Study on the Development of High Speed Commuter Railway and Station Area Development in Thailand (Between Eastern Line Bangkok and Pattaya)

Transcription

1 Study on Economic Partnership Projects In Developing Countries in FY 2016 Study on the Development of High Speed Commuter Railway and Station Area Development in Thailand (Between Eastern Line Bangkok and Pattaya) February 2017 Prepared for: Ministry of Economy, Trade and Industry Prepared by: Fujita Corporation Itochu Corporation Daiwa House Industry Co., Ltd. Oriental Consultants Global Co., Ltd.

2 Preface This report summarizes the results of the Study on Economic Partnership Projects In Developing Countries in FY 2016 commissioned by Ministry of Economy, Trade and Industry (METI) which was prepared by the consortium of Fujita Corporation, Itochu Corporation, Daiwa House Industry Co., Ltd and Oriental Consultants Global Co., Ltd. The report entitled Study on the Development of High Speed Commuter Railway and Station Area Development in Thailand (Between Eastern Line Bangkok and Pattaya) aims to illustrate that the development of a commuter railway between Bangkok and Pattaya, the urban center of the eastern coastal area, will bring fast and reliable transportation while stimulating new development between those cities. The purpose of the study is also to investigate the possibility of implementing the project as an ODA loan project. We hope that this report will be of a support to realize the project and to be a reference to relevant stakeholders in Japan. February, 2017 Yasuo IZUMI Project Manger Oriental Consultants Global Co., Ltd. 1

3 Abbreviation Abbreviation AC AEC ARL ATO ATP ATS BOB BOI CASS CAT CBTC CCTV COM DOH DRS DTS E&M EEC EGAT EIA EIRR EPC ETCS FIDS FIRR F/S GDP HS IC IEE IGBT IMF JICA JPY LZB NESDB NPV OA/IT OCC OCL ODA OPDC OTP PA PC PDMO PEA PHPDT PIDS PIS PPP PSD SCADA SEPO Formal Nomenclature Alternating Current Asian Engineering Consultants Airport Rail Link Automatic Train Operation Automatic Train Protection Automatic Train Supervision Board of Budget Board of Investment Controlled Access Security System City Air Terminal Communication Based Train Control Closed-Circuit Television Communication Department of Highways Digital Radio System Data Transmission System Electrical and Mechanical Eastern Economic Corridor Electricity Generating Authority of Thailand Environmental Impact Assessment Economic Internal Rate of Return Engineering, Procurement, Construction European Train Communication System Flight Information Display System Financial Internal Rate of Return Feasibility Study Gross Domestic Product High Speed Integrated Circuit Initial Environmental Examination Insulated Gate Bipolar Transistor International Monetary Fund Japan International Cooperation Agency Japanese Yen Linienzugbeeinflussung National Economic and Social Development Board Net Present Value Office Automation and Information Technology Operation Control Center Overhead Catenary Line Official Development Assistance Office of Public Sector Development Commission Office of Traffic and Transport Policy Public Address Pre-stressed Concrete Public Debt Management Office Provincial Electricity Authority Peak Hour Peak Direction Traffic Passenger Information Display System Passenger Information System Public-private Partnership Platform Screen Door Supervisory Control and Data Acquisition State Enterprise Policy Office 2

4 SMS SOE SPV SRT SRTET TDL TEL THB TOD TTC UPS USD VOC VVVF Station Management System State-Owned Enterprise Special Purpose Vehicle State Railway of Thailand State Railway of Thailand Electric Train Transport, Distribution, Logistic Telephone Thai Baht Transit Oriented Development Travel Time Cost Uninterrupted Power Supply United State Doller Vehicle Operating Cost Variable Voltage Variable Frequency 3

5 Contents Chapter 1 Country and Sector Review Economic and Financial Conditions of the Country Economic Conditions Financial Conditions National Economic Development Excessive Centralization and Regional Gap Issues of Bangkok Metropolis Transport Sector Review Urban Transport Intercity Transport Double Tracking Projects High Speed Railway Projects Regional Conditions Eastern Economic Corridor (EEC) Activities of Japanese Companies Super-cluster Intercity Transport Chapter 2 Study Methodology Objective Scope of Work Study Method and Organization Study Schedule Meetings with Stakeholders Chapter 3 Project Description and Technical Consideration Background and Need for the Project Project Background National Development Plan Regional Development Plan Need for the Project Project Policy and Decisions Policy Approval Process

6 3.2.3 Decisions Project Description HS Commuter Railway Station Area Development Analysis and Prospects of the Real Estate Market Market Analysis and Demand Forecasting Station Square Development Plan Overview of TOD Facility Plan Approximate calculation Remaining Issues Route Selection Interoperation with ARL Development Phases Timing to Introduce HSR Service Lease of Land for Development Utility Relocation Chapter 4 Consideration of Environment and Social Aspect Analysis of current situation Potential Environmental Improvement Potential Environmental and Social Impacts Related Regulations and Approval Process for Environmental and Social Considerations Legal Basis of EIA Project requires EIA Process of EIA Components of an EIA Report Chapter 5 Economic and Financial Feasibility Project Cost Estimate Project Cost Operation and Maintenance Cost Replacement and Reinvestment Revenue Estimate Fare Revenue Non-Fare Revenue

7 5.3 Preliminary Economic Analysis Assumptions Cost Benefit Result Preliminary Financial Analysis Basic Condition Result of Analysis and Cash Flow Chapter 6 Implementation Schedule Project Formulation Schedule Construction Schedule Critical Path Chapter 7 Implementation Capacity Executing Agency Project Implementation Structure The Ministry The Regulator The Executing Agency The Operator Project Risk Sharing Capacity Assessment of the Executing Agency Chapter 8 Technical Advantages of Japanese Companies Construction and procurement making use of ODA loans International competitiveness and order acceptability Equipment procured from Japan Promotion of orders received by Japanese companies Project participation through private investment Participation style of Japanese companies Advantages of Japanese companies Promotion of order-receiving of Japanese companies Chapter 9 Intention of Thai Government Examination Progress of HSR Project

8 9.2 Examination Progress of HS Commuter Line Project Examination Progress of Project Scheme Preconditions Project Scheme Alternatives Project Scheme Diagram Selected Project Scheme Chapter 10 Prospects on Financial Procurement Construction and Procurement by ODA loan Policy of the Thailand Government and other governmental offices Situation of relevant organizations Project participation through private investment Funding sources and financing plans Feasibility of Financing Cash flow analysis Chapter 11 Challenges and Action Plan Construction and procurement making use of ODA loans Initiatives toward requests for yen loan Measures necessary for requesting/providing ODA loans Challenges and action plans for ODA loan request Project participation by private investment Initiatives by Japanese companies Initiatives by relevant government agencies / implementing agencies in Thailand Legal and financial constraints Challenges and Action Plan of Project Participation Appendix 1: Project Proposal Appendix 2: Report on Demand Forecast

9 List of Figures Figure 1-1:GDP Growth Rate and Number of Tourist of Thailand Figure 1-2:Public Debt Ratio over GDP in Thailand Figure 1-3:Number of Japanese Companies in Eastern Seaboard Figure 1-4:Super Cluster Policy Figure 3-1:Approval Process of PPP Projects Figure 3-2:Selection Process of Business Operator Figure 3-3:Key Locations along the Corridor Figure 3-4:Route Map (HSR and HS Commuter) Figure 3-5:Ridership Forecast (Daily Average) Figure 3-6:Ridership Forecast (By Direction) Figure 3-7:Travel Time (HS Commuter From Makkasan, HSR From Suvarnabhumi) Figure 3-8: Track Layout (Above: ARL, Below: HS Commuter) Figure 3-9:Typical Cross Section (Main Line, Pier at Roadside) Figure 3-10:Typical Cross Section (Main Line, Track at Road Center) Figure 3-11:Platform Dimension Figure 3-12:Typical Cross Section (Station) Figure 3-13:Image of Typical Station Figure 3-14:Rolling Stock and Structural Gauge Figure 3-15:Trackwork for HSR Figure 3-16:OCC and SCADA Figure 3-17:Platform Screen Door Figure 3-18:Automatic Fare Collection Figure 3-19:Passenger Information System Figure 3-20:Supply of New Condominium Units Figure 3-21:Bangkok Office Market Figure 3-22:Changes in the number of BOI approved projects Figure 3-23:District wise ratio of number of BOI approved projects Figure 3-24:Changes in the number of approved FDI from Japan Figure 3-25:Image of station square Figure 3-26:TOD Development Concept for Each Station Figure 3-27:New Chachoengsao Land Use Plan Figure 3-28:New Chachoengsao Image Figure 3-29: New Chonburi Land Use Plan Figure 3-30:New Chonburi Image Figure 3-31: New Si Racha Land Use Plan Figure 3-32: New Si Racha Image Figure 4-1:Environment Protection Zone and Project Location in Banglamung and Sattahip District Figure 4-2:Flood Prone Area Figure 4-3:Land Slide Prone Area Map Figure 4-4:Current Land Use in Eastern Thailand (2010) Figure 4-5:Planned Railway Alignment Figure 4-6:Typical Cross Section of Station Figure 4-7:Cross Section of Planned Railway Figure 4-8:Situation and location of the high voltage cables across the existing highway Figure 4-9:Elevated bridges for vehicles and pedestrian bridges Figure 4-10:Wetland area where Choburi Station is planned Figure 4-11:Approval process for the projects by the government and public company Figure 5-1:Elasticity of Ridership by Fare Level

10 Figure 5-2:Elasticity of Fare Revenue by Fare Level Figure 5-3:Benefit Component Figure 5-4:Cost-Benefit Transition Figure 5-5:Investment Scheme Figure 6-1:Construction Schedule Figure 6-2:Construction Schedule (as per Standard Japanese ODA Procedure) Figure 7-1:Organization Chart of SRT Figure 8-1: Achievement of Japanese train manufacturers - maximum speed over 160 km / h Figure 8-2: Order-placing style in general railway construction in overseas Figure 8-3: Structure of this Project Figure 9-1:Transport Infrastructure Investment Action Plan (2016 and 2017) Figure 9-2:Project Scheme Diagram List of Tables Table 1-1:Top 10 Business Category of Japanese Companies in Thailand Table 2-1:Scope of Work Table 2-2:Study Organization Table 2-3:Meetings with Stakeholders Table 3-1:Sections outside of National Highway No Table 3-2:Station Locations Table 3-3:Proposed Fare Table Table 3-4:Key Assumptions Traffic Demand Forecast Table 3-5:Features of the Selected Railway Systems Table 3-6:Salient Features of HS Commuter System Table 3-7:Travel Time Table 3-8: Transport Plan Table 3-9:Depot and Maintenance Plan Table 3-10:Specifications of Rolling Stock Table 3-11:Station Equipment Table 3-12:Outline of EEC Plan Table 3-13:Outline of Tama New Town Table 3-14:Outline of Tsukuba Science City Table 3-15:Outline of Kashiwanoha Campus Table 3-16:Outline of TOD development Table 3-17:Outline of New Chachoengsao Project Table 3-18:New Chachoengsao Project Total Cost Table 3-19:New Chachoengsao Sales Balance Table 3-20:New Chachoengsao Gain on Sale Table 3-21:Outline of New Chonburi Project Table 3-22:New Chonburi Project Total Cost Table 3-23:New Chonburi Sales Balance Table 3-24:New Chonburi Project Gain on Sales Table 3-25:Outline of New Si Racha Project Table 3-26:New Si Racha Project Total Cost Table 3-27:New Si Racha Sales Balance Table 3-28:New Si Racha Gain on Sales Table 3-29:Evaluation of Route Alternatives Table 4-1:Eastern Thailand Monthly Average Temperature Table 4-2:Eastern Thailand Monthly Average Precipitation

11 Table 4-3: Frequency of tropical cyclone incidents over the past 65 years, Table 4-4: Total population and agricultural population Table 4-5:Overview of the Project Table 4-6:Environmental Impact Matrix Table 4-7:Environmental Checklist Table 4-8:Criteria of Projects for EIA Study Table 5-1:Total Investment Cost Table 5-2:Land Acquisition Cost Table 5-3:Comparison of Project Cost Table 5-4:O&M Cost Table 5-5:Fare Simulation Table 5-6:Non-Fare Revenue Table 5-7:Economic Analysis (Base Case) Table 5-8:Sensitivity Tests (Economic) Table 5-9:Business Scope Table 5-10:Cash Flow Table Table 7-1:Financial Statement of SRT Table 8-1: Trains supplied by Japanese train manufacturers (maximum speed 160 km/h or more, excluding bullet trains) Table 8-2: Estimation of potential order amount received by Japanese companies Table 9-1:Project Scheme Alternatives Table 11-1: Authorities Relevant to ODA Loan Requests and Their Roles

12 Executive Summary 1. Background and Need for the Project (1) Project Background The Government of Thailand is in the process of formulating the High Speed Rail (HSR) Eastern Line (Bangkok Rayong). State Railways of Thailand (SRT) commissioned the feasibility study, detailed design and bid document preparation with local funds. Based on the result, the Government has been preparing for implementation of the HSR Eastern Line. Even though the project was proposed by the Government to be financed under a Public-Private Partnership (PPP) scheme, there is no commitment on investment so far by the private investors particularly due to large construction cost of the HSR system. Despite the plan of the Government to start the selection process of a private business operator soon, it is hard for any private firms to respond to their bid call. Therefore, it is necessary to propose a more feasible alternative in collaboration with the Thai private sector and promptly start implementation. (2) Need for the Project The Transport Infrastructure Investment Action Plan 2017 announced by the Ministry of Transport lists the HSR Eastern Line (Bangkok Rayong) as a continuous program since In the meeting of the Committee for State Enterprise Policy (Superboard), Prime Minister Prayut showed his strong intention to select the HSR Eastern Line as a fast track project together with Red Line, ARL, and HSR Bangkok Hua Hin. Details are being discussed among the PPP council and the Ministry of Transport. This study aims to propose a more feasible railway project from the standpoint of potential private investors, covering the scope of the following. 1. Reduction of project cost by alternative railway system, i.e. high speed commuter rail 2. Improvement of profitability through property development and far more increase of non-fare revenue by joint efforts with local private investors who own land along the corridor and around the stations 2. Project Policy and Decisions The team carried out the study with the following approach. Study Approach In collaboration with Thai private firms, develop project designs to satisfy the needs of potential investors Propose infrastructure project along with the development plans in the Eastern Seaboard Make fare comparison of project effectiveness to HSR Eastern Line Bangkok Rayong Project. The team set out the following policy of the Project. Policy of the Project Minimize requirement of land acquisition by use of the right-of-way of National Highway No.7 Provide HS commuter rail service in the beginning with future provision of HSR service on the same track Design appropriate service levels as a commuter line with a headway of less than 15 minutes Promote use of service by setting the fare level comparable to the existing bus service Prepare development plans appropriate for PPP by reducing project cost Enhance viability of the project with new town development on land along the corridor Ensure good connectivity by providing feeder service between new town development and existing city center Enable passengers easy access to Bangkok by interoperation with the existing ARL Link Suvarnabhumi and Uttapao Airport at about 40 minutes in accordance with the Government policy 11

13 3. Project Description (1) HS Commuter Railway Plan 1) Alignment and Station Locations, Route, Location of Station, Track Layout This study proposes the route corridor for a HS commuter rail line along the national highway No.7 between Suvarnabhumi Airport and Pattaya connecting to the existing Airport Rail Link (ARL). The proposed alignment envisages all elevated structure for the purpose to prevent trespass of local residents and due to the existence of many flyovers crossing the corridors. This study focused on the route alignment of the section between Suvarnabhumi Airport and Pattaya, while Pattaya Rayong section is treated as the second phase of development (out of the scope of this study) in general accordance with the National Social and Economic Development Plan of the Government. Stations are located at open lands suitable for new town development or ideal sites for interchange with other transport modes. By providing stations at the lands owned by the local private companies, requirement of land acquisition was kept to a minimum. Source: Study Team Figure 1:Track Layout (Above: ARL, Below: HS Commuter) 2) Demand Forecast The estimated average daily ridership accounts for 26,000 passengers in 2022 and 84,000 passengers in 2042, which are about 2 times of the ridership of the HSR Eastern Line. Source:Study Team Figure 2:Ridership Forecast (Daily Average) 12

