framework for facilitating rail transportation in the region. At present, only a few countries in the region have specific railway acts. The railway sector needs a proper regulatory framework to manage various functions such as development of the sector, including planning and implementation of development programmes. It is also important for the authorities to engage the private sector – both in terms of investment and technology/expertise.
Further, a number of Southeast Asia’s rail networks are in drastic need of modernisation. Derailments are common, and poor cross-country connections have placed a strain on the capital, Bangkok, which is densely populated and an economic hub.
Conclusion
It is amply clear that investment in a quality rail network would help increase the share of railways in the total modal share of transport. This will also help in overcoming congestion on roads. It is, however, important to focus more on developing corridors for freight movement. Currently, most countries are focusing on HSR projects. Investment in rail-port connectivity projects and broad gauge rail system will help boost movement of bulk commodities and containers.
Going forward, loans from the newly formed Asian Infrastructure Investment Bank should be utilised for building safe and efficient rail systems. With improved infrastructure in these countries, trade ties with neighbouring countries will improve, which in turn will boost economic growth and help alleviate poverty. N
