Master Plan News 2004 August-September

This section contains news of the Master Plan, overall Bangkok development, the Bangkok Governor's development plans, and articles about interconnecting mass transit projects.

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MEGA PROJECTS: But where’s the funding? - The Nation, September 27, 2004
Exactly the same as before the economic crash of 1997, Thailand’s public and private sectors are both announcing plans for grandiose mega-projects, starting within the next five years and carrying a combined price tag of approximately Bt1.92 trillion..

Two Phuket LRT lines - translated and summarized from Manager Daily, September 20, 2004
Phuket Provincial Administration Organization (Phuket PAO) is planning to borrow foreign funds for Phuket LRT lines - (Airport - Pa Tong - Karon - Kata and Ring line). LRT will be run by Phuket Joint Venture Development. Now, Phuket PAO is hiring Prince Songkla U. to deal with route feasibility, investment and the payoff before using this project as collateral for a foreign loan.
Ms Anchalee Wanitthepphabut (Head of Phuket PAO) said they are going to come up with a public organization to handle the development of Phuket. It will be called "Phuket Joint Venture Co.Ltd." The first project is Phuket LRT network to solve traffic jams in Phuket.
Phuket PAO said they will invest in only 2 of 4 lines proposed by PSU since the cost to implement all 4 lines will be 10 billion baht. PSU has studied the feasibility of all four Phuket LRT routes since 200.
The four Phuket LRT lines are
1) Phuket Airport - Pa Tong Beach, Karon Beach - Kata Beach
2) Patong Beach - Provincial Hall
3) Airport - Ratsada - Phuket Provincial Hall
4) Phuket Ring Line
Phuket PAO has chosen the following two routes since there will be lots of local people as well as the tourists and foreigners who are going to ride the LRT:
1) Airport - Patong Beach - Karon Beach - Kata Beach
2) Phuket Ring Line
Phuket PAO will hire PSU to make a deeper study on the feasibility and alternatives, rolling stock, investment, park and ride, stations, number of passengers, and benefits. After that, Phuket PAO will ask for foreign loans with virtually no interest (JBIC is the first choice though) with more than 30 year payback. They will use the project as collateral while they are negotiating for the foreign funds.
This kind of foreign investment can come from the local government without asking for cabinet approval--only OTP approval is fine. They cannot afford to wait for central government funds. Phuket PAO just asks for the approvals from the local council and then they will hire PSU to handle the detailed studies before using the results to ask for foreign loans.
Note: Praises and criticisms can be seen here.
Ed.: Taxi, bus, and rental car companies will not like the Karon-Kata Line.

247 km of new rail lines approved - The Nation, September 8, 2004
As The Nation points out, this is more a political move rather than a practical one:
...After watching its pet candidate lose the Bangkok governor election last week, the government yesterday announced plans to inject Bt500 billion into solving Bangkok's notorious traffic problems.
Transport Minister Suriya Jungrungreangkit said the Cabinet had given the nod to fund the extension of the capital’s mass transit systems across seven routes over the next five years.
Critics said the project has long been on the drawing boards, but the government timed the announcement of the project to shore up the Thai Rak Thai’s waning popularity in Bangkok...
“The new mass transit extensions will be convenient with a station every 500 metres and the route will link the inner city and suburban provinces in Nonthaburi, Pathum Thani making it possible for 4.5 million people to leave their cars and hop on public mass transit,’’ he said...

'Venice of the East' being planned - Bangkok Post, September 8, 2004
This does not sound likely: A new "Venice of the East" will be created around the new Suvarnabhumi international airport at Samut Prakan on Bangkok's outskirts.
A network of canals and Thai traditional houses beside waterways will be protected from urbanisation, a public hearing was told yesterday...
Agricultural land close to the airport would also be protected to retain the area's natural beauty, so that passengers waiting for connecting flights could kill time by taking tours of the canal-based communities. Traditional Thai-style and raft houses would be given the same treatment under the plan...
His team of city planners even dream of storing rainwater in giant plastic bags and floating them in the sea off Samut Prakan. They hope to use the stored water together with raw water from the Prachin Buri dam, 99 km away, and treated water from facilities in Klong Dan to feed the growing communities...

Mass transit stories from The Nation
REAL ESTATE : Mass transit networks fuel boom - The Nation, September 2, 2004
Nils writes: The printed version had an interesting map with small renderings of future train stations/transportation centers (e.g. Hualamphong with the new line to Wongwian Yai passing to the West of the old station building). Don't know if that was just fantasy or based on a real design plan.

