From Bangkok to Nong Khai: China’s Thai Railway Vision Edges Forward

cc Flickr Clay Gilliland, modiifed,

On 29 March, the State Railway of Thailand signed three contracts with Chinese state-owned firms for civil engineering works on the first phase of a high-speed rail line. The 253km first phase, running from Bangkok to the central province of Nakhon Ratchasima, is part of an envisioned 609 km high-speed line to Nong Khai on the border with Laos. While a deal for phase two is yet to be reached, plans have been confirmed for a railway bridge to be built across the Mekong river from Nong Khai to Vientiane, to link the line to a Chinese-built track in Laos. After years of delays, work on the Thai side is picking up pace.

If all proceeds according to plan, the line would allow passengers to travel direct from Bangkok all the way to Kunming, in southern China, as part of a pan-Asian railway network emerging as part of China’s Belt and Road vision. Thailand is central to these plans, with its railroad eventually connecting to a line under construction in Malaysia, which will extend down to Singapore on the southern tip of the Malay peninsula. Beijing stands to benefit most, as the line would open up a lucrative new overland route for the transit of goods and people from China to the maritime Southeast Asian countries, and vice versa.

Chinese-built railways along the route have been subject to scrutiny. The Kunming-Vientiane railroad, set to be completed in late-2021, has burdened Laos with debt; while the East Coast Rail Link (ERCL) in Malaysia was caught up in the 1MDB financial scandal of the Najib Razak era, before being paused and eventually renegotiated by his successor Mahathir Mohamad.

Having been slow to start, the Thai section has flown under the radar. But with the first phase now getting underway, what benefits might the railway bring to Thailand, and what obstacles lie ahead before the line opens to passengers?


A timeline of the Chinese-Thai rail project

Talks on the high-speed line first began in 2010, leading to a memorandum of understanding being signed by Thailand and China in 2014—the year after the Belt and Road initiative was announced by Xi Jinping. Since then, the project has suffered repeat delays. Work on a 3.5km section of track commenced in December 2017, after a ground-breaking ceremony attended by Thai Prime Minister Prayut Chan-ocha, but is still not finished. The main deal for phase one, which will cost US$5.8bn, was eventually signed in October 2020. It contracts a number of Chinese firms to install electrical, signaling and communications systems, lay the railroad tracks, procure train carriages, and provide training to local Thai workers.

The main phase one contract is divided into 14 sub-contracts—ten have now been allocated, including the three signed in March for civil engineering works, which account for $880m of the project cost.

Trains running on the line will travel at 250km per hour, and will stop at six stations along the length of the route: Bangkok, Don Muang, Ayutthaya, Saraburi, Pak Chong and Nakhon Ratchasima. Thai transport minister Saksayam Chidchob has said he expects the line to be operational by late-2026 or early-2027. In phase two of the project, the track is set to be extended to Nong Khai, adding another 356km to the route.


How much does Thailand stand to benefit?

Thailand stands to benefit as the line will increase connectivity from Bangkok to the remote northeast, sparking business opportunities and driving economic growth in towns along the route. The high-speed line will run alongside an existing single-track railway, primarily used for freight traffic, which is currently being upgraded to dual-track. The existence of that line means that the infrastructure is already in place, avoiding the need for displacement as the new line is constructed across the Thai countryside parallel to the present track. Passenger journey times overland to Laos and China will be cut. Prayut said in October that the line would strengthen bilateral ties and “promote economic prosperity” across the region.

It is also envisaged that the new route will link up with a separate domestic high-speed rail line planned for the outskirts of Bangkok. In 2019, the State Railway of Thailand signed a deal with a consortium that included a Chinese company to build a 220km line, at a cost of US$7.4bn, connecting Suvarnabhumi and Don Muang international airports outside Bangkok to U-Tapao airport in Pattaya, a popular tourist town further south. The project is currently on hold due to budgetary issues, but if it comes to pass, the track will connect to the Chinese-built line to Nong Khai at Bangkok’s almost-finished Bang Sue Grand Station. Taken together, the two projects signify a major upgrade to Thailand’s national transport infrastructure.

This is not to say there are not problems—while Thailand’s stronger economy means it will likely avoid the “debt-trap” narrative that has accompanied the Chinese rail project in Laos, budgets are tight given the economic hit dealt by the coronavirus pandemic to the Thai tourism industry. It might take decades for income from the railway to offset Bangkok’s initial investment and loan repayments. A 2019 United Nations Department of Economic and Social Affairs (UN-DESA) study estimated the line would have to carry 50,000-85,000 passengers daily for twenty years to pay back the Thai government’s initial costs.

There are also wider concerns—as with other similar Belt and Road projects across the region—about how the Thai railway project will be financed. A lack of transparency from Bangkok and Beijing has left the ownership structure and the specific terms of any loans to Thailand unclear. As 2020 demonstrated, Thai citizens are no stranger to anti-government protests, and any perception of shady arrangements or wasting of public money could risk sparking a future Malaysia-style backlash against the railway project. There have already been cost rises to account for a new model of train and revised track specifications.


Thailand in China’s Belt and Road vision

Thailand is a central node in China’s Belt and Road plans, sitting at the strategic heart of an envisioned overland route southward from Kunming. Thailand provides a physical link from continental to maritime Southeast Asia, and could open a new export link for Chinese goods to lucrative middle-income markets in Malaysia and Indonesia. This would hasten existing economic trends, with the ten-strong Association of Southeast Asian Nations (ASEAN) bloc having already become China’s largest trade partner last year.

In Thailand, China also has a willing economic partner. It is not a claimant in the South China Sea—and while it has historically shared close diplomatic and defence ties with the United States and its Western allies, Thailand’s nominally civilian government, led by a former military chief first installed in the 2014 coup, has welcomed Chinese investment alongside Beijing’s vow not to interfere in its domestic affairs.

Looking forward, another rail project in Thailand looms on the horizon. Plans were recently aired by the Thai government for a land rail bridge passing across the narrow strip of territory that divides the Gulf of Thailand from the Andaman Sea. The bridge—intended to connect to deep-water ports on either side of the Malay peninsula—would provide an alternative to the Malacca Strait shipping chokepoint, relied on heavily by China and other East Asian powers for the shipment of oil and consumer goods. According to transport minister Saksayam Chidchob, the region has the potential to become a future “cargo exchange gateway.” If the project is approved, it is a sure thing that China will be among the first looking to invest.

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