14 3) Railway System The Study proposed introduction of HS commuter system compatible with the existing ARL. Also, addition of mini Shinkansen system running of the same track upon extension to the Uttapao Airport and Rayong in future was proposed. Table 1:Features of the Selected Railway Systems HS Commuter System Max. Speed km/h Better flexibility in alignment designs Higher transport capacity Fully interoperable with ARL More choices of suppliers Source: Study Team Mini Shinkansen System Max. Speed km/h Faster travel speed Shorter journey time Interoperable with ARL Highly competitive for Japanese firms Also, the salient features of the selected HS commuter system are summarized in the following table. Table 2:Salient Features of HS Commuter Rail Systems Item Specification Operation Designed Max. Speed 160 km/h (future: 250 km/h) Running direction Left Construction Gauge 1,435mm Standard Rail 60kg/m Min. Curve Radius 2,500m (400m, absolute minimum) Min. Vertical Curve 10,000m Max. Cant 200mm Max. Gradient 2.0% (up to 1km), 1.8% (up to 2.5km), and 1.5% (beyond) Distance between track 4.0m centers Design Load 16t Effective Platform Length 146m Structure Station PC Box or Portal Frame Railway Line PC Box Rolling Stock Dimension LWH : 20,993mm x 2,950mm x 4,070mm Composition 3 car trainset (initial), 6 car trainset (future) Power Output 1,500kw Passenger Capacity Seating 150, Total 656 passengers per train Power Supply Electrification AC Traction AC 25,000V 50Hz Power Distribution Overhead Catenary Signaling ATP ATO ATS Communication DTS, Clock, TEL, CCTV, PA, DRS, SCADA, SMS, PIS, Trainborn COM, CASS, FIDS, OA/IT Source:Study Team 13

15 4) Transportation Plan Transportation plans of HS commuter rail are proposed as follows. Table 3:Transport Plan Daily Ridership 26,000 47,000 84,000 PHPDT 1,560 2,930 4,760 Designed Headway 12 min. (Peak), 15 min. (off peak) Train Composition 3 cars 3 cars 3 cars/6 cars Designed Hourly Transport Capacity 3,280 3,280 5,248 Fleet Requirement (Trainset) 15+2 sets 15+2 sets 20+2 sets Fleet Requirement (Car) 51 cars 51 cars 66 cars Passenger Kilometers Travelled 2,448,000 4,362,000 7,773,000 Annual Fare Revenue (THB Bil.) Source: Study Team 5) Rolling Stock In general accordance with the existing ARL, specifications of HS commuter trains are illustrated as follows. Except considerations of route conditions and characteristics, selective Japanese suppliers can produce such rolling stock. 6) Electrical and Mechanical (E&M) System As an E&M sub-system, the following are proposed: signaling system, communication system, power supply system, distribution system, mechanical equipment, platform screen doors, automatic fare collection, passenger information display system, operation control center, supervisory control and data acquisition, etc. The commuter rail line is planned to have a direct connection with the existing Airport Rail Link (ARL). Therefore, it is necessary to ensure consistency with the configuration, structure and contents of the subsystems of ARL. 7) Depot Location The proposed location of the depot is in the premise of New Chonburi Station, where the land belongs to the property of a local partner company. Therefore, no land acquisition is required for development of the depot. Five Ha of land is necessary for the depot. 8) Project Cost Project cost is divided into civil works including architecture, E&M system, railway system, construction cost including consultancy fee, contingency, land acquisition, taxes and duties. The following table shows the breakdown of project cost in local currency and Japanese yen. Table 4:Total Investment Cost Unit Quantity Unit Cost Amount Amount (THB Mil.) (THB Mil.) (JPY Mil.) 1. Civil Works 50, , General Requirement Set 1 1,731 1,731 5, Viaduct (Box) km , , Viaduct (Portal Frame) km ,324 5,788 18, At Grade Structure km Elevated Station Station 3 1,468 4,403 14, At Grade Station Station 1 1,045 1,045 3, Lifts & Escalators Station , Access Road Set 1 1,652 1,652 5, Depot Civil Works Set 1 3,151 3,151 10, Railway Systems 30, , Signaling System Km ,502 4, Platform Screens Station Maintenance Equipment Set 1 1,142 1,142 3, AFC System Station

16 2.5 Communication System Km ,637 11, Power Supply System Km ,772 22, Trackwork Km ,592 38, Other Systems Set 1 2, , Rolling Stock Car ,100 16, Contingency Set 3,272 10, Consultancy Fee Set 3,310 10, Taxes and Duties Set 6,077 19, Land Acquisition Set Total 93, ,805 Source:Study Team (2) Station Area Development Plan 1) The directionality and functions to be introduced in each station The directionality and functions to be introduced for each station are assumed as follows. Table 5:Outline of TOD development Station Directionality Function introduced New Chachoengsao Creation of a secondary city center of Bangkok following the launch of a new commuter railway by relocating some of the Bangkok s capital functions, aiming to mitigate overcrowding in Bangkok. Administrative functions Offices Arena in which international events can be held Hotels New Chonburi New Si Racha Source:Study Team Creation of a town in the entire Chonburi and Si Racha districts modeled on Tsukuba Express, Tsukuba Science Town as well as Kashiwanoha Campus which is one of the land development projects along railway lines. Commercial facilities R&D Centers Advanced factories Universities MICE Sport parks (Football stadium) Hotels Hospitals (Medical tourism) Commercial facilities Service apartments Housing Commercial facilities Service apartments Housing 15

17 2) New Chachoengsao Regarding New Chachoengsao Station which is located close to Bangkok and the Suvarnabhumi International Airport, some of the capital functions will be relocated from overcrowded Bangkok, and the plan ensures that the industry will become more sophisticated through close collaboration between industry, academia and government. Commercial and culture Park Greenery zone Housing Park Offices Government, financial offices New Chonburi Station Usage Housing Offices Commercial and culture Financial, Gov t offices Park Greenery zone Road Target area Area size (ha) Source: Study team Figure 3:New Chachoengsao Land Use Plan Source:Study Team Figure 4:New Chachoengsao Image 16

18 3) New Chonburi For New Chonburi, where a vast area is available for development, the area will be considered as the core of industry-academia-government collaboration to promote advance industrial cluster in areas along the new commuting railway lines. Functions will include a university, a convention center that caters for international conferences, hotels, shopping centers, hospitals and other facilities that are appropriate for the production cluster area with high added values, in addition to corporates' R&D centers and advanced production bases. University and hospital Housing Research Industry Station square Commercial and culture Greenery zone Park Usage Area (ha) % Housing Commercial Research Industry University&hospital Public facility Park Greenery zone Station square Road Station building Target area Source:Study Team Figure 5:New Chonburi Land Use Plan Source:Study Team Figure 6:New Chonburi Image 17

19 4) New Si Racha Urbanization of New Si Racha area has progressed, and development of service apartments and commercial facilities targeted at Japanese is also undergoing. In line with the plan to make the entire area along the railway lines into an internationally competitive industrial cluster, the plan will focus on providing a nice living environment for expatriates and business travelers including Japanese. Housing Commercial Pattaya Station Usage Area (ha) % Housing Commercial Park Greenery zone Road Existing facility Target area Source: Study Team Figure 7:New Si Racha Land Use Plan Source:Study Team Figure 8:New Si Racha Image 18

20 5) Project cost Total project cost of each station area developments are as follows. Table 6:Total Project Cost of Station Area Development Item Amount New Chachoengsao Station USD Mil. New Chonburi Station USD Mil. New Si Racha Station USD Mil. Total USD Mil. Source:Study Team (3) Environment and Social Aspect By implementing the project, noise and vibration during construction will be expected. However, positive impacts such as reduction of greenhouse gas emission and improvement of air quality will also be expected. As for land acquisition, the selected route will use the existing road right-of-way to minimize the land to be acquired. At presently envisioned, land acquisition may occur in 1.5% of the total length of the route, but the amount may be reduced during the detailed design stage. (4) Financial and Economic Analysis The base case showed an EIRR of 12.67% which is above the discount rate of 12% adopted by the National Economic and Social Development Board (NESDB) as a project appraisal criteria. The premise of the business scheme used in the financial analysis assumes the Thai government will directly finance the railway system and civil construction expenses other than railway cars through an ODA loan, while the consultant fee, interest cost and finance cost related to railway cars will be financed by the private investment. Based on the cash flow analysis, FIRR for the SPV was calculated as 18%. This shows that this project is viable for private investment. 4. Implementation Schedule The construction schedule is proposed as follows, taking into account the expectation of the Thai Government, minimum 4 years of construction works including test run, and the necessary period for assessment and approval of the project. Source:Study Team Figure 9:Implementation Schedule 19

21 In the meantime if the standard Japanese ODA procedure is strictly followed, the schedule is expected to be as follow. Source:Study Team Figure 10:Implementation Schedule (Following normal ODA Loan procedures) 5. Feasibility for Obtaining Request for ODA Loan and its Application The Thai Kingdom Treasury Department tries to keep the ratio of public debt outstanding to GDP below 60%, in principle. In fact, it is less than 50% now and the government is hesitant to increase new public debt beyond the current amount. For the promotion of infrastructure development plans, the Thai government intends to procure funds through state-owned enterprises borrowing, publicprivate partnership PPP, or infrastructure funds from the viewpoint of suppressing the increase of public debt. Meanwhile, although the PPP method was proposed on the Thai government's intention for the fund and investment plan of the high-speed railway Eastern Line project feasibility study conducted prior to this study by the Thailand National Railway, the huge construction cost of the high-speed railway project has become an obstacle. For the reason, Thai private enterprises cannot rush into a decision about investment. Further, although the Thai government plans to enter the contractor selection process early, it is unlikely that there are business entities that are interested in making an entry. Therefore, in order to enhance the feasibility of the railway project, we have proposed that cost of the civil engineering work and railway system are procured directly by the Thai government through ODA loans, while procurement of trains and maintenance and operation of the railway will be conducted by private investment. We also have proposed that projects to develop near the stations will be implemented and the profit gained from the real estate development that greatly enjoys benefit from the launch of railway business will be returned to the railway business. In light of this, it is necessary for Thai and Japan's private enterprises that have interest in the project to jointly propose an alternative railway project with high project feasibility, and promptly connect to the launch of the project. 6. Feasibility concerning Private Companies Participation in this Project This project is originated from the fact that local companies have requested cooperation of Japanese companies prior to participating in the Thai government's high-speed railway PPP project. In response to this, Japanese companies have formulated a project plan while taking into account their 20

22 own experiences and advantages. Moving forward, it is important for local affiliates to determine the validity of the proposal of this project, to understand the merits of joint implementation with Japanese companies, and to sign an agreement for project implementation. This project is aimed at participation of many companies, and those companies have various speculations. The core of this project is to ensure that SPVs that develop areas near the stations allocate part of the development benefit to the railroad project SPV. In other words, the SPVs that develop areas near the stations also bear a certain risk, so that risk leveling can be achieved. For this reason, it is necessary that investors in the railway business SPV and investors in SPVs that develop areas near the stations to share the expected profits and risks and clarify the details of a contribution system. This is indispensable for Japanese companies to make a decision on participation. 7. Technical Advantages of Japanese Companies (1) Civil Work Civil engineering works as a whole include construction of elevated highways which can be dealt with by the technology already widely used in urban railway construction in Bangkok. Therefore, it isn't that Japanese companies have special advantageous conditions. However, Japanese companies have track records of undertaking elevated highway construction in Bangkok and have a certain level of competitiveness against normal biddings. (2) Railway track and System The proposed railway route is assumed to be operated at the speed of 160 km/h, and the maximum speed is as same as that of the Airport Link. Therefore, if the same system as that of the Airport Link is used, the system can be operated without boundary in both routes. When a Japanese company undertakes the project, it is necessary to change the specification to meet the current specification. However, Japanese companies have won orders for urban railway trains in recent years. For the reason, they have a certain level of competitiveness. (3) Systems not dependent on the specifications of the route (platform screen doors, station equipment, lifts, etc.) Station equipment items including platform Screen Doors (PSD), fare collecting systems, passenger information systems, as well as station lifts, escalators, etc. will be required regardless of specifications of the route. Each of the equipment items is developed by a Japanese company, and has been delivered outside of Japan. There are also areas where Japanese manufacturers' competitiveness is increased if a specific performance is requested. Combination of bidding companies is more important than the individual specifications when Japanese companies consider accepting an order. 8. Schedule for Project Implementation and Implementation Risk (1) Detail Schedule for Project Implementation Moving forward, it is required to receive a request for an additional study from the Thai Government without delay based on the project launch schedule in line with the intention of the Thai Government: The project is to be approved by the Cabinet or the PPP Committee, and the railway route to be finalized in the beginning of 2017, bidding to be conducted as a PPP project in the third quarter of In the case of an ordinary ODA loan procurement, a JICA PPP study is to be completed in 2017, then a JICA ODA loan preliminary study to be conducted in It is necessary to conduct a detailed study utilizing Japanese assistance scheme including JICA PPP Study to review the route plan, transportation hub plan and rail yard plan in the next feasibility study. At the same time, an assistance project for detailed design shall also be implemented in corporation with a local company so that the project can be implemented after approval from the Cabinet. It is vital to prepare the necessary design documents, tender documents, etc. in a timely manner so that private developers of this project can be selected within the year

23 (2) Implementation Risk The following table shows possible risks which may impede the realization of the project. Item Railway line selection Connection to ARL Railway land lease Relocation of embedded utilities Financial procurement method Timeframe of ODA loan project Division of responsibility between railway development SPV and station area development SPV Source:Study Team Table 7:Implementation Risk Risk This proposed project is the alternative to existing HSR Eastern Line (Bangkok Rayong). Officials in Thailand expressed that this proposal is more realistic and more economical than the HSR Eastern Line. However, there is still a possibility that the original HSR plan will be selected. This proposal is based on the premise of connecting to ARL. Therefore the coordination with SRTET, who is the operator of ARL, will be required to obtain proper agreement. The proposed route corridor of the HS commuter line runs along the right-ofway of National Highway No.7. Since the Department of Highway of Ministry of Transportation (DOH) manages the National Highway No.7, it is necessary to coordinate with Ministry of Transport to obtain a land lease for the railway. It is confirmed that communication cables etc. are embedded along both sides of National Highway No.7. When constructing the railway viaduct along the roadway, relocation of embedded utilities will be required in coordination with the road department and utility companies. The Treasury Department of Thailand has set the maximum limit of outstanding public debt to 60% of GDP in principle which in fact remains less than 50% in reality. Therefore, the government may not support the public investment needed by use of a loan. Under this situation, the government may show reluctance towards the application of an ODA loan to the proposed project. In order to materialize this project as an ODA loan project, further consideration is required in the next F/S survey. If a JICA preparatory survey is to be carried out after the F/S survey, it may not fit within the timeline intended by the Thai Government. Significant revenue cannot be expected by participating in the SPV from the railway project alone. Therefore, it is necessary to clarify the roles and responsibilities of the overall project, including both railway SPV and station development SPV. 9. Project Implementation Area Map Project implementation area is as show below. 22

24 Source:Study Team Figure 11:Project Implementation Area 23

25 Chapter 1 Country and Sector Review 1.1 Economic and Financial Conditions of the Country This section describes the economic and financial conditions of Thailand Economic Conditions (1) General Thailand has a population of 62 million with a total area of 510,000 km2 (about 1.4 times of the total area in Japan). Bangkok houses over 8 million people in 2013, which is far larger than the second largest city of Nakhon Ratchasimain north eastern region and third largest city of Chiang Mai with population of about 200,000. Concentration of population to Bangkok area is remarkable. Thailand historically enjoyed strong economy through export of competitive industry and agricultures (such as electronics, agricultural products, automobiles and automotive parts, and food processing) supported by relatively well-developed infrastructures, free economy, and incentive policy. Also, relatively high standard of education and fertile land are the background for progressive industrialization. (2) Economic Trend and Policy Concerns Thailand's annual GDP dropped to 0.1% in 2011 due to repercussion from worst-flood in 50 year. After the flood, a steady recovery of Thai economy took place in 2012 (7.3%) with rehabilitation and rebuilding activities. In 2013, GDP growth reduced to 2.9% due to the termination of tax exemption for purchase of first car and completion of anti-flood related investments. In 2014, growth rate recorded as low as 0.9% mainly for the political disorder. In 2015, Thailand has maintained its economic growth of 2.7% with weaker private consumptions and weaker demand from the Chinese markets. Government expenditure and the tourism industry continues to lead the Thai economy, but the tractive force becomes less strong. Also, the there is a risk of potential damage to foreign investment associated to a terrorist attack that happened in the commercial district in Bangkok. Thailand's productive-age population has virtually stopped growing, and is likely to turn to decreasing trend in The ratio of dependent population index also is likely to become an increasing trend in The burden of productive-age population supporting the non-productiveage is increasing and will slow down Thailand s economic growth. Attempting to reduce regional gap with implementation of the national policy and regional development as per the National Investment Program is the key for sustainable development of Thailand. The Government seeks balanced-development across the nation by establishing regional cores at provincial cities and inviting industries. Source: Nissei Research Institute Figure 1-1:GDP Growth Rate and Number of Tourist of Thailand 24

