Thailand is moving on with ambitious infrastructure plans for its Eastern Economic Corridor, top government sources have said.

 

“There will be investments in infrastructure projects, especially in the transportation sector on various fronts and related logistics,” Prime Minister Prayut Chan-o-cha said in a recent TV broadcast.

 

For ports, this means pushing on with the third phase of both Laem Chabang and Map Ta Phut ports and boosting land connectivity, he explained.

 

For roads, this means the construction of motorways between Pattaya and Map Ta Phut, Laem Chabang and Prachinburi, and Chonburi and the Klaeng district of Rayong, and improvements to secondary and bypass roads, Prayut said.

 

For rail, this means high-speed railways connecting Bangkok area airports (Don Muang, Suvarnabhumi and U-Tapao), dual-track railway from Laem Chabang to Map Ta Phut, a railway connecting Rayong, Chanthaburi and Trat, and a railway connecting the EEC, Dawei and Cambodia, as well as a box-packing and lifting station in Chachoengsao.

 

Air cargo has not been forgotten, with plans to raise the standards of U-Tapao International Airport by constructing a second runway, an air cargo area and a free zone.

 

Some things, though, have already fallen by the wayside: the original plan was for the high-speed rail link to go on to Rayong after U-Tapao. That extension has now been dropped following concerns over safety and the wish to get things built quickly.

 

More tellingly, the government’s focus on the EEC, the region to the east of Bangkok, has seen the idea of the Thai Canal, also known as the Kra Isthmus Canal, pushed back again.

 

According to government spokesperson Lt. Gen. Sansern Kaewkamnerd, “the issue is yet to be included in the government’s current policies. The Thai Canal excavation project is now under the process of a feasibility study, especially on security and budget. Besides, the government has to tackle other ongoing issues of the more priority in the southern part of the country.”

 

That aside, the government is keen to show how it is steering development in the EEC.

 

“The investment plan is divided into three phases,” said Prayut, who noted that the phases are organized according to priority.

 

“The first phase, or the urgent phase, is 2017 to 2018. This will bring Thai and foreign investors to the project, which will increase the level of economic activity in the EEC Zone,” he said.

 

The second phase (2019-2021) is for continuity and is designed to create transportation connectivity for all economic activities, he added. “The last phase, which starts in 2022, will be geared towards sustainable development of the EEC, which will lead to more revenue and higher income,” he added.

 

As for funding, Thailand will be placing a strong emphasis on PPPs. “Funding of approximately B1 trillion (US$31.9 billion) will consist of 30% from the state budget, 10% from state enterprises, 59% from public-private partnerships and 1% from the navy,” said Prayut.

 

Huge macro and industry benefits flow from this. However, the official view that “expected benefits in the first five years include a new technological base, human resource development, an expansion of national revenue by no less than 5% per year and increased private-sector investment, between B2.1 trillion and B3 trillion (US$67.1 billion to US$95.9 billion) in increased economic value,” need to be viewed cautiously.

 

What Prayut said about the benefits to transportation might prove more achievable, providing the tight timeline can be adhered to.

 

There will be “increased capacity for transporting passengers and goods in the EEC, reduced costs for trucks by around B35.6 million (US$1.14 million) per day and trains by around B230,000 (US$7,311) per day, and reduced travel costs,” he said.

 

Industry response is largely favourable.

 

“The Thai government’s flagship Eastern Economic Corridor (EEC) is poised to enhance the country’s ability to attract foreign direct investments with benefits for a wide range of industries, connectivity to adjacent countries, and to improve overall transport growth. The EEC will also create supply chains in a number of existing and emerging industries, such as next-generation cars, smart electronics, medical and wellness tourism, agriculture and biotechnology, food, robotics, logistics and aviation, biofuels and biochemicals, and medical services,” Gina Galvin, managing director of FedEx Express Thailand, told Asia Cargo News.

 

But there are issues to watch for, according to Ruth Banomyong, an associate professor and head of the Department of International Business, Logistics and Transports at Thammasat Business School in Bangkok. Banomyong is generally supportive of the infrastructure plans but points out that “the challenge is financing.”

 

Banomyong says that while the government is enthusiastic about PPPs, its wish to do the big-ticket, high-profile items on its own leaves the “not-so-good projects” to be offered as PPPs.

 

 

By Michael Mackey

Southeast Asia Correspondent | Bangkok