Contracts should be signed this year for the massive infrastructure project in the East
Thailand is gearing up its much-heralded Eastern Economic Corridor (EEC) mega-development programme ahead of the general election expected to be held early next year.
Last Wednesday, the State Railway of Thailand issued an invitation to Thai and foreign private investors to submit proposals for construction of a high-speed rail link connecting Suvarnabhumi, Don Mueang and U-tapao international airports. The Bt200-billion scheme is a crucial component of the EEC programme, with bid winners and contract signings expected by the year’s end.
Overall, various components of the EEC programme, which covers parts of Rayong, Chonburi and Chachoengsao, will entail a combined investment of Bt1.7 trillion, to be financed by both the public and private sectors. For example, each of the consortiums bidding for the right to invest in the tri-airport rail link and related commercial development is required to have a combined credit facility of no less than Bt120 billion.
According to the government’s blueprint, various transport infrastructure projects are designed to seamlessly create an inter-modal logistic connectivity in the EEC region that will be later linked with China’s Belt and Road Initiative (BRI).
In fact, Thailand is situated at the centre of the BRI’s China-Indochina Peninsula Economic Corridor, one of the six economic corridors envisioned by Beijing to link China with Southeast Asia, Europe, Russia, Pakistan and India, among other locales.
KPMG, which advises the Thai government on the U-tapao airport development project, another component of the EEC programme, said the tri-airport rail link will also help ease congestion at Don Mueang and Suvarnabhumi airports by upgrading U-tapao as the country’s third major airport. A feasibility study is underway on building a second runway and third passenger terminal at U-tapao in Rayong to boost its capacity to 55 million passengers per year.
The Bt200-billion project will be implemented under the Public-Private Partnership (PPP) framework, consisting of a maintenance, repair and overhaul facility for jetliners, cargo facilities, a free-trade zone, commercial gateway, medical cluster and military zone.
Other key EEC projects include the Bt150-billion Laem Chabang seaport expansion project to boost the port’s annual capacity to 18 million containers; the Bt11-billion Map Ta Phut expansion; and the Bt64-billion double-track railway project linking EEC industrial zones with seaports.
All these massive investment plans are sanctioned by special EEC legislation enacted by the National Legislative Assembly. This provides the legal support for policy continuation following the general election.
More importantly, it is obvious that Thailand has lost more than a decade of infrastructure investment opportunities due to the prior political unrest, resulting in the country’s economic under-performance despite its geographical and other forms of potential.
In this context, there is a high probability that the EEC mega-investment programme will go ahead regardless of the next election’s outcome as the country still lags behind its Asean neighbours in terms of economic growth rates.
The latest quarterly GDP growth of 4.8 per cent, recorded in the first quarter of this year, shows that the country has the potential to grow its economy beyond the 5-6 per-cent annual growth rate once infrastructure bottlenecks and other issues are resolved.