26 1.1.2 Financial Conditions (1) General Thailand maintained financial surplus until 1996, while turned to large loss due to the Asian financial crisis. In response to the bursting of the information technology bubble in 2001, the past Prime Minister Thaksin expanded budgetary operation for financial recovery. Even though this led to large expansion of financial loss in 2002, Thailand returned to budget surplus since 2003 with increasing tax income through economic recovery. Right after Lehman failure, Thailand again expanded financial loss in 2009 by increase of public expenditure to respond to the economic slowdown. Also, loss became large in 2012 as the Government increase expenditures for recovery from damage by flooding in 2011 and Yingluck s populism policy. While the loss was large in 2014 from the coup by military forces, financial cash flow of the Government was largely improved in 2015 after economic recovery. The public debt ratio over GDP in Thailand was around 60% in 2000, but improved to the range of 40-50% these days. This means Thailand is financially sound and has sufficient financial capacity. (2) Infrastructure Investment Policy The government plans to spend around 2.4 trillion baht (or 20% of the national GDP) on infrastructure projects for 8 years from 2015 to Financing sources of this investment include budget of the Government (20%), borrowings of SOE (45%), PPP (20%), income of SOE (10%) and infrastructure funds (5%). Meanwhile, source of infrastructure investment has been the budget of the Government, while private investment by syndicates of banks. As the planned investment already exceeds the budget of the Government, part of the investment program is expected to be led by the private sector. (3) Public Debt The Ministry of Finance regulates the level of public debts to GDP at no more than 50%; lower than the 60% ceiling (around 45% as of end 2015). This restricts the Government to invest large infrastructure projects with primary sources of funds from public debt. Source: NESDB Figure 1-2:Public Debt Ratio over GDP in Thailand 1.2 National Economic Development This section describes the issues relating to the national economic development in Thailand Excessive Centralization and Regional Gap Thailand has been facing excessive centralization around Bangkok Metropolis with reginal difference between Bangkok and other provinces. Geographical factors, modernization and centralization of power, rapid economic growth lead the excessive centralization in Thailand. In fact, provinces generally focus on the primary industry and, at Northern inland regions in particular, industrial agglomerations are hardly observed. As the result of significant migration of labors to 25

27 Bangkok, traffic congestions and urban environment problems become serious these days. Also, the regional difference from time to time becomes the driver for political confusion. Therefore, the nation has a policy to realize the economic growth in the provincial regions to address differences and promote sustainable development through encouragement of local supporting industries Issues of Bangkok Metropolis Traffic congestion in Bangkok, associated with insufficiency in road capacity and increase of vehicles, has been the most significant problem in the transport sector. In fact, registered number of private cars in Bangkok accounts for 4-5 times of the road capacity. Average travel speed in the heart of Bangkok Metropolis remains to be as low as 12 kilometers per hour. As the National Economic Institute of Thailand estimated the loss from traffic congestion at THB 50 billion per annum, urgent actions are required to address the issue. Aside from the development of public transport infrastructure, decentralization and provincial growth are the keys to alleviate traffic congestion and urban environment issues. 1.3 Transport Sector Review This section provides the outlines of transport sector in Thailand Urban Transport The development of transportation infrastructure in Thailand has been proceeding with a focus on the Bangkok metropolitan area, which has a population of (2013 estimate) people. A mass transit system was planned and has been in operation since the 1990s to avoid chronical traffic congestion and improve environmental issues. As of now, the Green Line (BTS), the Blue Line and the Purple Line that are supported by Japanese ODA Loans, and the Airport Rail Link area in operation. Furthermore, Red Line construction is proceeding by Japanese ODA Loan Intercity Transport On the other hand, express bus is dominant for intercity transport after development of highways. The large number of bus terminals complicates connections from the center of the city, and it takes a great deal of time to transfer. As for railways, SRT has a total network of 4,000km, which is centered at Bangkok and 4 main corridors, including the Northern Line to Chiang Mai, the North Eastern Line to Nong Khai and Ubon Ratchatani, the Eastern Line to Aranyaprathet, and the Southern Line to Padang Besar and Sugaikolok. SRT also has problems with punctuality and efficiency due to decrepit trains and other issues Double Tracking Projects 93% of the total of 4,043km network of SRT remains to be single track sections. SRT is in the process of double tracking at 5 sections. After completion, operation will increase from 228 trains per day to 800 trains per day High Speed Railway Projects The Government considers that the introduction of HSR and development of the areas along the corridor will lead decentralization from Bangkok metropolis, improve connectivity between regions and thereby strengthen the economy of core cities in the provinces. In the 11 th National Social Economic Development Plan for 5 years ( ) states the necessity of HSR for improvement of connectivity with provincial cities. 1.4 Regional Conditions This section describes the regional conditions of the project location. 26

28 1.4.1 Eastern Economic Corridor (EEC) (1) Definition The Eastern Seaboard has been developed with the assistance of Japan since 1980s and is now Thailand s major industrial production base, occupying one-third of the national industrial production. The Government named the Eastern Economic Corridor (EEC), spanning three eastern provinces, namely Chon Buri, Rayong and Chachoengsao. (2) EEC Development Budget The Government ordered relevant authorities to speed up the development of EEC at the meetings of the Special Economic Zone Development Council. NESDB takes the role for coordination and management of the EEC projects. The Government announced that a total of 700 billion baht worth for 173 projects will be invested for EEC development over the next five years, out of which 150 billion baht worth of public investment will be allocated, while the Government expects, for the remaining part, the state enterprises and private sector investment under PPP scheme to be poured into the EEC. (3) Infrastructure Development Plan The cabinet already approved the Act for establishment of EEC with the aim to make the corridor as the Asia s No.1 techno park and high-technology industrial park. For this purpose, the Government decided infrastructure investment in these areas including airport, road, rail, and water transport. In particular, the Government intends to enhance connectivity with major ports in neighboring countries to make the area as the hub of water transport. Also, U-Tapao airport is expected to become the aviation hub in the future. (4) Incentives for Investment Investors in EEC will receive privileges including long-term land leases for 50 years and extensions of 49 years, visa-free grants for the import of skilled labor or executives, special tax perks and financial incentives Activities of Japanese Companies Eastern Sea-board is the center for export-oriented industries (particularly automotive) along with good access to Laem Chabang Port and tax incentives by MOI. Over 600 Japanese Companies in Eastern Sea-board. Progressive residential development around the area is leading urbanization. Si Racha, Chonburi & Pattaya attracts intensive investments. Source: Teikoku Databank Figure 1-3:Number of Japanese Companies in Eastern Seaboard 27

29 Table 1-1:Top 10 Business Category of Japanese Companies in Thailand Rank Top 10 Business Category of Japanese Companies in Thailand Category # of Firms Share (%) 1 Industrial electric equipment Wholesale Auto parts Manufacturer Investment Pressing of metal products Manufacturer Handling equipment for vehicle Manufacturer Metallic mold and parts Manufacturer Industrial plastic products Manufacturer Software development Metal cutting machine tools Manufacturer Iron and steel & processed products Wholesale Source: Teikoku Databank Super-cluster In January 2015, a new policy introduced by the Board of Investment (BOI) to attract foreign investment was introduced, and new special economic zones were set. The new policy promotes (i) abolition of previous zone incentives intended to attract investment in local areas based on a lowering of minimum wages in these regions; and (ii) revision of the industry sectors in which investment is promoted (129 fields) and acceleration of preferential/intensive investment. In the economic policy, which was announced by Deputy Prime Minister Somkid Jatusripitak in September 2015, nine super-clusters focusing on six industries were highlighted. Operators in these industries will be entitled to full corporate income tax exemption for eight years and a 50% reduction for five years thereafter. The target clusters will be given full corporate tax exemption for three to eight years and a 50% reduction for five years thereafter. As indicated in the following figure, the Eastern Seaboard plays a significant role in the super cluster policy as the industrial hub. Source: Bangkok Post Figure 1-4:Super Cluster Policy 28

30 1.4.4 Intercity Transport Express bus has been dominant for intercity transport following the development of highways. The large number of bus terminals complicates connections from the center of the city, and it takes a great deal of time to transfer. As for railways, SRT has a total network of 4,000km, which is centered at Bangkok and 4 main corridors, including the Northern Line to Chiang Mai, the North Eastern Line to Nong Khai and Ubon Ratchatani, the Eastern Line to Ayanphratet, and the Southern Line to Pandan Besar and Sugaikolok. SRT also has problems with punctuality and efficiency due to decrepit trains and other issues. 29

31 Chapter 2 Study Methodology 2.1 Objective The objective of the project is to develop the high speed commuter system between Bangkok and Pattaya as the center for the Eastern Seaboard. With an attempt to improve the travel between the regions and stimulate the needs for area development along the corridor, the project will contribute the sustainable development of the economy and further growth of maturing society of Thailand. Therefore, objective of this study is to assess the feasibility and appropriateness as Japanese ODA loan project in the aspects of need for the project, project features, project cost, implementation schedule, construction and procurement methods, implementation structure, operation and maintenance structure, social and environmental impacts, etc. 2.2 Scope of Work Scope of work of this study is summarized as follows. Item Need for the project Railway Plan Social and Environmental Assessment Economic and Financial Analysis of Railway Project Station Area Development Plan and its Viability Table 2-1:Scope of Work Study Content National development plan Regional development plan Traffic demand forecast Review of the transport development plans Natural conditions Route alternatives Project plans and designs Railway alignment, station locations, track layout, etc. Civil and architectural works Rolling stock and train operation systems Operations and maintenance plan Initial environmental evaluation Land acquisition and compensation Risk analysis of social and environmental impacts Quantitative effect for the steady supply of energy to Japan Outline construction plan Preliminary project cost Socio-economic analysis Financial analysis Financing plan Project implementation structure Project risks and sharing scheme Analysis and directions of real estate market Demand forecast Station plaza plan Outline TOD facility plan Preliminary cost estimate Financial analysis 2.3 Study Method and Organization This study was carried out by the following study organization. Table 2-2:Study Organization Position Name Firm Project Manager Yasuo Izumi OC Global Real Estate Development Yoshio Saeki Fujita Economic and Financial Analysis Koji Komai Itochu Social and Environmental Yoshihiko Sato OC Global 30

32 Assessment Station Area Development Plan 1 Tomoko Iibuchi Fujita Station Area Development Plan 2 Fumie Kobayashi Fujita Infrastructure Facility Plan Kazuya Tamura Fujita Railway Plan 1 Takayuki Hagiwara OC Global Railway Plan 2 Kazuhiro Tanaka OC Global (Kazrail) Demand Forecast Subcontractor Project Assessment Co. Civil Structure, Alignment, Cost Estimate Subcontractor Asian Engineering Consultant 2.4 Study Schedule This study was carried out with the following schedule 2.5 Meetings with Stakeholders The team held meetings with Thai and Japanese stakeholders as follows. Table 2-3:Meetings with Stakeholders Date Entity Agenda 2016/09/14 Amata Corp. Project designs and implementation plan 2016/09/14 Bangkok Bank Market sounding - Interest to participate in the project 2016/09/16 CP Project designs and implementation plan 2016/09/16 Krungsri Bank Market sounding - Interest to participate in the project 2016/09/16 Saha Group Project designs and implementation plan 2016/09/17 SCB Market sounding - Interest to participate in the project 2016/09/17 SCG Market sounding - Interest to participate in the project 2016/10/27 PTT Market sounding - Interest to participate in the project 2016/11/28 CP Project designs and implementation plan 2016/12/07 Krungsri Bank Project designs and implementation plan 2016/12/08 CP Project designs and implementation plan 2016/12/08 Amata Corp. Project designs and implementation plan 2016/12/08 Embassy of Japan in Thailand Project designs and implementation plan 31

33 32

34 Chapter 3 Project Description and Technical Consideration 3.1 Background and Need for the Project Project Background The Government of Thailand is in the process of formulating the HSR Eastern Line (Bangkok Rayong). SRT commissioned the feasibility study, detailed designs and bid document preparation with local funds. By use of the result, the Government has been preparing for implementation of the HSR Eastern Line. Even though the project was proposed to be financed under PPP scheme by the intention of the Government, there is no commitment on investment so far by the private investors particularly due to large construction cost of HSR system. Despite the plan of the Government to start the selection process of private business operator soon, it is hard for any private firms to respond to their bid call. Therefore, it is necessary to propose more feasible alternative in collaboration with Thai private sector and promptly start implementation National Development Plan The aim of this project is to establish a strong axis in the nation in order to address the issues of economic slowdown, over-congestion in Bangkok, unequal development, and regional gap. By introduction of high speed intercity railway, transport service will be highly improved. This will explore the potential for economic activities such as consumptions and investments of the areas along the corridor by enhancing the accessibility between the corridor and other regions. Furthermore, individuals and private companies will stimulate consumptions and business investments, enhance business efficiency, and thereby increase residential population. In the mid-term, the region will enjoy further development by making use of economic partnerships through international division of labor with neighboring countries. For this purpose, exploration of its potential through inter-city railway development before the economic growth of the neighboring countries becomes significant is a key strategy for Thailand Regional Development Plan The Eastern Seaboard is Thailand's center for export-oriented industries with a focus on the automotive industry because of its good access to the Laem Chabang port and the tax incentives by the Government. The region houses over 600 Japanese firms. Progressive residential development around the industrial area is leading urbanization. In particular, Si Racha, Chonburi & Pattaya attracts intensive investments. As the result of highway development, express bus takes central role for intercity transport. However, bus service does not offer convenient service for commuters taking into account the hourly operational frequency and its location outside of city center. As for railway transport, SRT pays attention to freight transportation in the Eastern Seaboard, while passenger service with very low frequency attracts small patronage due to aged facilities and low efficiency / punctuality. As such, intercity public transport measures are very limited and connectivity remains to be a major issue. Also, chronic traffic congestion around industrial estates became a concern of the Ministry of Transport Need for the Project The Transport Infrastructure Investment Action Plan 2017 announced by the Ministry of Transport lists the HSR Eastern Line (Bangkok Rayong) as a continuous program since In the meeting of the Committee for State Enterprise Policy (Superboard), the Prime Minister Prayut showed his strong intention to select the HSR Eastern Line as fast track project together with Red Line, ARL, and HSR Bangkok Hua Hin. Details are being discussed among PPP council and the Ministry of Transport. This study aims to propose more feasible railway project from the standpoint of the potential private investors, covering the scope of the following. 1) Reduction of project cost by alternative railway system, i.e. high speed commuter rail 33

