Express link coming off the rails?
Will this be another costly lesson for a country that never learns from its mistakes? To be sure, it's another nail in the coffin for whatever remains of Suvarnabhumi Airport's international stature.
Airport train running late
The Nation, June 10, 2007
The multibillion-baht Airport Rail Link from Makkasan to Suvarnabhumi is way behind schedule and over budget.
Last week experts met to thrash out how it can be saved before banks pull their support.
The link was started during the tenure of the deposed Thaksin Shinawatra government and there are allegations that poor planning and corruption sent costs spiralling from an original estimate of Bt25.9 billion to over Bt30 billion.
State Railway of Thailand (SRT) deputy governor Nakorn Chanthasorn said the situation was critical.
"Originally, we were supposed to pay for the link after it was completed. Politicians intervened and the previous Cabinet resolved that we would pay up 990 days after work commenced," he said.
"This means the SRT needs to find as much as Bt22.6 billion within the next few months. We are asking for a Cabinet solution."
Those familiar with the link said it was in trouble. Implementation was ill-planned and hurried because the Thaksin government wanted the 28-kilometre high-speed link completed soon after Suvarnabhumi Airport east of Bangkok opened.
The link is meant to dash passengers from the centre of the capital to the airport in 15 minutes. Already Shanghai has its maglev (magnetic levitation) train to Pudong, Kuala Lumpur an airport express-rail service and trains zoom travellers from Incheon International and Gimpo airports to Seoul Station.
Bangkok's link was originally due for completion on August 7 this year. About three months of trials would be required after that.
"Overall, planners were too optimistic. For instance, they assumed it would take just 90 days to access all construction sites along the route. "In reality it took as long as 700 days because of opposition by some landowners," Nakorn said.
Last week it was calculated the rail link is almost 50 per cent behind schedule.
The project's construction work is just under 54-per-cent complete. By now it should have been 98-per-cent done.
Work on electrical and mechanical systems is more than 70-per-cent finished but should be 96 per cent along the way.
Nakorn remained unsure about how much longer it would take before completion and what that would cost.
A recent compromise between the SRT and the project's builders secured an additional 463 days for construction.
Originally, the construction was to be paid for by contractors, who would be reimbursed by the state, with interest.
The latest number-crunching session calculated the project has cost Bt34.5 billion, including interest. That is over budget by one third.
Now that the SRT has to cough up after 990 days from the start of building, the bill is an initial Bt22.6 billion, including Bt1.4 billion in interest.
"If that's not paid, financial institutions could stop their support and construction will stop," Nakorn said.
One option is to stretch the loan term to require payment when building is finished. That will incur the SRT an additional Bt1.4 billion in interest charges.
Another is to refinance.
SRT board chairman Siva Saengmanee said a decision was due later this year.
Apart from the financial problems, the link will immediately start making operational losses.
"The [revenue] estimates are too optimistic. They expected one of every four Suvarnabhumi passengers would use the link service. How could this be possible when Hong Kong's system attracts just 8.5 per cent - and that connects the whole city," Nakorn asked.
Estimates ran at 87,700 passengers a day in the first year, rising to 402,700 passengers a day within 30 years. Expected daily income is Bt3.1 million in the first year and Bt19.7 million in the 30th. Break-even comes after 20 years.
"This is a costly lesson for Thailand as far as mega projects are concerned, especially the new mass-transit projects that start soon," said Suwat Wanisubut of the National Economic and Social Development Board.
"The problem stems from a lack of efficient planning and implementation mechanisms. Moreover, the processes we used are sensitive to political instability," he said.
To prevent a repeat of these mistakes, Suwat said better project transparency was required as was a "a paradigm shift for conducting mass-transit projects".
"In the past, planning focused on the supply side. Now, we need to focus on demand instead. That means we have to plan mass transit as a tool to help implement city planning," he said.
"We need to answer first what the future picture looks like and plan mass-transit projects to meet that reality. People need incentives to use mass transport and get out of their cars," Suwat said.
Thai National Health Foundation policy researcher Dr Paibul Suriyawongpaisal concurred: people need to be encouraged to use mass transport and they should have a say in how it is built.
"Mass transit is good for public health. Currently, problems related to the lack of mass transit - like bad air and unhealthy city people who don't exercise and eat poor food - are the cause of accumulated chronic diseases like obesity, diabetes, cancers and respiratory problems.
"These account for 60 per cent to 70 per cent of all deaths. More mass transit will decrease those numbers," Paibul said.
"Transparency and public participation in projects will reduce corruption and improper political interference in mega projects," he added.
Suwat said self-reliance in technology and human resources was needed if Thailand was to reduce construction costs and operating and maintenance expenses.
"Otherwise, we will have to import both technology and experts, as we do today," he said.
Nakorn of the SRT supported Suwat. He said the current Skytrain and underground services were dependent on foreign technology and experts.
"Half of the cost of these projects is for foreign companies' technology and experts. People who control their operation and maintenance are foreigners," Nakorn said.
Suwat suggested looking to Korea. "It has planned its mass-transit projects well. Instead of importing technology and experts, it funded its own human resources with the cooperation of the state, universities and industry.
"After the first project was completed it had a great skill asset able to develop a second, and so on. Now Korea is looking to export this talent and technology.
"We are still dependent on foreigners even after we have built two mass-transit projects," Nakorn said.
