General mismanagement

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SHORTLY after its coup last May, Thailand’s new junta shelved plans, drawn up by the elected government it overthrew, for two ambitious rail lines linking the country with China. 

Supporters of General Prayuth Chan-ocha, the coup leader, welcomed the news, as did senior bureaucrats.

“The high-speed train project needs to be put on ice as its viability has yet to be established,” said Somsak Chotrattansri, director of the Budget Bureau, in one memorable comment at the time.

The plan was part of a wider blueprint for a transnational, standard-gauge network linking Bangkok and cities across Thailand’s northeast and central provinces with Laos and China’s southern Yunnan province. 

The long-planned network has in recent years been driven by a China eager for strategic rail freight access to Southeast Asia and Indian Ocean ports.

In Thailand, a first line would link Nong Khai, near the Lao border, with Bangkok and with Map Ta Phut on the southeast coast. A second would link Chiang Khong, also near the Lao border, with Ban Phachi near Bangkok.

But the junta’s decision seemed the final nail in the coffin of the Thai routes, as it followed a shock Constitutional Court ruling in March that a giant planned infrastructure package that included the rail project should be scrapped as too costly in debt terms and lacking transparent funding.

Then, in July, the junta suddenly revived the infrastructure plan, which covers dual-track rail, electric trains, highways, waterways and airports up to 2022. 

By December, it had completed its about-turn, adding to a growing list of its policy flip-flops. Meetings in Beijing that month between Prayuth — now the self-appointed prime minister — and Chinese President Xi Jinping and Premier Li Keqiang saw the first of the rail project’s two lines resurrected.

The junta’s defence of the planned network, estimated to cost US$23 billion (RM83.3 billion) between the two planned lines, is revealing. It had to honour the bilateral agreement that China signed with the previous government to build the new tracks, went the official line. 

Under that deal, the cost would partially be paid for by Thai rice and partially through loans.

“You have my word. Chinese rail is high quality, high standard, high technology and high speed,” Li remarked during another meeting in December he had with Prayuth on the sidelines of a regional summit for countries that share the Mekong river.

Analysts are hardly surprised by the general’s invitation for China to cash in on Thailand’s post-coup infrastructure plans. After all, Beijing played its diplomatic cards well in the months after the coup. 

Its officials and business leaders courted the junta at a time when the military regime struggled to win international support, particularly from Thailand’s allies in the West.

But this Chinese embrace has riled South Korea and Japan, both of which also had an eye on the same turf. Just how incensed South Korea is was revealed this month in an uncharacteristic departure from diplomatic niceties. 

At a meeting in the Thai capital, Suh Seung-hwan, the Korean minister of land, infrastructure and transport, pointedly asked senior Thai officials to explain why the military regime had reneged on assurances —given when Prayuth visited Seoul last year  — that Seoul would have first dibs on the planned railway network.

Japan was also given similar assurances by the regime, and perhaps had even more reason to be miffed as Thailand has been the beneficiary of an eye-opening 242 separate Japanese overseas development assistance (ODA) loans for infrastructure development over the past 50 years. 

These loans include financing for 14 of the 20 bridges across the Chao Phraya river as it flows through Bangkok, as well as 17 projects in the heavy industry zones southeast of Bangkok. ODA loans of 656 billion baht (RM72.9 billion) also helped to build Bangkok’s mass-transit system and the Suvarnabhumi airport.

“We think our ODA loans are more attractive; even the offering rates are better,” said Suichi Ikeda, who heads the Thailand office of the Japanese International Cooperation Agency (JICA), at an event to mark JICA’s 60th anniversary of ODA in late November. “We can offer technical cooperation and Japanese technology with the loans.”

Yet such guarantees failed to impress the junta, which had settled for China by then. As a sop, the junta invited Japan to help build another railway route, linking the town of Mukdahan on Thailand’s eastern border with Tak on the west. 

Negotiations for that project have yet to leave the station, but clearly allowed room for rapprochement as this week Thailand and Japan reached agreement in principle on jointly developing a separate high-speed east-west link. 

It would start at Myanmar’s Dawei port development, enter Thailand at Kanchanaburi, cross Bangkok and enter Cambodia at Aranyaprathet.

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This article first appeared in this week’s edition of The Edge Review at http://www.theedgereview.com

 

This article first appeared in The Edge Financial Daily, on February 4, 2015.