35 2) Improvement of profitability through property development and far more increase of non-fare revenue by joint efforts with local private investors who own lands along the corridor and around the stations 3.2 Project Policy and Decisions Policy and decisions made on the Project are as follows: Policy The team carried out the study with the following approach. Study Approach In collaboration with Thai private firms, develop project designs to satisfy the needs of potential investors Propose infrastructure project along with the development plans in the Eastern Seaboard Make fare comparison of project effectiveness to HSR Eastern Line Bangkok Rayong Project. The team set out the following policy of the Project. Policy of the Project Minimize requirement of land acquisition by use of the roadside of National Highway No.7 Provide HS commuter service in the beginning with future provision of HSR service on the same track Design appropriate service level as commuter line with a headway of less than 15 minutes Promote use of service by setting the fare level comparable to the existing bus service Prepare development plans appropriate for PPP by reducing project cost Enhance viability of the project with new town development at the land along the corridor Ensure good connectivity by providing feeder service between new town and existing city center Enable passengers to easy access to Bangkok by interoperation with the existing ARL Link Suvarnabhumi and Uttapao Airport at about 40 minutes in accordance with the Government policy Approval Process Under the latest PPP Act in Thailand, decision making for PPP projects is under the responsibility of SEPO and PPP Policy Committee and process for approval was made simpler than the past administration. The decision making period by the Government also was shortened to 60 days. This means the entire process for project selection and approval takes 7 months to 12 months instead of 2 years in the past. Selection of the business operator shall be by bidding. After assessment by the selection committee consisting of the representative from the implementing agency, SEPO, Board of Budget, and Office of Legal Affairs, the final decision must be made by the Council of Minister as cabinet approval. The following figure indicates the procedure for project approval and selection of business operator. The current PPP Act envisages only the projects proposed by the Government and has no provision for project proposal by the private sector. At present, the Prime Minister orders the implementing agencies and administrating ministries of priority projects to prepare the detailed project reports. Also, he instructs relevant agencies for project assessment to report progress, issues and obstacles of priority projects to the PPP committee on monthly basis. 34

36 Source: PPP Law (2013) and PwC Figure 3-1:Approval Process of PPP Projects Source: PPP Law (2013) and PwC Figure 3-2:Selection Process of Business Operator Decisions Responses and decisions by the key stakeholders of the Project in the course of this study are summarized as follows: The Team submitted the project proposal to the Minister of Transport in December Some stakeholders stated the proposal is implementable and economically more viable compared to the HSR Eastern Line. Meanwhile, Thai side concluded that they should rush to obtain cabinet approval with the existing project plans for the purpose to secure the budget under the existing government. They will further assess the feasibilities of two proposals and will select the better proposal at the time of review after cabinet approval. 35

37 It was confirmed that the alteration to our proposal requires no re-approval from the Government as the proposed cost is lower than the budget of current discussion and the route runs parallel to the original proposal. Revisions to the proposal after the Cabinet decision will be carried out by OTP based on direction from the Ministry of Transport. In case of a change in route, either OTP will open a tender for detailed F/S, design, tender document preparation, EIA survey, etc. or the Thai government will request from the Japanese government assistance to carry out full or partial tasks with funds from Japan including JICA. Upon approval of the deliverables by the Ministry of Transport and the environmental department, preparation for project implementation will be in place. 3.3 Project Description This section describes the outlines of the proposed project, which consists of HS commuter railway and station area development HS Commuter Railway The HS commuter railway project is proposed as follows. (1) Route A HSR Eastern Line Bangkok Rayong was proposed in the corridor along the existing right of way of SRT in the F/S and the detailed designed by SRT, while this study proposed the route corridor of HS commuter line along with the national highway No.7 at the section between Suvarnabhumi Airport and Pattaya. A comparative assessment was made between the two routes. Figure 3.3 and 3.4 indicate key areas and facilities in the said corridor and the map of both routes, respectively. Both of the alignment envisages all elevated structure for the purpose to prevent trespass of local residents and due to the existence of many flyovers crossing the corridors. The proposed plan and profile drawings of the Project are enclosed in the Appendix 3. ARL Makkasan Station Suvarnabhumi Airport Amata Industrial Estate Pattaya City Siracha City Laem Chabang Port Uttapao Airport (at the extension of the project location) Map Ta Phut Port (at the extension of the project location) Rayong City (at the extension of the project location) Source: Study Team Figure 3-3:Key Locations along the Corridor 36

38 Source: Study Team Figure 3-4:Route Map (HSR and HS Commuter) (2) Alignment and Station Locations 1) Beginning and End of the Project This study focused on the route alignment of the section between Suvarnabhumi Airport and Pattaya, while Pattaya Rayong section is treated as the second phase of development (out of the scope of this study) in general accordance with the National Social and Economic Development Plan of the Government. The route alignment of the second phase was assumed to be identical to the HSR Eastern Line. 37

39 2) Horizontal Alignment As stated, the horizontal alignment was designed alongside of the National Highway No.7. Unless unavoidable, the alignment follows that of the National Highway to minimize land acquisition. Also, part of the railway alignment runs across the Highway at elevated level. 3) Vertical Alignment As stated, the vertical arrangement of the alignment is all elevated except at the link of Suvarnabhumi Airport where underground structure was already built with a provision for future extension. The gradient design referred to the Tokaido Shinkansen (HSR) of Japan; 2.0% (up to the stretch of 1km), 1.8% (up to the stretch of 2.5km), and 1.5% (beyond). All the crossings with the existing major roads are vertically separated, securing necessary clearance above the roads. 4) Station Locations Stations are located at open lands suitable for new town development or ideal sites for interchange with other transport modes. By providing stations at the lands owned by the local private companies, requirement of land acquisition were kept minimum. The standard distance between each station is in the range of 20 30km. Table 3-1:Sections outside of National Highway No.7 Chainage Area of Land Reason (Beginning and End) Acquisition (sqm) To make the curve radius ideal for future HSR 27, To make the curve radius ideal for future HSR 7, To skirt the existing service area 53, To skirt the existing interchange 21, To make the curve radius ideal for future HSR 3, To make the curve radius ideal for future HSR 7, To make the curve radius ideal for future HSR 15,910 Total 137,968 Source: Study Team Table 3-2:Station Locations Station Name Chainage Chainage (cumulative Structure distance from ARL 1 ) Suvarnabhumi Underground (existing) New Chachoengsao Elevated New Chonburi Elevated New Siracha Elevated New Pattaya Elevated Source: Study Team (3) Traffic Demand Forecast 1) Fare Level A conventional four step procedure model was developed for the demand forecast of this study as developed in the form of a model enhancement of the Thailand National transport model during the past studies. The four steps of the traditional model are generation, distribution, mode split and assignment. The Transport demand for HSC should be fare sensitive whilst attempting to maximize both the economic benefits and fare box revenue. The base or reference fare has been initially established at 50 Baht boarding fare plus 2 Baht per kilometer or 250 Baht for a 100 kilometer trip. 1 Beginning of the chainage is at the terminal of Phaya Thai Station. 38

40 Table 3-3:Proposed Fare Table Suvarnabhumi New New New New Chachoengsao Chonburi Siracha Pattaya Suvarnabhumi New Cha sao New Chonburi New Siracha New Pattaya Source: Study Team 2) Traffic Demand Forecast Model This Study used the TDL2 forecast model which has been developed and widely applied by OTP (Office of Traffic and Transport Policy, Ministry of Transport) with the existing trip generation - attraction model and distribution model. The assumptions of the forecasts are summarized in the following table. Also, the report on ridership forecast of the project is attached in the Appendix 2. Item Forecast Year Travel Speed Fare Level Zone System Population Economic Growth Ratio Transport Network Development Impact Source: Study Team Table 3-4:Key Assumptions Traffic Demand Forecast Assumptions Commercial Operation (2022-), 10 years after opening (2032), 20 years after opening (2042) Average 132km/h as per the result of train operation plan Base fare THB 0 or 50 Baht plus THB 1.0/1.5/2.0/2.5 per kilometer Base fare THB /km case was selected as the best case. 926 zones and 8 outer zones nationwide following TDL2 model of OTP 68,128,000 (2020), 68,306,000 (2030), 65,996,000 (2040) based on the forecast of NESDB 1.67% ( ) : Average of the forecast of IMF and World Bank 3.03% ( ) : Average of the forecast of IMF and World Bank % (2020 onwards) : Based on the past studies and average of last 10years Roads and railways network based on the National Social Economic Development Plan and the latest results of similar studies. Night time population in the vicinity of each new station: 200,000 (Chachoengsao), 150,000 (Chonburi), 50,000 (Siracha), 20,000 (Pattaya) 3) Daily Ridership The estimated average daily ridership accounts for 26,000 passengers in 2022 and 84,000 passengers in 2042, which are about 2 times of the ridership of the HSR Eastern Line. Source: Study Team Figure 3-5:Ridership Forecast (Daily Average) 39

41 2022, Outbound 2042, Outbound 2022, Inbound 2042, Inbound Source: Study Team Figure 3-6:Ridership Forecast (By Direction) 40

42 (4) Choice of Railway System and Features The Study proposed introduction of HS commuter system compatible with the existing ARL. Also, addition of mini Shinkansen system running of the same track upon extension to the Uttapao Airport and Rayong in future was proposed. (Features) HS commuter system compatible with the existing ARL Maximum speed of 160km/h, ensuring interoperability with ARL Provision of civil facilities and trackwork for future HSR at the maximum speed of 250km/h Table 3-5:Features of the Selected Railway Systems HS Commuter System Max. Speed km/h Better flexibility in alignment designs Higher transport capacity Fully interoperable with ARL More choices of suppliers Source: Study Team Mini Shinkansen System Max. Speed km/h Faster travel speed Shorter journey time Interoperable with ARL Highly competitive for Japanese firms Also, the salient features of the HS commuter system are summarized in the following table. The HS commuter was designed to connect with the existing ARL and fully interoperable with it. Therefore, majority of the subsystems shall comply with the system components, structures and specifications of ARL. Table 3-6:Salient Features of HS Commuter System Item Specification Operation Designed Max. Speed 160 km/h (future: 250 km/h) Running direction Left Construction Gauge 1,435mm Standard Rail 60kg/m Min. Curve Radius 2,500m (400m, absolute minimum) Min. Vertical Curve 10,000m Max. Cant 200mm Max. Gradient 2.0% (up to 1km), 1.8% (up to 2.5km), and 1.5% (beyond) Distance between track 4.0m centers Design Load 16t Effective Platform Length 146m Structure Station PC Box or Portal Frame Railway Line PC Box Rolling Stock Dimension LWH : 20,993mm x 2,950mm x 4,070mm Composition 3 car trainset (initial), 6 car trainset (future) Power Output 1,500kw 41

43 Passenger Capacity Seating 150, Total 656 passengers per train Power Supply Electrification AC Traction AC 25,000V 50Hz Power Distribution Overhead Catenary Signaling ATP ATO ATS Communication DTS, Clock, TEL, CCTV, PA, DRS, SCADA, SMS, PIS, Trainborn COM, CASS, FIDS, OA/IT Source: Study Team (5) Travel Time Travel time between each station is summarized in the following table Table 3-7:Travel Time Unit: Minutes Suvarnabhumi New New New New Chachoengsao Chonburi Siracha Pattaya Suvarnabhumi New Cha sao New Chonburi New Siracha New Pattaya Source: Study Team Source: Study Team Figure 3-7:Travel Time (HS Commuter From Makkasan, HSR From Suvarnabhumi) Transportation plans of HS commuter are proposed as follows. In the early years of commercial operation, the designed transport capacity exceeds Peak Hour Peak Directional Traffic (PHPDT). This is to make the headway of operations satisfactory to the commuters. 42

44 Table 3-8: Transport Plan Daily Ridership 26,000 47,000 84,000 PHPDT 1,560 2,930 4,760 Designed Headway 12 min. (Peak), 15 min. (off peak) Train Composition 3 cars 3 cars 3 cars/6 cars Designed Hourly Transport Capacity 3,280 3,280 5,248 Fleet Requirement (Trainset) 15+2 sets 15+2 sets 20+2 sets Fleet Requirement (Car) 51 cars 51 cars 66 cars Passenger Kilometers Travelled 2,448,000 4,362,000 7,773,000 Annual Fare Revenue (THB Bil.) Source: Study Team (6) Depot and Maintenance Plan 1) Depot Location The proposed location of the depot is in the premise of New Chonburi Station, where the land belongs to the property of a local partner company. Therefore, no land acquisition is required for development of the depot. Five ha of land is necessary for the depot. 2) Maintenance Capacity The depot shall have ranges of maintenance equipment necessary for all inspection and maintenance of HS commuter trains, having a capacity of maintenance for 17 trainsets (51 cars). Land for expansion must be secured to enable inspection and maintenance for 22 trainsets (66 cars) in future. Maintenance base yard for future HSR trains should also be accommodated in the same area or otherwise develop additional depot at a different location, e.g. Rayong. 3) Stabling Capacity The depot shall have a maximum stabling capacity of 17 trainsets (51 cars). 4) Depot Facility and Equipment Facility and equipment of the depot include stabling lines, train wash plant, wheel lathe, inspection and repair equipment for wheels, bogies, traction motors, braking tests, air conditions, pantographs, battery devices, etc. Item Stabling Capacity Table 3-9:Depot and Maintenance Plan Description 17 stabling lines for 3 car trainsets General overhaul (within 8 years) & critical parts inspection (within 4 years) XX trainsets in total for 4 years Monthly inspection (within 3 months) Inspection and XX trainsets for 3 months Repair Capacity Train inspection (within 10 days) X trainsets daily Daily checkup (before departure from depot) All trainsets daily except stand-by Source: Study Team (7) Track Layout As stated, the HS commuter line is designed to allow interoperation with ARL. Two systems will be connected at the Suvarnabhumi Airport Station and through Lat Krakbang Station without transit at the Airport. The following figure shows the proposed track layout of HS commuter. 43

45 Source: Study Team Figure 3-8: Track Layout (Above: ARL, Below: HS Commuter) (8) Civil Structure and Architecture 1) Civil Structure Civil structure of the Project shall be designed with a provision for future HSR system at the speed of Maximum 250 km/h. The structure envisages PC box girder as widely introduced in urban railway systems in Bangkok and the roadside of the National Highway No.7 will accommodate its piers. Exceptionally, a portal frame structure is proposed at the location to cross over the Highway. Source: Study Team Figure 3-9:Typical Cross Section (Main Line, Pier at Roadside) 44

46 Source: Study Team Figure 3-10:Typical Cross Section (Main Line, Track at Road Center) 2) Architecture Station structures were planned with a choice of PC box girder (at New Chachoengsao and New Siracha Stations) or portal frame (New Chonburi and New Pattaya Stations) taking track layout and spatial requirements into consideration. Effective platform length is 142m for 6 car train. A provision of additional 40m each at both ends, i.e. a total of 223m, must be secured to accommodate 10 car trains of future HSR. Width for platform is a choice of 10m and 15m. New Chonburi, New Pattaya Sta. Source: Study Team New Chachoengsao, New Siracha Sta. Figure 3-11:Platform Dimension 45

47 Source: SRT HSR F/S Figure 3-12:Typical Cross Section (Station) Facilities and equipment at concourse level Passenger facility (ticket booths, fare gates, restroom, stairs, lifts & escalators etc.) Station staff facility (meeting rooms, station master room, restroom, lounge, etc.) E&M equipment (environmental control system, etc.) Facilities and equipment at platform level Passenger facility (stairs, lifts and escalators, etc.) E&M equipment (power supply room, substation room, firefighting room, air conditioning room) Station facilities and equipment shall introduce universal design concept, ensuring user-friendliness to all kinds of passengers, regardless of handicaps, age, gender, race, etc. 46

48 Source: SRT HSR F/S Figure 3-13:Image of Typical Station (9) Rolling Stock In general accordance with the existing ARL, specifications of HS commuter trains are illustrated as follows. Except considerations of route conditions and characteristics, selective Japanese suppliers can produce such rolling stock. Composition (Mc: Car with Cabin, T: Trailer) Dimension Table 3-10:Specifications of Rolling Stock Item Specification Length (Mc) Length (T) Width Mc T Mc 20,339 mm 20,339mm mm Passenger Capacity 3 car trainset Seating Min. 156 Total Min. 656 Body Material Max. Speed Running Performance Traction System Braking Bogie Source: Study Team Stainless / Aluminum alloy 160 km/h Acceleration km/h/s (m/s 2 ) Deceleration (Ordinary/Emergency) Power Collection Control System Main Motor km/h/s (m/s 2 ), 1.1km/h/s (m/s 2 ) 25kVAC ; 50Hz; OCL VVVF IGBT Inverter AC V, 50 Hz 3 Phase motor Air-pressure brake, regenerative brake Bolsterless 47