Kamol Sukin
The Nation
Airport train running late
The Nation, June 10, 2007
The multibillion-baht Airport Rail Link from Makkasan to Suvarnabhumi is way behind schedule and over budget.
Last week experts met to thrash out how it can be saved before banks pull their support.
The link was started during the tenure of the deposed Thaksin Shinawatra government and there are allegations that poor planning and corruption sent costs spiralling from an original estimate of Bt25.9 billion to over Bt30 billion.
State Railway of Thailand (SRT) deputy governor Nakorn Chanthasorn said the situation was critical.
"Originally, we were supposed to pay for the link after it was completed. Politicians intervened and the previous Cabinet resolved that we would pay up 990 days after work commenced," he said.
"This means the SRT needs to find as much as Bt22.6 billion within the next few months. We are asking for a Cabinet solution."
Those familiar with the link said it was in trouble. Implementation was ill-planned and hurried because the Thaksin government wanted the 28-kilometre high-speed link completed soon after Suvarnabhumi Airport east of Bangkok opened.
The link is meant to dash passengers from the centre of the capital to the airport in 15 minutes. Already Shanghai has its maglev (magnetic levitation) train to Pudong, Kuala Lumpur an airport express-rail service and trains zoom travellers from Incheon International and Gimpo airports to Seoul Station.
Bangkok's link was originally due for completion on August 7 this year. About three months of trials would be required after that.
"Overall, planners were too optimistic. For instance, they assumed it would take just 90 days to access all construction sites along the route. "In reality it took as long as 700 days because of opposition by some landowners," Nakorn said.
Last week it was calculated the rail link is almost 50 per cent behind schedule.
The project's construction work is just under 54-per-cent complete. By now it should have been 98-per-cent done.
Work on electrical and mechanical systems is more than 70-per-cent finished but should be 96 per cent along the way.
Nakorn remained unsure about how much longer it would take before completion and what that would cost.
A recent compromise between the SRT and the project's builders secured an additional 463 days for construction.
Originally, the construction was to be paid for by contractors, who would be reimbursed by the state, with interest.
The latest number-crunching session calculated the project has cost Bt34.5 billion, including interest. That is over budget by one third.
Now that the SRT has to cough up after 990 days from the start of building, the bill is an initial Bt22.6 billion, including Bt1.4 billion in interest.
"If that's not paid, financial institutions could stop their support and construction will stop," Nakorn said.
One option is to stretch the loan term to require payment when building is finished. That will incur the SRT an additional Bt1.4 billion in interest charges.
Another is to refinance.
SRT board chairman Siva Saengmanee said a decision was due later this year.
Apart from the financial problems, the link will immediately start making operational losses.
"The [revenue] estimates are too optimistic. They expected one of every four Suvarnabhumi passengers would use the link service. How could this be possible when Hong Kong's system attracts just 8.5 per cent - and that connects the whole city," Nakorn asked.
Estimates ran at 87,700 passengers a day in the first year, rising to 402,700 passengers a day within 30 years. Expected daily income is Bt3.1 million in the first year and Bt19.7 million in the 30th. Break-even comes after 20 years.
"This is a costly lesson for Thailand as far as mega projects are concerned, especially the new mass-transit projects that start soon," said Suwat Wanisubut of the National Economic and Social Development Board.
"The problem stems from a lack of efficient planning and implementation mechanisms. Moreover, the processes we used are sensitive to political instability," he said.
To prevent a repeat of these mistakes, Suwat said better project transparency was required as was a "a paradigm shift for conducting mass-transit projects".
"In the past, planning focused on the supply side. Now, we need to focus on demand instead. That means we have to plan mass transit as a tool to help implement city planning," he said.
"We need to answer first what the future picture looks like and plan mass-transit projects to meet that reality. People need incentives to use mass transport and get out of their cars," Suwat said.
Thai National Health Foundation policy researcher Dr Paibul Suriyawongpaisal concurred: people need to be encouraged to use mass transport and they should have a say in how it is built.
"Mass transit is good for public health. Currently, problems related to the lack of mass transit - like bad air and unhealthy city people who don't exercise and eat poor food - are the cause of accumulated chronic diseases like obesity, diabetes, cancers and respiratory problems.
"These account for 60 per cent to 70 per cent of all deaths. More mass transit will decrease those numbers," Paibul said.
"Transparency and public participation in projects will reduce corruption and improper political interference in mega projects," he added.
Suwat said self-reliance in technology and human resources was needed if Thailand was to reduce construction costs and operating and maintenance expenses.
"Otherwise, we will have to import both technology and experts, as we do today," he said.
Nakorn of the SRT supported Suwat. He said the current Skytrain and underground services were dependent on foreign technology and experts.
"Half of the cost of these projects is for foreign companies' technology and experts. People who control their operation and maintenance are foreigners," Nakorn said.
Suwat suggested looking to Korea. "It has planned its mass-transit projects well. Instead of importing technology and experts, it funded its own human resources with the cooperation of the state, universities and industry.
"After the first project was completed it had a great skill asset able to develop a second, and so on. Now Korea is looking to export this talent and technology.
"We are still dependent on foreigners even after we have built two mass-transit projects," Nakorn said.
Kamol Sukin
The Nation
posted by Bob Boonhod at 6/10/2007 03:00:00 AM
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