Thailand eager to accelerate rail link

Thailand will further boost international trade and inject greater stimulus into its domestic economy by speeding up its connection with the China-Laos Railway, experts said.

"The China-Laos Railway project has opened a new logistics mode in the region," said Joe Horn-Phathanothai, founder and CEO of Strategy613, an investment consultancy in Bangkok that focuses on China and Thailand. One of his clients has already been able to transport goods, including packaging materials, consumer products and accessories, from China to Thailand via the railway.

Horn-Phathanothai praised the Thai government's efforts to enhance the country's connection with the China-Laos Railway, which he said will be highly beneficial for industries and trade.

The railway, which began operations on Dec 3, is an important part of the pan-Asian railway network that will ultimately connect Kunming, in Southwest China's Yunnan province, with Bangkok and Singapore.

Thailand's Transport Ministry has said it is looking to connect the country with the China-Laos Railway to create a seamless interborder transportation link, the Bangkok Post reported on Jan 18.

The railway link presents a substantial opportunity, as Thailand currently operates passenger and cargo train services to Thanaleng station in Laos' capital, Vientiane, said Transport Minister Saksayam Chidchob.

In addition, the State Railway of Thailand was ordered by the Thai Cabinet on Jan 13 to build a second bridge from Nong Khai in northeast Thailand to Laos, to connect with the China-Laos Railway.

Piti Srisangnam, an associate professor of economics at Chulalongkorn University in Bangkok, said Thailand needs to accelerate the connection with the China-Laos Railway, as it can encourage the country to speed up reforms in its logistics and transportation system while providing an alternative option for trade.

For example, throughout the pandemic, the logistics cost to transport a container box via sea routes from Thailand to European countries and the Americas has increased at least 200 percent, and on occasion was up to 10 times higher than pre-pandemic levels, he said.

The alternative route enabled by the China-Laos Railway will also allow Thailand to transport goods to China, Central Asia and even European countries taking part in the Belt and Road Initiative, said Piti.

By connecting 15 Chinese cities with Thailand, Singapore and several other countries involved in the BRI, the China-Laos Railway has so far carried over 1 billion yuan ($157.6 million) worth of international freight, according to Xinhua News Agency, which cited Kunming Customs data.

In March last year, the Thai government and a Chinese construction consortium signed an agreement for the China-Thailand high-speed railway project's first phase, which will link Bangkok with the northeastern Thai province of Nakhon Ratchasima, aiming to make it operational in 2026.

The project will eventually link Bangkok with Nong Khai on the border with Laos to connect with the China-Laos Railway.

Horn-Phathanothai of Strategy613 said it is also important for Thailand to utilize its existing transportation system to connect with the China-Laos Railway.

"We can use the existing one to build a kind of little interchange hub," he said.

Surasit Thanadtang, director of the Thai-Chinese Strategic Research Center at the National Research Council of Thailand, said the government's efforts to enhance Thailand's ties with the China-Laos Railway is "happening at the right time and at the right place".

"This model can (help) build an integrated logistics system of the China-Indochina Peninsula Economic Corridor," said Surasit. The Indochina Peninsula is an important link in the BRI.