49 Source: Study Team Figure 3-14:Rolling Stock and Structural Gauge (10) Trackwork Trackwork of HS commuter shall be designed to allow introduction of HSR in future. Therefore, rich experience and technology of building high speed operation are necessary for the Project. Specifications of trackwork are based on those of J-Slab (of Japan) or Rheda2000 (of Germany) having the actual track record in Taiwan HSR. The distance between track centers is assumed to be 4,000mm, equivalent to the existing ARL 2. 2 The structural gauge of ARL is 3,800mm wide with distance between track centers of 4,000mm and car width of 2,796mm. Meanwhile, the same dimensions of Shinkansen are 4,000mm, 4,300mm, 4,300mm. With the assumption of the width of ARL rolling stock gauge at 3,000mm, this is smaller than that of Shinkansen by 400mm. Therefore, estimated absolute minimum distance between track centers for introduction of Shinkansen in Thailand could be 4,300mm - 400mm = 3,900mm, and less than 4,000mm. This indicates the distance between track centers of the existing ARL is sufficient and able to secure safety for future introduction of Shinkansen. 48

50 J-Slab (of Japan, Taiwan HSR) Rheda (of Germany, ICE) Source: Study Team Figure 3-15:Trackwork for HSR Trackwork includes installation of trackwork materials including rail, slab, fastening, turnouts, etc. and construction of track base. (11) Signaling System Signaling system of HS commuter should be fully compatible with the systems of ARL to avoid unreasonable investment on onboard equipment and alterations to the existing fleets. At present, ARL uses LZB of Siemens and it will be altered to ETCS standard in near future. In designing of signaling system for the Project, the planned specifications must be reflected to allow interoperation. Signaling system typically consists of the following elements; ATP system Interlocking system ATO system Train detection system Data Transmission System ATS system UPS system Point machine (12) Communication System Communication system typically consists of the following elements; Data Transmission System (DTS) Telephone system CCTV Public Address (PA) system Clock system Train radio system Disaster prevention system Passenger information system UPS (13) Operation Control Center (OCC) OCC is an integration of traffic dispatching functions and power supply supervisory functions, administrating not only normal operation but also emergency operation in the event of accidents or disasters. OCC of HS commuter is planned to be developed inside depot in the vicinity of New Chonburi Station. OCC is composed of the following elements; Data Transmission System (DTS) ATS central control device ATS console 49

51 ATS mimic display Train timetabling system ATP/ATO ground equipment control device ATP monitor device Interlocking system central control device Operation console for dispatchers Color laser printer UPS (14) Supervisory Control and Data Acquisition (SCADA) With the functions of supervisory control and data acquisition, the system enables centralized supervision of power supply system at OCC. SCADA remotely supervises and controls equipment at receiving substations, traction substations, and electrical rooms. OCC Source: Taiwan HSR (Toshiba) Figure 3-16:OCC and SCADA SCADA (15) Power Supply System The power gird in Thailand belongs to the EGAT, MEA and PEA. Its frequency is 50 Hz and transmission voltages include 500 kv, 230 kv, 115 kv, 22 kv and 400 kv. Transmission lines above 230 kv belong to EGAT. The interval between substations for the mainline should be within 70km as per the standard in Japan. Given the land availability, preliminary locations are; New Chonburi and New Siracha (2 locations) for mainline and at the depot in Chonburi (1 location) for depot substation. (16) Power Distribution System Power distribution system of HS commuter is simple catenary method of overhead catenary system (OCS). The height of catenary is assumed to be equivalent to the existing ARL, i.e. minimum 4640mm and maximum 5400mm. (17) Mechanical Equipment Station equipment includes air conditioning, water supply and drainage, firefighting, electrical equipment, lifts and escalators, etc. Air Conditioning Water Supply and Drainage Fire Fighting Electrical Equipment Lifts and Escalator Source: Study Team Table 3-11:Station Equipment Air Conditioning Water tank and auxiliary equipment, water supply pump, sanitary equipment, plumbing Fire cistern, pump, hydrant, plumbing, portable fire distinguisher Power supply equipment, UPS, lighting, grounding, fire alarm, office automation Elevators and escalators 50

52 (18) Platform Screen Doors (PSD) Introduction of half height PSD is proposed. By introduction of PSD, falls or trespasses of passengers to the track can be avoided. Also, passengers collision to the running trains can be prevented; thereby the operator can reduce the number of personnel at platform level for safety purpose. Among movable and fixed types, the former is proposed. Source: JR Central Mobile PSD Figure 3-17:Platform Screen Door Fixed Fence PSD consists of the following elements; Fixed and mobile screens Entrance zone for train crews Control and monitoring system Safety system including censors, alarms and displays Power supply and UPS PSD requires system integration with part of ATO system, onboard antenna, CCTV at platform. (19) Automatic Fare Collection (AFC) AFC can minimize manpower, reduce special requirements at station, and prevent free riders. Also, it will enable the operator to collect passengers travel and transit information that is useful for service improvement. AFC system of HS commuter shall at least provide common ticking with the existing ARL, and seek for further convenience by integration with BTS, MRT, Purple Line and others as appropriate. IC card (ARL) Automatic fare gate Source: ARL (Left), JR Central (Right) Figure 3-18:Automatic Fare Collection AFC system is composed of the following elements; Contactless IC card IC card transaction system Automatic ticketing system Automatic fare gate Ticketing staff terminal 51

53 Central server Network Cash handling device In addition, a clearing house service will be required to enable common ticketing system with other transit operators. (20) Passenger Information Display System (PIDS) PISD supervises and controls comprehensive operational information, including trains, security and passenger services. By introduction of PIDS, information necessary for crews and passengers can be displayed, sent, processed and supervised. ARL already equips PDS with particular feature of flight information display system at City Air Terminal (CAT) in Makkasan. This should be provided at key stations of HS commuter. PIDS is a part of communication system package. Flight Information Display (ARL) PIDS at Platform (ARL) Source: ARL Figure 3-19:Passenger Information System 52

54 3.3.2 Station Area Development Analysis and Prospects of the Real Estate Market (1) Property Market in Thailand Thailand's real estate market is said to be generally flat, but along with the rapid urban railway development in Bangkok, the development of areas along railway lines has become active. In respect of the areas nearby Bang Sue Station, which is the starting station of Thai high-speed railway planned to be developed between Bangkok and Chiang Mai, bidding for the commercial district 32 Rai (about 5.1 ha) out of a total of 302 Rai (about 48 ha) across 4 blocks owned by the SRT is scheduled to be taken place in March In respect of the remaining blocks, bidding is scheduled two years after the completion of the railway system. In respect of the areas nearby Makkasan Station which is the transit station of ARL and MRT, 497 Rai (about 80ha) of land owned by the SRT is planned to be developed. Initially, the SRT planned to lease the said land to the Treasury Ministry for 99 years to repay the SRT's massive debt against the Treasury Ministry, but the plan is postponed until the constitutional revision procedure is settled down. In addition to the above, on the land in front of BTS Chong Nonsi Station, the 314 m high-rise building "MahaNakhon" in which Ritz-Carlton Residence is located, and the large supermarket complex directly connected to MRT Rama 9 station "The Super Tower" which was part of "The Grand Rama 9" Redevelopment Project, and other large-scale projects have been completed. Activation of land developments along railways such as these has led land prices to soar. The latest market situation is explained below, according to the research "Bangkok Overall, Q3 2016" conducted by CBRE, a major real estate service in the US. The supply of new condominium units in Bangkok has increased since Regarding sales conditions, condominiums in the prime areas targeting wealthy people are going strong, while sales of midtown and suburban property are still in a tough situation. With respect to offices, the leased area only slightly increased, and the vacancy rate has declined due to the limited number of offices supplied. Source: CBRE Market view Bangkok Overall, Qs 2016 Figure 3-20:Supply of New Condominium Units 53

55 Source: CBRE Market view Bangkok Overall, Qs 2016 Figure 3-21:Bangkok Office Market (2) Real estate investment in Thailand Regarding the real estate investment situation according to the "Global Real Estate Transparency Survey" edition, which is updated every two years by Jones Lang LaSalle (JLL), a major US real estate services giant, despite the significant gap between the 11th place Singapore and 95th place Myanmar, all ASEAN countries showed an upward trend overall. Thailand is ranked at the 38th place with "medium to high" transparency level. The score has increased although it ranked lower than that of In general, it is analyzed that the development of REITs would lead to an increase in transparency in terms of information disclosure and governance. In Thailand where the 1st REIT was listed on the stock exchanges (SET) in October 2014, further improvement of investment situation can be expected Market Analysis and Demand Forecasting Land development along railway lines related to this Project is based on the assumption that it is composed of advanced industry cluster and incidental functions to increase the appeal of the town. The overview of the current situation and outlook of the manufacturing industry which play a central part, are explained as below. (1) Investment Situations We take a look at the investment trends based on the number of investment approved by the Board of Investment of Thailand (BOI). A flood that occurred in November 2011 and an anti-government demonstration triggered by former prime minister Thaksin's intense amnesty bills that aggravated from the end of 2013 have become major factors that adversely affected economic activities in Thailand, but the number of BOI approvals has shown an upward trend on a long term basis. In terms of areas, the number of approvals in Zone 2 had been steadily high until 2014 where the zone system was still adopted. According to the data in 2015 and beyond where the investment incentive system was revised, the number of approvals in the central and eastern regions including Bangkok accounted for the majority of approvals. 3 Ranking is done targeting 109 real estate markets in the world, using 139 elements including quantitative data and questionnaire survey. 10 countries was classified Transparency "High" which accounted for 75% of direct investment in the world's commercial real estate. Japan's transparency level was "medium and high" at 19th place. (Source: JLL website) 54

56 Zone 1:Bangkok, Nakhon Pathom, Nontaburi, Samut Sakhon and Samut Prakarn Zone 2:Rayong, Phuket, Samut Songkharm, Ratchaburi, Kanchanaburi, Suphanburi, Angthong, Ayuttaya, Saraburi, Nakhon Nayok, Chagoengsao and Chonburi Zone 3:The 59 remaining Provinces Source: Prepared by the Study Team based on BOI data Figure 3-22:Changes in the number of BOI approved projects Central part Eastern part Northeast ern part Northern part Western part Southern part Others Source: Prepared by the Study Team based on BOI data Figure 3-23:District wise ratio of number of BOI approved projects Foreign direct investment (FDI) is showing the same trend, and investment from Japan maintains the top position in terms of both number of transactions and investment amount. In terms of area, FDI in the Zone 2, which covers the eastern districts, is overwhelmingly high. 55

57 Source: Prepared by the Study Team based on BOI data Figure 3-24:Changes in the number of approved FDI from Japan (2) Investment situation in eastern districts As it is evident from the trends in the number of BOI approvals mentioned above, investment in the eastern districts, where the new commuter railway development is planned, has been already initiated, and a number of Japan based companies are advancing in the area, primarily manufacturers in the automobile industry. In addition, due to the Eastern Economic Corridor (EEC) Plan approved by the Cabinet on 28 June, 2016, cluster of advanced technology industries in the eastern districts is expected to further increase. The outline of the EEC plan is explained as below Table 3-12:Outline of EEC Plan Target area Chonburi Province, Rayong Province, Chachoengsao Province (i) Airport U-Tapao International Airport (ii) Water Transportation Sattahip s Commercial Port Lam Chabang Port Map ta Phut Industrial Port Infrastructure (iii) Road Investment motorway, route Bangkok-Chonburi-Pattaya-Rayong-Map ta Phut, Laem Chabang-Nakhon Ratchasima (iv) Railway 1 st section: Double-track Railway, Chachoengsao-Klong Sip Kao-Kaeng Khoi 2 nd Section: Bangkok-Rayong First S-curve Industry (Short term, medium term training) Next generation automobile industry, smart electronics, medical and health 10 recommended tourism targeting wealthy group, agriculture-biotechnology, future food industries New S-curb Industry (Long term training) Robotics industry, aviation-logistics, biofuel-biochemistry, digital industry, medical hub Source: Prepared by the Survey Team based on the data published by the Thai government Station Square Development Plan (1) Basic idea PJ total amount PJ total In this Plan, the population is assumed to significantly increase as a result of the new town development. It is necessary to add a function as a transport hub to the station square in order to help users smoothly move to and fro the newly developed town and the new station. Also, in order to enhance the appeal of the town, a plan will be made aiming to improve the convenience of the station users and create a space suitable as a face of the new town. 56

58 1)Increase of efficiency of access within the new town In order to facilitate access of workers and residents to companies located within the area and nearby stations, enough space needs to be secured to provide the park-and-ride function (parking lots for cars/motorcycles and bicycles) and a bus terminal. Regarding the bus terminal, a plan is made by assuming an introduction of a loop bus service within the new town run by the municipality (community bus) or company buses, and taking the traffic safety into consideration through pedestrian-vehicle complete separation. 2)Improvement of convenience of station users For the purpose of forming a nice urban space, a green park will be developed. It will be an open space that allows residents to exchange and communicate with each other or hold various events. It will also be used as a disaster prevention base. 3)Creating a space suitable as the face of the new town As one of the functions to create a town in front of the station, facilities that can be served as the face of the new town (landmark) will be developed. Use of new commuter lines will be promoted, at the same time liveliness will be created by providing functions suitable for the advanced technology industry cluster town based on the collaboration and positioning between the stations. Land mark Green Belt Station Square Park Park & Ride Station Source:Survey Team Figure 3-25:Image of station square (2) Role of each station square 1)New Chachoengsao station Regarding New Chachoengsao Station to which some of the capital functions of Bangkok are assumed to be transferred, a park will be developed that can be served as a disaster prevention base, and accessibility to government agencies and other organizations that can be the base of industry - academia - government collaboration will be taken into consideration. 2)New Chonburi Station With regard to New Chonburi Station, where invitations of various functions to the vast area of about 570 ha are assumed, the populations in the new town during both daytime and night time are expected to significantly increase. For the reason, a large park-and-ride function will be provided on the west side of the station to ensure the accessibility to the station. For the east side of the station which is supposed to be served as the main entrance of the new town, a sports park with a football stadium or MICE 4 function will be placed so that the area can play a central role representing the nearby towns along the railway. 4 MICE is initial letters of Meeting (meetings conducted by companies), Incentive Travel (reward and training trips), Convention (international meetings organized by international organizations, groups or academic societies) and Exhibition/Event, and which is a general term for business events that are expected to attract many people. (Source: Tourism Agency homepage) 57

59 3)New Si Racha Station Regarding New Si Racha Station which has currently undergone urbanization, the value as a residential area will be increased by developing, primarily, a green park and large commercial facilities that can bring about the formation of a nice living space Overview of TOD Facility Plan (1) Basic idea A town will be developed utilizing Japan's experiences backed by its reliable track records and expertise in new town development in Japan for the purpose of mitigating overcrowding in Tokyo and creating a new base which was integrated with the development of nearby areas along the railway lines accompanied by new construction and extension of railway,. The basic ideas are as follows: 1)Integrated development of new commuting railway and new town Promotion of systematic town planning Creation of a comfortable commuting environment (ensuring comfort, reliability and safety) Realization of transfer of Bangkok's capital function by reducing traveling time from Bangkok and increasing the certainty of traveling Development of a rich living environment due to close proximity of housing, workplace, culture and information dissemination base. 2)Development of land along railway lines utilizing existing resources Contribution to the development and advancement of new industries through collaboration with administrative functions and education/research institutions by utilizing the industrial base in which manufactures such as the automobile industry have already clustered. Creation of a rich base along the railway line and liveliness. Global Administration Industry Bangkok 14 min. 8 min. Suvarnabhumi International Airport Gateway to the sky New Chachoengsao Station Secondary city center of Bangkok Relocation of part of the capital functions New Chonburi Station University Residential environment 16 min. New advanced industrial base Transformation to R&D center from manufacturing base New Si Racha Station A nice living environment Source: The Study team Figure 3-26:TOD Development Concept for Each Station (2) Preceding cases in Japan 13 min. Tourism New Pattaya Station Rayong Beach resort The Tama New Town Project was developed to address the urban problems that occurred following the concentration of population and industries in the Tokyo metropolitan area while the Tsukuba Science Town Project was developed aiming to establish a base for high-level research and education base. The objectives and directions of the respective projects are common with the current 58