Premier Thaksin selling the dream for the new smart card--15 baht for boat/Subway/Skytrain/bus - translated and summarized from Manager Daily, August 28, 2004
Premier Thaksin promised a smart card system for the mass transit system to cut down spending to 15 baht /trip and he promised to deliver the initial phase in two years...
After reaching Wat Sri Boonrueang pier, officers from OTP, Director of Marine Transport, and Krobkura Transport Co.Ltd. came to report about Saensaeb boat service. Marine Dept is asking for 15 million baht budget to modernize 26 pier and another 5 million for two new bridges. BMA City Clerk also told the press that BMA is working on pothole footpaths and dilapidated pathways with a budget of 200 million baht. Furthermore, BMA is working with the Ministry of Natural Resource and Environment to clean up Saensaeb canal.
After reaching Asok Pier, the group rode the Subway at Phetburi to Silom and then changed to the Skytrain at Saladaeng before ending up at Saphan Taksin to see the extension under construction along with Sathon Pier...
Subway was so crowded that Premier Thaksin and cabinet had to stand until some passengers stood to make space for the cabinet. Even Saensaeb boat has so many passengers that it needs help from the government to handle security, the facilities, and lower ticket prices. If possible, the smart card system will cut down the travel price to 15 baht//trip (populist prices). The passengers can even use Smart cards for motorcycle taxis (!) or boats (Saensaeb and Chophraya Express boat). The clearance system will help to give each company a share of ticket prices.
Even though the government has paid 4-5 billion baht to BMA for bus subsidies, it does not work very effectively. Therefore, the government has to take control of all of the system with some more direct subsidies to the passengers instead of the operators. For the stinking Saensaeb canal, MOTC will come up with the plan for pier modernization which will take environment, cleanness, water quality, and the dams along Saensaeb canal into account.
The government claimed that the plan to nationalize BTSC is going very well and eventually the system will be extended to Phetkasem via Tha Phra for people in Thonburi side of Bangkok (still pending - executed after Bangyai line) while MRTA Subway will be expanded as a Skytrain (elevated heavy rail) to Bang Yai to serve the suburban communities in Nonthaburi Province (Tiwanon, Rewadee, Kae Rai, Sanambin Nam, Wat Sai Mah, Bang Buathong, and Bang Yai).
After inspection at Saphan Taksin-Sathon Pier, Premier Thaksin complained about annoying and messy advertising billboards on skyscrapers and asks BMA to invite those who install and purchase the advertising space to come to the Government House for a lunch and then be asked to remove those billboards immediately...
Readers opinions can be seen here.

Premier Thaksin's inspection of Saensaeb Canal boat

Premier Thaksin planning to Inspect Saensaeb Canal and the connection with the Subway and Skytrain - translated and summarized from Manager Daily, August 27, 2004
Minister Suriya told the press that Premier Thaksin is going to inspect Saensaeb canal boat and the connection with the mass transit system. So far there are already 80,000 daily passengers of Saensaeb canal boat, but many complain about the inconvenience. This kind of inconvenience is due to the fact that Krobkrua Transport Co. Ltd. has a monopoly on the route. After the inspection and assessment, MOTC will submit a plan to modernize Saensaeb boat services with new aircon boats, modernized piers and officers who handle the safety of the services.
If Krobkrua Transport Co. Ltd. provides good service, they will stay in business. Otherwise, the concession will be either terminated with a new concession holders or it will be nationalized. To get such support from central government, Saensaeb canal boat service must have ticket prices reduced or they have to come up with joint tickets with the Skytrain and Subway. For the initial estimation, the existing 70 boats carry a price tag of about 100,000 baht each, so the estimated budget for modernization is not more than 100 million baht, a lot cheaper than BMTA subsidies which is now shooting up to 5 billion baht.
Previously, the government has spent billions of baht for BTA subsidies for BMTA buses which are in perennially in the red without any significant improvement of bus services. On the other hand, the boat services (both Saensaeb and Chaophraya) received virtually no subsidies despite much faster service. For the case of new BMTA bus modernization, the new joint ticket with Skytrain and Subway must be installed and the fare box system must be revived.

