Southeast Asian railways on track for massive expansion
Unlike other parts of the world, the railway network in Southeast Asia will expand rapidly over the next decade, given aggressive investment plans across the region. Altogether, hundreds of billions of dollars are likely to be spent building new high-speed railways and upgrading existing networks. Much of the money will flow to Chinese firms, but the projects should also provide a bonanza for Western manufacturers and service providers, says Adrian Ashurst, CEO of Worldbox Business Intelligence.
Vietnam’s fast track to economic growth
Vietnam has some of the most ambitious aims, including plans to build a new US$67 billion north–south high-speed railway linking Hanoi and Ho Chi Minh City. The government has decided to finance the railway from its national budget, rather than seeking foreign financing. Trains on this route will reach speeds of up to 350 kilometres per hour, cutting travel times significantly to around 5.5 hours, from 32 hours currently. That will mark a significant upgrade on the existing single-track line, built during the French colonial era.
Construction will begin in 2028 and should be completed by 2035. The project is part of Vietnam’s vision to modernise transport and promote economic connectivity across its 20 provinces and cities. Hanoi also wants to expand the high-speed railway network to China to boost economic ties. The two countries are already connected via a system of highways and two railway lines that are old and need upgrading on the Vietnam side.
One of the planned high-speed lines would run from the port cities of Haiphong and Quang Ninh through Hanoi to Lao Cai province, which borders China’s Yunnan province. The other would run from Hanoi to Lang Son province, which borders China’s Guangxi region, passing through an area densely populated with global manufacturing facilities, including some owned by Chinese investors. Trade between Vietnam and China in the first quarter of this year rose by 22% from a year earlier, to US$43.6 billion, according to Vietnamese government data.
Thailand plans express link to China
Thailand, too, is hoping to turbocharge trade with China via a high-speed rail link. Bangkok is planning to open a high-speed rail project connecting the Laos–China High Speed Railway with Bangkok, and eventually extend that route southwards to the Malaysian border. Estimated to cost between US$5 billion and US$9.9 billion, the first phase will connect Bangkok to Nakhon Ratchasima, the gateway to northeast Thailand. The second phase of the project will see the railway connect to Nong Khai, a border town in northeast Thailand, across the border from Vientiane, the capital of Laos. The railway will reduce travel time between Bangkok and Nakhon Ratchasima to 90 minutes, from the current 4.5 hours.
Another high-speed rail project in the kingdom involves linking Suvarnabhumi and Don Mueang airports in Bangkok, and U-Tapao airport with the resort of Pattaya. The rail link is an integral part of Thailand’s ambitious Eastern Economic Corridor (EEC) initiative, which aims to lead the country up the industrial and business services value chain and create a more innovative and competitive economy.
Malaysia keen to attract foreign investors
Malaysia also has ambitious plans to upgrade its railway infrastructure. It is planning a US$10 billion, 665-kilometre East Coast Rail Link (ECRL) that will connect the states of Kelantan, Terengganu and Pahang along the east coast with the Klang Valley on the west coast of Peninsular Malaysia. Malaysia also wants to connect the ECRL with Thailand and build a new high-speed railway from Kuala Lumpur to Singapore, and eventually another high-speed link to the Thai border.
Construction on the ECRL project began with ground-breaking in Kuantan, Malaysia, in August 2017, but the work was suspended in 2018 for financial reasons. Construction resumed in July 2019, with completion scheduled for December 2026 and operations expected to commence in January 2027. It is the biggest economic and trade project between China and Malaysia, with the state-owned China Communications Construction Company, the main contractor, a 50:50 partner.
According to railway-technology.com, “the project will serve as a crucial national infrastructure and connect urban and rural areas while enhancing public transportation throughout its electrified railway system. It aims to enhance transportation connectivity, facilitate economic development, and promote trade and tourism along the East Coast region.” 1
The Malaysia–Singapore high-speed rail project was first announced in 2013, but was postponed in 2018 by former prime minister Mahathir Mohamad. The project, which aimed to cut travel time between the two cities to 90 minutes from more than 4 hours by road, was terminated in 2021 due to disagreements and funding constraints on the Malaysian side.
However, it could now be revived by the current prime minister, Anwar Ibrahim, if costs can be cut significantly and the Malaysian taxpayer does not have to foot the bill. The Singaporean prime minister, Lawrence Wong, has said he is willing to reopen negotiations. Ibrahim has said he would like the line to pass through the giant, Chinese-built, US$100 billion Forest City residential project. Many of the project’s apartments remain empty and the line could help to revive interest. Malaysia is keen to attract Chinese investment into the project.
Indonesia’s expanding network
China has already helped Indonesia open its first high-speed railway link, financing and developing a high-speed line from the capital, Jakarta, to the city of Bandung, 142 kilometres to the east. This has reduced travelling time from 2–3 hours by conventional railway to 40 minutes. Indonesia also wants to spend over US$50 billion expanding the rail network across the archipelago to over 10,000 kilometres by 2030, an increase from just 4814 kilometres recorded in 2014. The hope is that the expanded network will boost economic activity and reduce logistics costs, which are the highest in the region.
Overall, Southeast Asia is likely to prove a boon to a host of companies that provide railway products and services. From construction to the provision of the advanced trains and software needed to upgrade rail networks, Southeast Asia’s huge investment in railways in the coming decade will provide massive opportunities for businesses around the world.
1 – https://www.railway-technology.com/projects/east-coast-rail-link-ecrl-project/
Source: Worldbox Press Release
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