60 challenges and growth strategies of Thailand and Bangkok. For the reason, Japan's new town development projects are referred to. 1)Tama New Town During the period of Japan's high economic growth, the population and industries got concentrated in the Tokyo metropolitan area, resulting in shortage of housing and urban sprawl in suburban areas. In order to cope with this problem, a project was developed with the purpose of supplying large quantities of high-quality housing. The extension of the railroad lines was also carried out during the project period, i.e., the Keio Electric Railway and the Odakyu Electric Railway began operation in 1974, as well as the Tama City Monorail in The transportation infrastructure including bus services was enriched. Table 3-13:Outline of Tama New Town Location Hachioji City, Machida City, Tama City and Inagi City in Tokyo Project executer Tokyo Metropolitan Government, Tokyo Metropolitan Housing Supply Corporation, UR Urban Network Organization Total Project Cost 2.1 trillion yen Schedule 1965 Urban Planning is approved 2005 Project is completed Area size 2,884 ha Targeted population 342,200 people Targeted population per ha 119 people/ha Actual population 1985: 100,000 people (29%) (Achievement ratio against 2003: 200,000 people (58%) the plan) Source:The Study Team prepared from related official documents 2)Tsukuba Science Town It was launched as a national project aiming at mitigating overcrowding in Tokyo by systematically transferring national research and research institutions from Tokyo as well as creating a base for high-level research and education. As many as 32 national research and educational institutes including the Japan Aerospace Exploration Agency (JAXA) and the University of Tsukuba have been moved into the Town, and over 20,000 researchers are engaged in research activities. In 2005, the Tsukuba Express began its operations, allowing travelling to and fro Tsukuba station and Akihabara station in 45 minutes at the fastest. Table 3-14:Outline of Tsukuba Science City Location Tsukuba City, Ibaraki Prefecture Project executer Central government, UR City Organization, Ibaraki Prefecture and Tsukuba City Total Project Cost 1.1 trillion yen Schedule 1961: Approved by the cabinet 1973: University of Tsukuba is founded 1980: 43 organizations are transferred 2005: Tsukuba Express is launched Area Size Science district: 2,700 ha Nearby development district: 25,700 ha Targeted population Science district: 100,000 people Nearby development district: 250,000 people Targeted population per ha Science district: 37 people/ha Nearby development district: 10 people/ha Actual population Science district: 79,000 people (79%) (Achievement ratio against the plan) Nearby development district: 135,000 people (68%) * According to the census

61 New railway Tsukuba Express Operating distance: 58.3 km Number of stations: 20 stations Total project cost: billion yen Maximum speed: 130 km/h Number of passengers per day: Approx. 340,000 Minimum fare: 170 yen Source:The Study Team prepared from related official documents 3)Kashiwanoha Campus It is located about halfway between the Tsukuba Science Town as mentioned above and the central Tokyo. Under the concept of "International academic research town/next-generation environmental town = Kashiwanoha International Campus Town through public-private partnership collaboration", a town is being developed to create new industries and cultural values through cooperation of companies, universities, local governments and citizens. Condominiums, hotels and commercial facilities are clustered in one area compactly and the campuses of the University of Tokyo and Chiba University are located. Table 3-15:Outline of Kashiwanoha Campus Location Kashiwa City, Chiba Prefecture Project executer Chiba prefectural government Total Project Cost 96.3 billion yen Schedule Aug. 2000: Project is approved Mar. 2023: Project is completed Area Size 273 ha Targeted population 26,000 people Targeted population per ha 95 people/ha Actual population 2012: 4,429 people (17%) (Achievement ratio against the plan) Source:The Study Team prepared from related official documents (3) Transit-oriented development (TOD) at respective stations The directionality and functions to be introduced for each station are assumed as follows. Table 3-16:Outline of TOD development Station Directionality Function introduced New Chachoengsao Creation of a secondary city center of Bangkok following the launch of a new commuter railway by relocating some of the Bangkok s capital functions, aiming to mitigate overcrowding in Bangkok. Administrative functions Offices Arena in which international events can be held Hotels New Chonburi New Si Racha Source:The Study Team Creation of a town in the entire Chonburi and Si Racha districts modeled on Tsukuba Express, Tsukuba Science Town as well as Kashiwanoha Campus which is one of the land development projects along railway lines. Commercial facilities R&D Centers Advanced factories Universities MICE Sport parks (Football stadium) Hotels Hospitals (Medical tourism) Commercial facilities Service apartments Housing Commercial facilities Service apartments Housing 60

62 1)New Chachoengsao Regarding New Chachoengsao Station which is located close to Bangkok and the Suvarnabhumi International Airport, some of the capital functions will be relocated from overcrowded Bangkok, and the plan ensures that the industry will become more sophisticated through close collaboration between industry, academia and government. Commercial and culture Park Greenery zone Housing Park Offices Government, financial offices New Chonburi Station Usage Housing Offices Commercial and culture Financial, Gov t offices Park Greenery zone Road Target area Area size (ha) Source: Study team Figure 3-27:New Chachoengsao Land Use Plan Source:The Study Team Figure 3-28:New Chachoengsao Image 61

63 2)New Chonburi For New Chonburi, where a vast area is available for development, the area will be considered as the core of industry-academia-government collaboration to promote advance industrial cluster in areas along the new commuting railway lines. Functions will include a university, a convention center that caters for international conferences, hotels, shopping centers, hospitals and other facilities that are appropriate for the production cluster area with high added values, in addition to corporates' R&D centers and advanced production bases. University and hospital Housing Research Industry Station square Commercial and culture Greenery zone Park Usage Area (ha) % Housing Commercial Research Industry University&hospital Public facility Park Greenery zone Station square Road Station building Target area Source:Study Team Figure 3-29: New Chonburi Land Use Plan Source:Study Team Figure 3-30:New Chonburi Image 62

64 3)New Si Racha Urbanization of New Si Racha area has been progressed, and development of service apartments and commercial facilities targeted at Japanese is also undergoing. In line with the plan to make the entire area along the railway lines into an internationally competitive industrial cluster, the plan will focus on providing a nice living environment for expatriates and business travelers including Japanese. Housing Commercial Pattaya Station Usage Area (ha) % Housing Commercial Park Greenery zone Road Existing facility Target area Source: Study Team Figure 3-31: New Si Racha Land Use Plan Source:Study Team Figure 3-32: New Si Racha Image 63

65 Approximate calculation (1) New Chachoengsao 1)Outline of Plan For the estimation of the New Chachoengsao Project, the Development area is assumed to be 163 ha. Table 3-17:Outline of New Chachoengsao Project Item Item Area Site area SPC zone 1,630,000 m2 Owner zone 0 m2 Total 1,630,000 m2 Area for sale 1,189,800 m2 It may be changed depending on the road plan or park/green area plan. Occupant ratio 73.0% Source:The Study Team 2)Income and Payment Plan The Project Balance Plan is calculated based on the following assumptions. Costs for civil engineering work and designing are assumed based on the actual records. For land selling price, the same unit price as that of the New Chonburi Project is used. i. Total Project Cost Table 3-18:New Chachoengsao Project Total Cost Item Amount Basis of calculation Land 48,900,000 USD Civil engineering work 81,500,000 USD Land and infrastructure development Designing 4,075,000 USD Civil engineering work cost 5.0% Other expenses 7,742,500 USD Taxes, opening expenses, etc. Total 142,217,500 USD Source:The Study Team ⅱ. Sales Balance Table 3-19:New Chachoengsao Sales Balance Item Amount Basis of calculation Revenue 339,291,000 USD Commercial 13,950,000 USD 250 USD/m 2 Offices 81,360,000 USD 200 USD/m 2 Housing 221,400,000 USD 400 USD/m 2 Administration 15,327,000 USD 130 USD/m 2 Arena 7,254,000 USD 130 USD/m 2 Expenditure 14,769,540 USD Sales expenses 13,540,650 USD Sales period 3 years Taxes 1,228,890 USD Source:The Study Team ⅲ. Gain on sale Table 3-20:New Chachoengsao Gain on Sale Sales Cost Gain on Sale Profit Ratio 339,291,000 USD 142,217,500 USD 197,073,500 USD 58.1% Source:The Study Team 64

66 (2) New Chonburi 1)Outline of Plan For the estimation of the New Chonburi Project, the development area is assumed to be approx. 570 ha. Table 3-21:Outline of New Chonburi Project Item Item Item Site area SPC zone 50,000 m 2 Owner zone 5,643,333 m 2 Total 5,693,333 m 2 Area for sale 3,416,000 m 2 It may be changed depending on the road plan or park/green area plan. Occupant ratio 60% Source:The Study Team 2)Income and expenditure Plan The project balance plan was calculated based on the following assumption. Costs for civil engineering work and designing are assumed based on actual track records. Land selling price is adjusted for each usage based on the sales track records of nearby industrial parks. i. Total Project Cost Table 3-22:New Chonburi Project Total Cost Item Amount Basis for calculation Land 204,959,988 USD Civil engineering work 284,666,650 USD Land and infrastructure development Designing 14,233,333 USD Civil engineering work cost 5.0% Other expenses 27,897,331 USD Taxes, opening expenses, etc. Total 531,757,302 USD Source:The Study Team ⅱ. Sales Balance Table 3-23:New Chonburi Sales Balance Item Amount Basis for calculation Revenue 1,222,860,000 USD Commercial 52,000,000 USD 250 USD/ m2 Housing 1,143,600,000 USD 400 USD/ m2 Hotel 14,000,000 USD 200 USD/ m2 Convention 13,260,000 USD 130 USD/ m2 Sport park 0 USD Expenditure 49,079,339 USD Sales expenses 41,452,500 USD Sales period 5 years Taxes 7,626,839 USD Source:The Study Team ⅲ. Gain on Sales Table 3-24:New Chonburi Project Gain on Sales Sales Amount Cost Gain on Sales Profit Ratio 1,222,860,000 USD 531, USD 691,102,698 USD 56.5% Source:The Study Team 65

67 (3) New Si Racha 1)Outline of Plan For the estimation of the cost of the New Si Racha Project, the development area is assumed to be approx. 27 ha. Table 3-25:Outline of New Si Racha Project Item Item Remark Site area Site area 50,000 m 2 Owner zone 332,500 m 2 Total 382,500 m 2 Area for sale 266,500 m 2 It may be changed depending on the road plan or park/green area plan. Occupant ratio 69.5% Source:The Study Team 2)Income and expenditure Plan The project balance plan was calculated based on the following assumptions. Cost for civil engineering work and designing are assumed based on actual track records. A land selling price is applied based on the interview conducted in Thailand. i. Total Project Cost Table 3-26:New Si Racha Project Total Cost Item Amount Basis for calculation Land 97,920,000 USD Civil engineering work 19,125,000 USD Land and infrastructure development Designing 956,250 USD Civil engineering work cost 5.0% Other expenses 3,978,000 USD Taxes, opening expenses, etc. Total 121,979,250 USD Source:The Study Team ⅱ. Sales Balance Table 3-27:New Si Racha Sales Balance Item Amount Basis for calculation Revenue 197,106,000 USD Commercial 41,496,000 USD 741 USD/m 2 Housing 155,610,000 USD 741 USD/m 2 Expenditure 17,357,920 USD Sales expenditure 15,727,200 USD Sales period 2 years Taxes 1,630,720 USD Source:The Study Team ⅲ. Gain on Sales Table 3-28:New Si Racha Gain on Sales Sales Amount Cost Gain on Sales Profit Ratio 197,106,000 USD 121,979,250 USD 75,126,750 USD 38.1% Source:The Study Team 66

68 3.4 Remaining Issues Remaining issues that need to be addressed in terms of project plans of HS commuter system are summarized as follows Route Selection Responses and decisions by the key stakeholders of the Project in the course of this study are summarized as follows: The Team submitted the project proposal to the Minister of Transport in December Some stakeholders stated the proposal is implementable and economically more viable compared to the HSR Eastern Line. Meanwhile, Thai side concluded that they should rush to obtain cabinet approval with the existing project plans for the purpose to secure the budget under the existing government. They will further assess the feasibilities of two proposals and will select the better proposal at the time of review after cabinet approval. It was confirmed that the alteration to our proposal requires no re-approval from the Government as the proposed cost is lower than the budget of current discussion and the route runs parallel to the original proposal. Revisions to the proposal after the Cabinet decision will be carried out by OTP based on direction from the Ministry of Transport. In case of a change in route, either OTP will open a tender for detailed F/S, design, tender document preparation, EIA survey, etc. or the Thai government will request from the Japanese government assistance to carry out full or partial tasks with funds from Japan including JICA. Upon approval of the deliverables by the Ministry of Transport and the environmental department, preparation for project implementation will be in place. Table 3-29:Evaluation of Route Alternatives HS Commuter (Fare: THB /km) SRT HSR (Fare THB 2.0/km) Cost THB 93.8 Bil. (Saving THB 16.3 Bil) THB Bil. Schedule 4 years 4 years Land No substantial acquisition Acquisition for 14% of entire corridor Ridership 26,000 (2022)/day 13,180 (2022)/day Fare Revenue THB 2,260 M./yr. (2022) THB 926 M./yr. (2022) Travel Speed (Max) 160 km/h (Ave) 130 km/h (Max) 250 km/h (Ave) 161 km/h Economic EIRR = 12.51% EIRR = 9.8% TOD Very Large Opportunities Negligible Opportunities PPP Potential Medium High Low Integration High (Inter-operable) with ARL Source: Study Team Low (Transfer at Lat Krakbang Sta.) 67

69 3.4.2 Interoperation with ARL The project envisages the interoperation with the existing ARL, which allows passengers to access to the Bangkok city center without transfer of trains to ARL. Meanwhile, careful coordination with SRTET (subsidiary of SRT) will be necessary for such arrangement. The integration with ARL is vital for HS commuter to enhance convenience of passengers and increase ridership, while share of responsibilities such as amount of track access charge for interoperation must be mutually agreed between each operator Development Phases The proposal assumes the development section from Suvarnabhumi Airport and Pattaya, while the section from Pattaya to Rayong is defined as the extension. Given the fact that the Government intends to connect to Rayong as the core location of EEC, the project may include the entire section without phasing. With respect to the Pattaya Rayong section, both HS commuter and HSR Eastern Line assume the same corridor and there is not route alternative so far. The section requires land acquisition for 24 km out of the total 36km according to the latest designs. In particular, the section between Map Ta Phut and Rayong has no right of way of SRT, requiring 17 km of land acquisition. This implies that the Government should focus on the sections of no/less land acquisitions for early commissioning of the system Timing to Introduce HSR Service The team assumed that the HSR service should be introduced at the time of opening the extension to Rayong in phase 2. However, immediate introduction of HSR service may be required as it is an integral part of the National Investment Program under MOT and the Government has an idea to connect the Suvarnabhumi Airport and Uttapao Airport at around 40 minutes Lease of Land for Development The project is to build intercity railway at the roadside of the National Highway No.7. As the land is owned and managed by the Department of Highway (DOH) of MOT, permission for the use of land must be obtained. Coordination meeting with DOH is yet to start as the Government does not conclude the route alignment at this moment. An appropriate scheme for land lease shall be discussed and approved by MOT and other relevant organizations during the next study Utility Relocation The team recognized the existence of buried utilities such as communication cables at both sides of the National Highway. In order to build viaducts at the roadside, the project requires necessary coordination with DOH and utility companies for relocation. As DOH has records of utility relocation for other highway rehabilitation and upgrading projects, this will not cause significant impact on the project feasibility. 68