Premier Thaksin's inspection of Saensaeb Canal and the connection with Subway and Skytrain - translated and summarized from Manager, August 28, 2004
Premier Thaksin and the cabinet as well as TRT members of BMA City Hall and members of District Offices have come to inspect the connections between boats and mass transit system. Initially, Premier Thaksin and company rode the Saensaeb boat from Wat Sri Boonruean pier to Asok pier and then rode the Subway from Phetburi Station to Silom to change to the Skytrain and end up at Taksin Pier (Bangkok side).
People along Saensaeb canal were greeting Premier Thaksin. When Premier Thaksin and company reached Phetburi station, he talked with the Speaker of Royal Thai Police and BMCL officers along with the Subway passengers.
Mr Khumroblux is asking for the budget to modernize Saensaeb boat with air-conditioned boats with a price of 3 million baht for each boat so as to serve 43,000 daily passengers and encourage more passengers to ride boats. This joint ticket for mass transit system as well as the BMTA buses, Saensaeb canal boat and Chophraya express must be a smart card system. This can be done (for the initial phase) in the next 2 years.
[Photographs of inspection along with Thai opinions (most are positive for the plan) can be seen here.]
After the Saensaeb canal inspection, Premier Thaksin granted the initial 15 million baht budget for the pier and boat modernization which includes two new bridges across Saensaeb canal of 5 million baht.
During the inspection, there are lots people following Premier Thaksin such as Minister Suriya, Deputy PM Suwat, Minister Sudarat, Minister Sonthaya, BMA City Clerk, the Board of Direction from OTP. Mr Khumroblux told the cabinet that Saensaeb boat service is very fast, but it needs a modernization of 26 piers with a budget of 15 million baht along with two new bridges across the canal with a budget of 15 million baht. The new airconboats are also necessary. The security must be installed on both sides of Saensaeb canal and the piers.

MEGA-PROJECTS : Slowdown hits infrastructure plans - The Nation, August 26, 2004
...High oil prices, rising interest rates and large debt burdens could crimp the government’s plans to finance Bt1.2 trillion in projects to modernise the country’s infrastructure, experts warned yesterday...
As a result, the government will be forced to seek new sources of financing, probably from private sources, said Nibhat Phukkansut, an adviser to Prime Minister Thaksin Shinawatra...
Nibhat said the government is hampered by a “mistake” it made when it agreed to share the debt of the Financial Institutions Development Fund, which spent Bt1.4 trillion taking over bankrupt finance companies after the 1997-98 crisis.
As a result of the crisis, the government took on Bt1.4 trillion in private debts and made these public, leaving the government with a 15-year burden. The best way for the government to proceed is private sector assistance, Nibhat said...

Opinions on the Bangkok Southern Transportation hub plan - August 16, 2004
Wisarut reports: For the case of the Bangkok Southern Transportation hub plan, this project has stirred fury against the project since local people around Thoed Thai Road said their area is too small to accommodate those buses along with the Skytrian-Subway. The construction will force local people to be separated from the temples around that area. Some temples are very old (about 150-160 years old or even older and deserving to be conserved a national treasure). The local people are asking the government to construct a new transportation hub at Nong Khaem (near Channel 3) or Phutthamonthon Sai 4 (near Mahidol Salaya) instead.

Team Consultant advising BTSC-BMCL merge - translated and summarized from Bangkok Biznew, August 9, 2004
To cut down the burden on the government's plan to nationalize BTSC (Skytrain) and BMCL (Subway), BTSC and BMCL must be merged into a single operator even before the nationalization and then offer an IPO along with a new concession for single operator to run the 292 km planned mass transit system. Furthermore, the government should create new transportation funds and impose automobile taxes to finance the basic infrastructure of 520 billion baht. So far, OTP (Office of Transport and Traffic Policy and Planning) is asking the cabinet for 5 billion baht for the first batch of mass transit system investment.
Team Consultant has asked OTP and the government to set up a government company to handle the service of subway extensions and new lines. This company must purchase or merge BMCL and BTSC before repackaging the company to a new concession holder. The service section and the maintenance section must be separated to allow the service section to make money.
The government could fund the extension via the budget (30-50% of GDP or 120-275 billion baht). Another source of funds will come from a gasoline tax of 1 baht/litre, diesel tax of 0.75 baht/litre, and a new car registration fee of 10,000 baht/car and used car fee 50% higher than the current rate. This will allow revenue of 22 billion baht. Another 20 billion baht will come from the new Wayuphak funds and the other 240 billion baht from loans. This will create construction funds of about 520 billion baht
OTP will submit a plan for the construction of extensions by the end of August or early September to the Board of Land Traffic Management to get approval and clarify the amount of investment and financial resources along with details of implementation. The investment funds needed has shot up from 447 billion baht to 470 billion baht since the initial proposal did not include funds for relocating people and reservation for emergency. 65% (310 billion baht) of the funds will be for civil works and the other 35% (160 billion baht) for rolling stock.
Initially, LPT is asking for 5 billion baht for land expropriation (3 billion baht) and the design (2 billion baht). After that, construction can be started.
The first section to be started is Suvannabhum Airport Link (SRT) with total distance of 28.5 km and price tag of 30 billion baht. SRT is selling the bid form for 1.5 million baht for the form along with the TOR. After getting the winner, the construction can start by the end of 2004 or early 2005. After that, Samrong and Taksin extension of BTS will follow soon.

