Korbsak Sabhavasu's Blog

The Thai Parliament has approved the negotiation framework for the Thailand-China railway. Members of Parliament gave approval during a joint session. During the discussion, there were many questions and objections – which are normal for Parliament.

With the Thai government’s framework established, the next step is to continue negotiations with China. We have to reach an agreement on how the two countries will cooperate to develop the State Railway of Thailand. When we finally come to a conclusion, we will write an MOU (Memorandum of Understanding).

Our new Constitution is very strict in this regard. Before the government can begin any negotiations with any country, the framework for negotiations needs to be brought to Parliament for approval. Then, after the negotiations are finished, we have to present a draft of the MOU to Parliament before we can sign the agreement.

It is up to Parliament to determine if negotiations have occurred within the framework, and whether or not the country could be put at a disadvantage. Parliament has the right to reject the MOU. If that happens, management has to renegotiate the issues.

Parliament will wrap up at the end of November and reopen in late January next year. The Government doesn’t have time to hold negotiations and present the MOU to Parliament before the end of session in November, and will have to wait until next year. If there’s an election in the meantime, the new government will have to follow up.

How long will negotiations take to reach an agreement on an MOU? If the government is ready and well-prepared, negotiations are not going to be too difficult.

If you want to know what China has in mind, you can look at the MOU between China and Laos.

Laos and China set up a cooperative, each holding 50% of stock. Laos uses the land along the tracks. China pays for the construction. Whether profitable or unprofitable, it will be managed as a joint venture, with half of the shareholders coming from each party.

The MOU between Thailand and China will not be like the agreement between Laos and China, because the economies of Thailand and Laos are quite different. Initially, I believe that setting up a joint venture is an interesting approach that would be mutually beneficial. However, I want Thailand to hold a slightly greater share, which will have to be discussed with explanation.

The stock investment from both parties should be in cash because it is more flexible and easy to estimate the value. There are a lot of other issues to be negotiated, but it’s still early in the process.

The main idea is to negotiate a real partnership, with no advantages or disadvantages for other party. Neither side should negotiate in order to take advantage of the other party. If we gain, we gain together, and if we lose, we lose together.

The framework for cooperative negotiations focuses on the form of Thai-Chinese joint venture investments. After that, we’ll discuss the sources of funds and the amount of loans for use in the management and construction of the railway, including the matter of oversight of the train operations and duration. The routes are probably Nong Khai to Bangkok as the main line, and then Bangkok to Rayong and Bangkok to Padang Besar.

In discussing the project, it is especially important to focus on the transfer of technology from the Thai-Chinese joint venture to the Thai railway. We cannot neglect the concept of providing extra benefits for each other’s businesses.

The Ministry of Finance, the Ministry of Transport, the Department of Foreign Affairs and the Security Department should be involved in the negotiations. The project will involve many ministries, not just one. From the outside, the negotiations do not appear to be easy, but they should not exceed the ability of the respective governments.

That’s enough about the negotiations. Let me tell you more about the story behind the Thailand-China Railway Project and how it began.

I had the chance to visit China with the Prime Minister during my tenure as deputy prime minister responsible for the care of the economy in the middle of 2553. During that visit, I had a chance to meet with the Chinese minister who oversees the Chinese railway. At the time we discussed several issues, but did not continue our talks, and I was later appointed Secretary General to the Prime Minister.

Deputy Prime Minister Suthep said he would go to China and continue talks on the railway (almost a year later), so I told him to discuss the Kun Ming-Vientiane route to see if China would be interested if we were ready to make a connection down to Malaysia. Suthep liked the idea and said he would try his best to negotiate.

After he returned from China, he immediately reported to the Cabinet on the success of the talks, and asked them to appoint me Chairman of the Board to negotiate with China. I was taken by surprise, but promised to serve only during the cooperation negotiation.

As soon as the Cabinet signed off, China immediately sent officers to Thailand to meet with my team and me both formally and informally until the framework for negotiations was brought to Parliament.

If we look at the development of China, we can clearly see that the Chinese people think and act in a systematic way. Let’s go back to the time when China began to take possession of Hong Kong. That day, the world began to understand more about China’s views that a political regime could coexist with a capitalist economic system.

Every 10 years, China would use money to develop the country step-by-step, starting with transportation routes, primarily roads. Back then, many analysts made fun of China, saying they made big roads for bikes. Later, China began building cities. You could say that China built a city the same size as Chicago every month. Again people gossiped, saying that the cities would soon be deserted.

Now, China has started to build trains all over the country. China needs to connect big cities to rural areas, and there is no better method than rail. China’s railways have modern trains running at 120km/hr for shipping and at more than 200km/hr for passengers. The bullet trains with heads like missiles run at more than 300 km/hr.

This is the railway system that we are negotiating and hope to adapt for use in our country. If the Bangkok-Rayong route is worth building a bullet train, then we should do it. But if running at 200 km/hr is enough, and allows for cheaper fares, then the government should make that decision.

I think you have a little better picture on the project. The train would run from Kun Ming to Vientiane to the Mekong river bridge as the first station, then from Nong Khai to Udon Thani to Khon Kaen to Khorat to Bangkok to Padang Besar, and finally, to Singapore.

Thailand will benefit the most because the trains would run more than 1600 km through our country. Wherever tourists stop or visit, the stations in that province will earn money, creating jobs and effectively providing more channels for goods to reach the market.

Seeing an opportunity this good, I can’t help but regret that the project has been delayed.