70 Chapter 4 Consideration of Environment and Social Aspect 4.1 Analysis of current situation (1) Characteristics of Project The eastern coastal area has formed the Thailand's largest industrial zone comprising of mainly the automobile industry, taking advantage of the favorable access to Laem Chabang Port and preferential treatment of investment tax offered by the government. In addition, the development of residential areas around the industrial parks has progressed where remarkable urbanization has been seen. Investment in Si Racha, Chonburi, Pattaya and other areas is rapidly increasing to meet vigorous demand. In respect of urban transport, highway buses have become the mainstay of passenger transportation as a result of the development of the highway network. However, due to the problems of bus service frequencies and location of bus terminals that are far from urban areas, the level of convenience for commuting purposes is not high. The Thai State Railway (SRT) operates trains to the eastern coastal area, but they are made of up mostly cargo transport. Passenger train services are less frequent, and the infrastructure and facilities are also aged. In these regards, it has faced a problem in terms of both efficiency and punctuality. For the reason, the railway is less used. Due to such a situation, the High-Speed Railway East Line Project (Bangkok-Rayong) is underway in Thailand. However, the PPP method was proposed for the funds and investment plan of the highspeed railway project on the intention of the Thai Government. However, a huge construction cost has become an obstacle. For the reason, Thai private enterprises cannot rush into a decision about investment. Further, although the Thai government plans to enter the contractor selection process early, it is unlikely that there are business entities that are interested in making an entry. Therefore, firstly, in order to improve the feasibility of the railway project, a railway project with a high-level of profitability enough to convince investors that show interest needs to be proposed jointly with Thai private enterprises. Secondly, in order to connect to the launch of the project without delay, we will study the following matters in this study: (1) a reduction in project costs by adopting a commuter railway (or semi-high-speed railway), (2) creation of development profit and a significant increase in income from non-railway projects by collaboration with local private investors who are land owners along the railway line and stations. (2) Current situation of the project site The project site is located in the eastern part of Thailand, spanning across Chachoengsao and Chon Buri provinces on the eastern coast of Gulf of Thailand in the east and the southeast of the capital Bangkok. In this region, areas with a slightly high altitude are distributed, but in general, plains are spreading. The Chonburi, the Si Racha industrial area and the Laem Chabang industrial area are located along the Highway No. 7, over which the project route is planned to be constructed. Pattaya which will be the southern end of the planned railway line is an internationally famous tourism spot. (3) Natural environment in the planned area 1) Weather The climate of Thailand is dominated by monsoons. Southwest monsoon begins in May, carrying moist warm air from the Indian Ocean which causes rainfall to the entire country. The Northeast monsoon begins in October carrying cold dry air from Mainland China. The climate of Thailand is influenced by the above monsoons, and is divided into three seasons as listed below. Rainy season or southwest monsoon season (Mid-May to mid-october) Winter season or northeast monsoon season (Mid-October to mid-february) Summer or before the monsoon season (Mid-February to mid-may) Table 4-1 and Table 4-2 show monthly average temperature and precipitation, respectively. The average temperature is 28 degrees C. The temperature tends to be high from March to June, and low from November to January. The average annual precipitation for the past 30 years from 1981 to 69

71 2010 is 1,888mm, and rainfall concentrates from July to September. Table 4-1:Eastern Thailand Monthly Average Temperature Jan Feb Mar Apr May Jun Jul. Aug Sept Oct Nov Dec Annual average Source: Climatological Center, Metrological Development Bureau Table 4-2:Eastern Thailand Monthly Average Precipitation Jan Feb Mar Apr May Jun Jul. Aug Sept Oct Nov Dec Annual average Source: Climatological Center, Metrological Development Bureau 2) Topography / Geology The planned railway route is located on the east side of the Gulf of Thailand. The area around the planned route is almost flat in general, although there are slight differences in elevation between Si Racha Station and Pattaya Station. 3) Hydrometeor There are large and small rivers crossing the planned route. Of those rivers, the Bang Pakong River in Chachoengsao is the largest river in width. The rest of the rivers are medium and small in size. 4) Environmental Reserve a. Environmental protection area Zoning of environmental protection areas has been implemented on land and waters around Pattaya in accordance with the Notification (2010) concerning environmental protection zoning and countermeasures in Banglamung District and Sattahip District issued by the Ministry of Natural Resources and Environment (MNRE). Zones are classified into two, i.e., Zone 1 for land area and Zone 2 for waters including sea. The zones indicated in this Notification are shown in the figure. In Zone 1, construction, repair and change of functions of the buildings are prohibited. It should be noted that constructions and renovations related to railway are not listed in this Notification. 70

72 Source:MNRE Notification regarding Environmental Protection and Measures in Banglamung District and Sattahip District of Chon Buri Province, 2010 Figure 4-1:Environment Protection Zone and Project Location in Banglamung and Sattahip District b. Bang Pakong River Basin The estuary of the Bang Pakong River provides valuable resources for people's living including a coastal ecosystem, food sources, animal egg laying and breeding ground, and is an important marsh at the national level. However, due to human living and use of the resources, the area has faced the deterioration of such a precious and fragile environment. Therefore, the MNRE is currently studying to preserve the area by designating it as a protected area. Zone 2 is located to the east of one of the potential railroad routes. c. Ramsar Wetlands Thailand has signed the Ramsar Convention in September 1998, and a total of 14 areas, 399,714 ha have been registered as Ramsar Wetlands. However, there is no Ramsar site in the eastern part of the Gulf of Thailand where the project site is located. 5) Natural disasters The frequency of cyclone attacks during tropical monsoon over the past 65 years is shown in the table. The frequency of attacks is lower in eastern Thailand where the project is planned, than in other areas. Monthly wise, most of the cyclones are concentrated in October. According to the flooding frequency map issued by the Land Development Department (LDD), flooding did not occur in the project area for the past 10 years. 71

73 Table 4-3: Frequency of tropical cyclone incidents over the past 65 years, Area Jan Feb Mar Apr May Jun Jul. Aug Sept Oct Nov Dec TTL North North east Central East South Source: Climatological Center, Metrological Development Bureau 72

74 Source: Land Development Authority of Thailand Figure 4-2:Flood Prone Area 73

75 The landslide risk map (susceptible area map) of Thailand is shown in the figure. In this map, danger of landslide is classified into 4 levels as shown below, but the distribution of only two levels, i.e., medium and high are shown. According to Figure 4-3, the project site is not included in the middle and high-level landslide-prone areas. No possibility of landslide Low possibility of landslide (Stability index > 1) Medium possibility of landslide (Stability index 0.5 1) High possibility of landslide (Stability index < 0.5) 74

76 Source:Land Development Authority of Thailand Figure 4-3:Land Slide Prone Area Map 75

77 (4) Current Situation of Social Environment 1) Population The populations as at 2000 in Bangkok, Chachoengsao and Chon Buri showed an upward trend against those of The annual growth rates increased slightly, i.e., 0.8%, 1.4% and 2.0%, respectively. The agricultural populations in the respective provinces showed a downward trend. Table 4-4: Total population and agricultural population Total Population ( 000) Agricultural population (%) Year Annual Growth Rate (%) Bangkok 5, , Chachoeng Sao Chon Buri , Sources: National Statistical Office, Thailand 2) Land use According to the current situation of land usage map in the eastern region in 2010, the project site is covered almost by agricultural land except for the urban and build-up areas in Pattaya and its vicinity. New Chachoengsao Si Racha Pattaya Source:Land Development Authority of Thailand Figure 4-4:Current Land Use in Eastern Thailand (2010) 4.2 Potential Environmental Improvement As for the potential environmental improvement following the implementation of this Project, carbon dioxide emitted by vehicles using the motorway is expected to be reduced as a result of decrease in the number of car users and bus passengers that use the Motorway No. 7 between Bangkok and Pattaya, as they will use the planned railway once it is completed. 76

78 4.3 Potential Environmental and Social Impacts Potential environmental and social impacts of this Project are shown below. Project activities that are assumed to have impact on the environment are extracted based on the local situations, by referring to the checklist (railroad) of JICA Environmental and Social Consideration Guidelines (October 2010) for environment assessment. The project activities are divided into three phrases as listed below to assess both positive and negative impacts assumed. Before construction During construction After construction (1) Project activities subjected to environmental assessment Project activities that are subjected to environmental and social impact assessment are the construction and operation of the planned commuter line between Suvarnabumi Airport and Pattaya in Bangkok. The planned route is shown in Figure 4-5. The route is planned to be mostly elevated railways over the existing Motorway 7. The total length of the route is 116 km, and plans to place 3 stations between Survarnabhumi station and Pattaya station, namely, in Chachoengsao, Chonburi, and Si Racha. The station buildings that are subjected to the environmental assessment are listed below. Suvarnabhumi Airport Station Chonburi Station Si Racha Station Pattaya Station. The outline of the construction of railway and station buildings is shown in Table 4-5 and Figure 4-6. Elevated railway structures will be constructed over the highway. The basic cross-sectional view of a railway structure is shown in Figure 4-7. Table 4-5:Overview of the Project Route Suvarnabhumi Station Pattaya Station Length/Stations 116 km, 5 stations including the existing Survarnabhumi Airport Station Structure All elevated Source:The Study Team 77

79 Figure 4-5:Planned Railway Alignment Figure 4-6:Typical Cross Section of Station 78

80 Figure 4-7:Cross Section of Planned Railway (2) Potential Impact on the environment and society Project activities subjected to the environment and society impact assessment are listed below. Elevated track structures and operation of trains Station buildings (including upgrading) Suvarnabhumi Airport Station Chachoengsao Station Chonburi Station Si Racha Station Pattaya Station 1) Major factors of impact Potential factors that are assumed to affect the environment at each stage are as follows. Based on these environmental factors, potential impact will be assessed. Before construction : Land acquisition, construction of site offices, site preparation, delivery of heavy machinery for construction, etc. Under construction : Demolition of existing structures, construction work, equipment installation etc. After construction : Train operations, station operations, equipment maintenance, etc. 2) Potential environmental and social impacts Table 4-2 shows the environmental impact matrix that analyzes the potential impact on environment and society, while Table 4-3 shows the environmental checklist (railway) of the JICA Environmental and Social Consideration Guidelines (2010). Upon analyzing potential impact, the secondary materials and the field survey results were referred to. 79

81 a) Elevated tracks Before construction Tracks will be constructed mostly as an elevated structure over the existing highway (Motorway No. 7). At present, an acquisition of large land is not assumed, so that relocation of residents will not be required. Exhaust gas, noise and vibration pollution will occur along the road leading to the site due to the delivery of heavy machinery into the site, although for a short period. Further, traffic congestion may occur in some areas for a while. This may occur between Suvarnabhumi Airport station where commercial and residential areas are distributed, but the level of which may be negligible. The level of the impact in other sections may be minor as they are located in low-density residential areas. Around Khao Din in Cha Tung Sao (Fig. 4-8), high-voltage cables are running across the highway. If the height of the high voltage cables is low, it causes disturbance to the construction works, then, replacement of the high voltage cables becomes necessary. Figure 4-8:Situation and location of the high voltage cables across the existing highway During construction As for the impact during construction, the levels of emission of exhaust gas, noise, and vibration are expected to elevate due to the operation of heavy machinery and driving of construction vehicles in and out of the site. Dust pollution, particularly during dry seasons, may occur. A significant level of disturbance may occur to vehicles using the highway due to the occupancy and construction work on the existing highway. Also, rear-end collision accidents are likely to occur due to a sudden speed reduction of vehicles driving close to the construction site. For the reason, it is necessary to study construction time, construction hours, and traffic control methods and so on. There are a number of elevated bridges for vehicles and pedestrian bridges over the existing highway (Fig. 4-9). Whether or not an elevated track can be constructed over the highway or the existing elevated bridge or pedestrian bridge needs to be rebuilt will become a topic to be studied moving forward. In either case, those existing elevated bridges need to be closed off, which may cause a regional division during construction. 80

82 Figure 4-9:Elevated bridges for vehicles and pedestrian bridges During operation Once train services of the planned commuter line began, people may choose to use the railway instead of own cars or buses. Reduction of exhaust gas, etc. can be expected as a result of a reduction in highway traffic volume following the change of mode of travel from car and bus to train. This contributes to the reduction of global warming gas, and can be served as a measure against climate change. Further, the railroad accident ratio to all the traffic accidents is lower than the road accident ratio. For the reason, it is also expected to reduce the number of casualties and injuries attributable to traffic accidents. A decrease in expressway traffic as described above will lead to a reduction in noise and vibration levels around the areas along the road. On the other hand, the levels of noise and vibration caused by trains may increase around the areas along the railway tracks. Therefore, future assumption and study of noise and vibration levels are necessary. The planned elevated structures will change the current landscape. As for the potential impact on other infrastructures attributable to the planned elevated structures, railway power lines and train operation, the potential impact on radio interference is unknown. Thus, future study is necessary. Elevated tracks will be constructed, but they will cause no regional division, as they will be built over the existing highway. b) Station buildings Before construction Suvarnabhumi Airport station will require renovation work to the existing station buildings. Exhaust gas, noise, vibration and traffic volume around the access road to the site will increase for a short period of time caused by delivery of heavy machinery into the site that is to be used for station building construction. The impact is presumed to be greater in stations that are located in an urban district where commercial and residential areas are distributed, compared with other stations. At other stations, the impact is assumed to be minor as the population density in those areas is low. Chonburi station is planned to be built to the east side of the highway where the wetlands spread around the area. The wetlands will decrease due to an acquisition of land to build a station building (Fig. 4-10). Future study is necessary. This wetland zone may have been a habitat for birds and aquatic organisms. In this regard, an environmental assessment is necessary by conducting an ecological study in the future. 81

83 Figure 4-10:Wetland area where Choburi Station is planned During construction As for the potential impact during construction, emission of exhaust gas, noise and vibration levels are expected to increase due to the operation of heavy machinery and construction vehicles that deliver construction materials. Suvarnabumi Airport Station will require renovation or expansion of the existing station buildings, which generates construction waste from the demolition of part of existing station buildings. For the reason, appropriate disposal sites need to be provided. Further, the levels of exhaust gas emission, noise and vibration in the areas along the roads, generated by trucks that transport construction waste materials are expected to increase. Particularly, a significant level of dust may be generated due to demolition work, and therefore it is necessary to take measures against dust.. After construction The level of noise and vibration in the vicinity of the stations may increase due to the operation of the planned commuter line. Further, exhaust gas load and traffic congestion may increase due to an increase in buses and cars coming in and going out of the stations, etc. Following the completion of the planned stations and an increase in frequency of train services, movement of people will be promoted and regional economies will be activated, which may bring about positive impact, including the creation of employment. Moreover, an increase in population and improvement of economic situation will make the use of land more sophisticated. An increase in the number of station building users is expected, which causes an increase in electricity and water consumption at the same time an increase in solid waste and sewage water. For the reason, the environmental burden may increase as compared to the present situation 82

84 Table 4-6:Environmental Impact Matrix 83

85 (JICA Environment Social Consideration Guideline 2010, Railway) Catego ry 1 Permits and Explanation 2 Mitigation Measures Environmental Item (1) EIA and Environmental Permits (2) Explanation to the Public (3) Examination of Alternatives (1) Water Quality (2) Waste (3) Noise and Vibration (4) Subsidence Environmental Item Table 4-7:Environmental Checklist (a) Have EIA reports been officially completed? (b) Have EIA reports been approved by authorities of the host country s government? (c) Have EIA reports been unconditionally approved? If conditions are imposed on the approval of EIA reports, are the conditions satisfied? (d) In addition to the above approvals, have other required environmental permits been obtained from the appropriate regulatory authorities of the host country s government? (a) Are contents of the project and the potential impacts adequately explained to the public based on appropriate procedures, including information disclosure? Is understanding obtained from the public? (b) Are proper responses made to comments from the public and regulatory authorities? (a) Have alternative plans of the project been examined with social and environmental considerations? (a) Is there a possibility that soil runoff from the bare lands resulting from earthmoving activities, such as cutting and filling will cause water quality degradation in downstream water areas? (b) Do effluents from various facilities, such as stations and parking areas/service areas comply with the country s effluent standards and ambient water quality standards? Is there a possibility that the effluents will cause areas that do not comply with the country s ambient water quality standards? (a) Are wastes generated from station or rail yard properly treated and disposed in accordance with the country s regulations? (a) Do noise and vibrations from vehicle and train traffic comply with the country s standards? (a) In the case of extraction of a large volume of groundwater, is there a possibility that the extraction of groundwater will cause subsidence (especially in case of subway)? 84 Yes: Y No: N (a) N (b) N (c)? (d)? (a) N (b) N (a) N (a) N (b) N (a) Y (a) Y (a) N Main Check Items (Reason, mitigation measures) (a) Preparation of EIA report will be required in the next stage. (b) Approval of EIA report shall be obtained from MNRE in the next stage. (c) Required to have discussion with MNRE after the project content is finalized. (d) No permission regarding environment is required other than EIA. (a) (b) Explanation to the public and proper responses shall be provided in the next stage. (a) Alternatives will be examined in the next stage. (a) Construction involving cutting and filling of soils is not expected as railway will be an elevated structure. (b) Station building and switch yard includes water treatment facilities which complies with the country s the effluent standards. (a) Adequate waste collection and disposal will be implemented. (a) Soundproofing measures will be employed, as necessary, based on the railway operation plan. (a) A large volume of groundwater use is not planned.