Road construction: Traffic will hit the brakes - The Nation, August 7, 2004

The intersections to face construction snarls
- Starting this month
Rama III and Sathupradit
Rama III and Ratchadaphisek
Rama III and Narathiwatratchanakarin
Rama III and the new Sathupradit and Industrial Ring Road
Rama III and Charoenrat
Bang Khunthien and Rama II
Charoenkrung and Suwinthawong
- Starting next month
Rama IV and Sukhumvit Soi 42
- Starting in December
Sri Ayutthaya and Rama VI
- Starting next year
Suksawad and Rama II
Rama IV and Soi Kasemrat and Sukhumvit Soi 26
Sri Ayutthaya and Phya Thai
Din Daeng and Prachasongkhroa
Rajvithee and Rama VI
Ekachai and Bang Bon and Bang Khunthien

Details on Christiani & Nielsen and CITIC - translated and summarized from Prachachat Thurakij, August 5-7, 2004
Dr Boon Wanasin MD is persuading Christiani & Nielsen (Thai) PCL to join with CITIC to deal with the Airport Link, MRTA Subway expansion, nationwide double tracking and high speed train.
Christiani & Nielsen (Thai) PCL
Christiani & Nielsen (Thai) PCL (webpage) is the oldest Thai contractor - founded by Danish Businessmen (Rudolf Christiani & Aki Nielsen) in 1904. It has established the branch in Thailand since 1930.
CN-Thai has participated in the reconstruction of Rama 6 bridge (1949-53), Krungthep Bridge, Krungthon Bridge, Nonthaburi Bridge, Klongtoei Port, Rajadamnoen Boxing stadium, Democracy Monument, Namphung Dam, Sarasin Bridge, Rajadamnoen Avenue expansion, SCB Park and Sport Complex in Thammasart Rangsit. It bought the mother company in Denmark in 1992. One of the owners of CN-Thai is the Crown Property bureau (financial manager of Royal family).
Economic hard times in 1997 has caused CN-Thai trouble. The CITIC revitalization will help CN-Thai a lot.
CITIC Group (the contractor giant of mainland China - state enterprise) has 60 companies in the group with a turnover of 5 trillion baht. CITIC Trust and Investment and CITIC industrial Bank will finance the megaprojects for the Thai government. CITIC will hire Siemens (China) to produce rolling stocks for the subway. CITIC expect to get 30% of the subway expansion project. This will enable CITIC to set the base in Thailand after the successful deals in Malaysia and Iran.
Rajadhani Group and CN-Thai will handle 15% of stock while the other 85% will be handled by CITIC Group. 30% of investment will be the rolling stocks and signals along with services while the other 70% will be the infrastructure.

CITIC Group from China keen to invest hundreds of billion of dollars in Thailand - translated and summarized from Manager Daily, August 4, 2004
CITIC Group from mainland China is lobbying Transport Minister Suriya so they can freely invest in the Suvannabhum Airport Link, MRTA Subway expansion, nationwide double tracking, and the controversial Laem Pakbia Project with a total investment of 500 billion baht. Furthermore, CITIC Group is going to grant long-term credit lines to finance the projects which can be paid in agricultural products (crops and livestock) to feed 1.2 billion mainland Chinese.
This kind of generous Chinese investment in Thailand is to help the government of China cool down from economic overheating.
Dr Boon Wanasin MD (Board of Director Chief, Rajadhani group) had a press conference on the cooperation between Rajadhani Group and CITIC International Contracting (subsidiary of CITIC Group - the investment arm of mainland China). CITIC International is going to invest on the megaprojects with 1 trillion baht. Within 5 years, 500 billion baht in major infrastructure would be invested. They expect to win at least 30% of government contracts (200-250 billion baht).
Furthermore, DR Boon Wanasin MD has invited Mr Ma Dum Hong Bo (Board of Director Chief, CITIC International) to have a dinner and discussion with Minister Suriya, Mr Khumroblux, and MRTA Governor about the plan for major construction such as:
(1) Major expansion of MRTA Subway, (2) Suvannabhum Airport Link, (3) Nationwide Double Tracking, (4) the controversial Laem Pak Bia Project, (5) MWA Underground Waterworks Tunnel, (6) Highway expansions
The total IRR at 14% of these 4 project is considered lucrative for CITIC since it is a worthy project even at an IRR of 12%.
CITIC Group is indeed strong and this Chinese conglomerate has very deep pockets since it is the government financial funds of mainland China with CITIC Industrial Bank and CITIC Trust and Investment as the main creditors which has enormous amounts of cash ready for investment.
CITIC has already invested in the following international projects:
1) USD $500 million investment in railways and Tehran subway expansion in Iran through the loan paid in crude oil as well as other products from Iran.
2) Giant bridge connecting Butterworth and Penang Island together in exchange for palm oil and rubber.
CITIC told the Thai government that they are going to invest in Thailand which can be paid in form of the following commodities--without making any intervention in the business in Thailand:
1) Rice, 2) Rubber, 3) Logan and other agricultural products
CITIC will pick up the local Thai contractors like STECON or KPV to create a connection with local partners. They do not want to have a major headache dealing with with Ch Karnchang PCL (Japanese connections) and Italian Thai Development PCL (European connections) while they are working on those projects. The Rajadhani Group will work as the consultant for CITIC with 10-15% shares in some projects.
Even though the Thai government will have lost money (500-600 billion baht) to run the projects, the public investment will create "Cloud Out Problems" on private investments since both public and private sectors are going to scramble after the same funds in the next 5-6 years.
Ma Dum Hong Bo told correspondents that CITIC will talk with the Ambassador of China in Thailand first before telling more about the project details since CITIC is a State Enterprise which has to report about the investment plan to the Chinese government before getting the approvals to go on.
Commentary by Wisarut: Thai netters said this Chinese investment is a good alternative to the Japanese investment since Japanese investment has become more like a loan shark deal with strings attached like a big noose despite the cheap credit from JBIC.
However, Thai railway workers and many Thai railfans still have strong distrusts of railway products imported from China since they have very bad experiences with Chinese railway products such as :
1) cargo trains which usually slip off the tracks
2) broken LPG seals forcing SRT to close down the Northern and Eastern routes fro 4 hours to get rid of the LPG leaking out of the LPG trains with broken seals
3) cargo trains with cracks in the main structure, forcing SRT to decommission them after a few years of service
4) defective bogies which have speed limit set to 55 kph instead of 80 kph
Even China railway has come up with a high-speed rail with local know how (Zhong Yuan Xian Shing). These will have to pass the test on a Beijing-Shanghai route first before planning to sell the system to other countries.

ITD appeals to the government after CITIC's interest in Thai rail projects - translated and summarized from Manager Daily, August 4, 2004 & Thaipost, August 5, 2004
ITD is appealing to the government that Thai contractors could not match giant contractors like CITIC which are 20 times bigger than ITD. Furthermore CITIC group has massive construction and financial resources which enables them to work on contracts without even picking up the local partners.
Therefore CITIC must pick local Thai partners at a significant level before competing for the MRTA expansions, Suvannabhum Airport Link and nationwide double tracking--if they did not come as major creditors alone. ITD does not want CITIC to corner contractor markets in Thailand even though the cost for Chinese engineers is only about 50,000 baht/month/engineer while the Japanese Engineer costs the company 1,000,000 baht/month/engineer.
MRTA Governor said CITIC along with local partners must compete with other contractors consortiums around the world before winning the project even though CITIC has already make a joint venture with Siemens to produce rolling stocks for the Shanghai Metro. Furthermore, CITIC has already worked on the Tehran Subway as well as other rail projects in the Middle East along with a Beijing Subway Expansion for the 2008 Olympics. MRTA will only supply necessary project details for CITIC to compete with other consortiums.
Traffic Policy Office said even though the deal from mainland China is appealing, the investment cost (interest rates) attached to the loan is higher than JBIC loans (3-4% annual rate in US dollar vs. 0.75% annual rate in Yen). Therefore CITIC will be able to compete with JBIC only when they have much better grace period for debts as well as the principles and a stable forex.
Even though CITIC has met with SRT Governor, CITIC has not shown explicit interests in the Suvannabhum Airport Link and nationwide double tracking yet. Turnkey bidding for Airport Link will be in August and companies must have very deep pockets to win the bidding.

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