86 (1) Protected Areas (a) Is the project site located in protected areas designated by the country s laws or international treaties and conventions? Is there a possibility that the project will affect the protected areas? (a) N (a) No protected area is located at the site as the railway is planned to be built above the existing highway. 3 Natural Environment (2) Ecosystem (3) Hydrology (4) Topography and Geology (a) Does the project site encompass primeval forests, tropical rain forests, ecologically valuable habitats (e.g., coral reefs, mangroves, or tidal flats)? (b) Does the project site encompass the protected habitats of endangered species designated by the country s laws or international treaties and conventions? (c) If significant ecological impacts are anticipated, are adequate protection measures taken to reduce the impacts on the ecosystem? (d) Are adequate protection measures taken to prevent impacts, such as disruption of migration routes, habitat fragmentation, and traffic accident of wildlife and livestock? (e) Is there a possibility that installation of roads will cause impacts, such as destruction of forest, poaching, desertification, reduction in wetland areas, and disturbance of ecosystems due to introduction of exotic (non-native invasive) species and pests? Are adequate measures for preventing such impacts considered? (f) In cases where the project site is located at undeveloped areas, is there a possibility that the new development will result in extensive loss of natural environments? (a) Is there a possibility that alteration of topographic features and installation of structures, such as tunnels will adversely affect surface water and groundwater flows? (a) Is there a soft ground on the route that may cause slope failures or landslides? Are adequate measures considered to prevent slope failures or landslides, where needed? (b) Is there a possibility that civil works, such as cutting and filling will cause slope failures or landslides? Are adequate measures considered to prevent slope failures or landslides? (c) Is there a possibility that soil runoff will result from cut and fill areas, waste soil disposal sites, and borrow sites? Are adequate measures taken to prevent soil runoff? (a) N (b) N (c) - (d) - (e) N (f) - (a) N (a) N (b) N (c) N (a) No ecologically valuable habitats including primeval forests are identified around the project site. (b) Since the area around Chonburi station is wetland, the possible existence of migratory birds shall be confirmed. No habitats of rare species are expected in other sites. (c) If any impacts on migratory birds were expected around Chonburi, adequate measures will be considered. (d) Planned alignment does not disturb migration routes of wildlife. (e) Impact on the wetland around Chonburi station shall be considered. If any possible impacts are expected, adequate measures will be considered, as necessary. (f) Planned alignment is not undeveloped areas. (a) Construction work which involves alteration of topographic features is not planned. (a) No slope failures nor landslides are expected as the railway is planned above the existing highway. (b) Construction work will not involve cutting and filling of soil. (c) Topographic and geological features along the planned alignment are not likely to cause soil runoff. 85

87 4 Social Environment (1) Resettlement (2) Living and Livelihood (a) Is involuntary resettlement caused by project implementation? If involuntary resettlement is caused, are efforts made to minimize the impacts caused by the resettlement? (b) Is adequate explanation on compensation and resettlement assistance given to affected people prior to resettlement? (c) Is the resettlement plan, including compensation with full replacement costs, restoration of livelihoods and living standards developed based on socioeconomic studies on resettlement? (d) Is the compensation going to be paid prior to the resettlement? (e) Is the compensation policies prepared in document? (f) Does the resettlement plan pay particular attention to vulnerable groups or people, including women, children, the elderly, people below the poverty line, ethnic minorities, and indigenous peoples? (g) Are agreements with the affected people obtained prior to resettlement? (h) Is the organizational framework established to properly implement resettlement? Are the capacity and budget secured to implement the plan? (i) Are any plans developed to monitor the impacts of resettlement? (j) Is the grievance redress mechanism established? (a) Where railways are newly installed, is there a possibility that the project will affect the existing means of transportation and the associated workers? Is there a possibility that the project will cause significant impacts, such as extensive alteration of existing land uses, changes in sources of livelihood, or unemployment? Are adequate measures considered for preventing these impacts? (b) Is there a possibility that the project will adversely affect the living conditions of inhabitants other than the affected inhabitants? Are adequate measures considered to reduce the impacts, if necessary? (c) Is there a possibility that diseases, including communicable diseases, such as HIV will be introduced due to immigration of workers associated with the project? Are adequate considerations given to public health, if necessary? (d) Is there a possibility that the project will adversely affect road traffic in the surrounding areas (e.g., by causing increases in traffic (a) N (b) - (c) - (d) - (e) - (f) - (g) - (h) - (i) - (j) - (a) N (b) N (c) Y (d) Y (e) N (f)? (a)(b)(c)(d)(e)(f)(g)(h)(i)(j) With existing plan, the project will not cause resettlement. Appropriate measurements shall be taken if resettlement is required. (a) Transportation methods of local residents will be diversified. People are able to move without having private cars. Area around the station will be developed so there will be improvement of convenience and increase of employment. No change in livelihood means an impact on unemployment is not expected. (b) No impact is expected other than the affected inhabitants (c) There is a possibility of communicable diseases due to population increase around the station. However considering the high level of public health in Thailand, the impact will not be significant. (d) There is a possibility that the project will adversely affect road traffic during construction. During operation, road traffic and accidents are expected to decrease since the traffic volume of the highway decreases. (e) The convenience of the movement inhabitants will improve. (f) Elevated structure will be constructed over the existing 86

88 4 Social Environment 5 Others (3) Heritage (4) Landscape (5) Ethnic Minorities and Indigenous Peoples (6) Working Conditions (1) Impacts during Construction congestion and traffic accidents)? (e) Is there a possibility that roads and railways will cause impede the movement of inhabitants? (f) Is there a possibility that structures associated with railways will cause a sun shading and radio interference? 1 Is there a possibility that the project will damage the local archeological, historical, cultural, and religious heritage sites? Are adequate measures considered to protect these sites in accordance with the country s laws? 1 Is there a possibility that the project will adversely affect the local landscape? Are necessary measures taken? 1 Where ethnic minorities and indigenous peoples are living in the rights-of-way, are considerations given to reduce the impacts on culture and lifestyle of ethnic minorities and indigenous peoples? 2 Does the project comply with the country s laws for rights of ethnic minorities and indigenous peoples? (a) Is the project proponent not violating any laws and ordinances associated with the working conditions of the country which the project proponent should observe in the project? (b) Are tangible safety considerations in place for individuals involved in the project, such as the installation of safety equipment which prevents industrial accidents, and management of hazardous materials? (c) Are intangible measures being planned and implemented for individuals involved in the project, such as the establishment of a safety and health program, and safety training (including traffic safety and public health) for workers etc.? (d) Are appropriate measures taken to ensure that security guards involved in the project not to violate safety of other individuals involved, or local residents? (a) Are adequate measures considered to reduce impacts during construction (e.g., noise, vibrations, turbid water, dust, exhaust gases, and wastes)? (b) If construction activities adversely affect the natural environment (ecosystem), are adequate measures considered to reduce impacts? (a) N (a) Y (a) N (b) N (a) Y (b) Y (c) Y (d) Y (a) Y (b) N (c) N (d) Y highway and since sufficient space is secured on the shoulder of the highway sunshine prevention will not be expected. Possibility of radio interference due to the movement of vehicles needs further study. (a) No archeological, historical, cultural, and religious heritage site is located along the planned alignment. (a) There will be a change in landscape due to elevate structure. So necessary measures shall be considered. (a)(b) No ethnic minorities and indigenous peoples are living around planned alignment. (a) Working environment shall comply with relevant laws and regulations in Thailand. (b) Adequate measures will be taken to avoid work related accidents. (c) Safety and health program will be prepared and safety training will be provided to workers. (d) Training to security guards will be carried out. (a) Noise, vibrations, turbid water, dust, exhaust gases from construction vehicles and transportation of heavy equipment and construction wastes will be generated. Adequate measures will be considered, as necessary according to laws and regulation of Thailand. (b) Proposed alignment goes through industrial, commercial and 87

89 5 Others 6 Note (2) Monitoring Reference to Checklist of Other Sectors Note on Using Environmental Checklist (c) If construction activities adversely affect the social environment, are adequate measures considered to reduce impacts? (d) If necessary, is health and safety education (e.g., traffic safety, public health) provided for project personnel, including workers? (a) Does the proponent develop and implement monitoring program for the environmental items that are considered to have potential impacts? (b) Are the items, methods and frequencies included in the monitoring program judged to be appropriate? (c) Does the proponent establish an adequate monitoring framework (organization, personnel, equipment, and adequate budget to sustain the monitoring framework)? (d) Are any regulatory requirements pertaining to the monitoring report system identified, such as the format and frequency of reports from the proponent to the regulatory authorities? (a) Where necessary, pertinent items described in the Forestry Projects checklist should also be checked (e.g., projects including large areas of deforestation). (b) Where necessary, pertinent items described in the Power Transmission and Distribution Lines checklist should also be checked (e.g., projects including installation of power transmission lines and/or electric distribution facilities) (a) If necessary, the impacts to transboundary or global issues should be confirmed, if necessary (e.g., the project includes factors that may cause problems, such as transboundary waste treatment, acid rain, destruction of the ozone layer, or global warming). (a) Y (b) - (c) Y (d) Y (a) N (b)? (a) N residential area. So no impact is expected to ecologically valuable habitats. (c) No significant impact on the social environment is expected from construction activities. (d) Traffic is expected in existing highway and around the proposed alignment so adequate measures shall be taken to mitigate the impact. (a) (b) Identify environmental items that are considered to have potential impacts during construction and operation stage and prepare appropriate monitoring plan and implement based on the plan. (c) Monitoring framework will be established based on monitoring plan which will be prepared in discussion with MNRE. (d) Monitoring report system will be identified after having discussion with in discussion with MNRE and it will be implemented. (a) Large scale deforestation is not expected. (b) After confirming possible impact on Power Transmission and Distribution Lines, checklist will be prepared as necessary. (a) Due to the operation of the railway, the traffic volume of the highway decreases and the emission of the global warming gas decreases. No other global level environment issues are expected. (Source: JICA guidelines for environmental and social considerations, 2010 Railway ) 1) Regarding the term Country's Standards mentioned in the above table, in the event that environmental standards in the country where the project is located diverge significantly from international standards, appropriate environmental considerations are required to be made. In cases where local environmental regulations are yet to be established in some areas, considerations should be made based on comparisons with appropriate standards of other countries (including Japan's experience). 2) Environmental checklist provides general environmental items to be checked. It may be necessary to add or delete an item taking into account the characteristics of the project and the particular circumstances of the country and locality in which it is located 88

90 4.4 Related Regulations and Approval Process for Environmental and Social Considerations Legal Basis of EIA The environmental impact assessment in Thailand is regulated under Chapter 3, section 4, paragraph 46, in the National Enhancement and Conservation of National Environmental Quality Act, Based on this act, projects which require EIA, approval processes are stipulated in detailed notifications and rules Project requires EIA Projects which require EIA is regulated by the notification of MNRE Types and size of projects which require EIA and preparation process of EIA Report preparation (2012). There are 35 types of project required EIA under this notification. Railway projects require an EIA for the project scale of All size ; therefore this project also requires an EIA. Table 4-8 shows projects which require an EIA. Table 4-8:Criteria of Projects for EIA Study No. Item Type Project Scale 1) Mining defined by Mineral Act All sizes 2) Petroleum Industry All sizes 3) Petroleum and Fuel Pipeline System Project All sizes 4) Industrial Estate as defined by the Industrial Estate Authority or Thailand Act or Projects with identical feature All sizes or Land Allocation Project for industrial development 5) Petrochemical Industry using chemical process in production Productivity is 100 tons / day or more 6) Petroleum Refining Industry All sizes 7) Natural Gas Separation Industry or Natural Gas Reforming All sizes 8) Industry Chlor-alkaline Industry that required Sodium Chloride as raw material to produce Sodium Carbonate, Sodium Hydroxide, Hydrochloric Acid, Chlorine, Sodium Hypo- Chloride and Bleaching powder 89 Productivity each or total products are 100 tons / day or more 9) Cement Industry All sizes 10) Pulp Industry Productivity is 50 tons / day or more 11) Pesticide Industry or Industry producing active ingredient by chemical process All sizes 12) Chemical Fertilizer Industry using chemical process All sizes 13) Sugar Industry All sizes 14) Iron or Steel Industry Productivity is 100 tons / day or more 15) Mineral Smelting Industry, Mineral Dressing Industry or Metal Melting Industry except Iron or Steel Productivity is 50 tons / day or more 16) Liquor and Alcohol Industries including beer and wine Liquor and Alcohol:Productivity is 40,000 liter / month or more (calculated at 28 degrees) Wine and Beer:Productivity is 600,000 liter / month or more 17) Central Waste Treatment Plant defined by the Factory Act All sizes 18) Thermal Power Plant Productivity to electricity is 10 MW or more 19) Expressway as defined by the Expressway and rapid Transit Authority of Thailand Act or other projects alike All sizes 20) Highway or road which defined by Highway Act, passing through the following areas: All sizes 21) Rail-Type Mass Transit System (Route public transport industry) All sizes 22) Port With capacity of vessels for 500 gross tons or more or with the total length of the front port is 100 meters or more or with the total port area is 1,000 square meter more 23) Recreational Port With capacity of 50 vessels or more 24) Land Reclamation All sizes

91 Construction or Expansion of Structures close to or in the Seawall next to coastline: The total length is 25) sea 200 meters or more, Other: All sizes 26) Aviation Transportation System The runway length is 200 meters or more Building which defined by the Building Control Act that With 23 meter height or more or the total has location or building utilization as follow floor area or individual area in the same 27) building is equal to 10,000 square meters or 28) 29) 30) 31) 32) 33) 34) mere 500 plots of land or more or total allocated area is more than 100 Rai (16 hectares) Land Allocation for residential or commercial purposes which defined by the Land Allocation Act Hospital or Nursing Homes that defined by the Medical Total 30 in-patient s bed or more Services Act located in the following area: Hotel or Resort which defined by the Hotel Act Total 80 or more total utilization area is 4,000 square or more Residential Building which defined by the Building With 80 room or more or total utilization area Control Act is 4,000 square or more Irrigation Irrigation area of 80,000 Rai (12,800 hectares) or more All project located in the areas classified as Class 1 Total 80 or more total utilization area is 4,000 watershed area by the cabinet resolution square or more Diversion of more than river basin of the specified requirements 35) Major rivers of the weir Source: Ministry of Natural Resources and Environment Types and size of projects which require EIA and preparation process of EIA Report preparation (2012) Process of EIA Based on the interview with Office of Natural Resources and Environmental Policy and Planning (ONEP) under Ministry of Natural Resources and Environment, there are four deferent approval process for EIA report which depend on project proponent. Case 1: Projects or activities which are required by law and projects or activities which are not required the approval of the cabinet Case 2: Projects or activities required the approval of the cabinet Case 3: Projects or activities which may seriously affect community which respect to Environment. Natural Resources and Health and are required permission by law and projects or activities are not required the approval of the cabinet Case 4: Projects or activities which may seriously affect community which respect to Environment. Natural Resources and Health and required the approval of the cabinet The target project meets Case 4 so that the following process is followed for EIA approval. The project proponent submitted the Environmental Impact Assessment Report (EIA Report) to the Expert Review Committee (ERC) during the feasibility study phase. ERC reviews EIA report and submit comments to National Environment Board (NEB) through ONEP. The evaluation result of NEB will be sent to the cabinet where the final decisions of approval or non-approval are made. 90

92 Figure 4-11:Approval process for the projects by the government and public company Components of an EIA Report EIA reports shall consist of the following contents. Summary report Type and size of the Project Project location Comparison of alternatives Negative impacts on environment, mitigation measures and inspection Main report Introduction Project location Project content Existing conditions of environment Comparison and Evaluation of alternatives Environmental impact mitigation measures (compensation plan, as necessary) Environmental monitoring and review program Participation of stakeholders, social impact assessment, health risk evaluation 91

93 Chapter 5 Economic and Financial Feasibility 5.1 Project Cost Estimate This section indicates the result of project cost estimate as the basis for financial and economic analysis Project Cost (1) Total Investment Cost The construction cost for viaduct refers to the result of the HSR Eastern Line, having standard pier spans of 25m. Also, recent elevated urban railway projects in Bangkok were referred in determination of unit cost. Costs of E&M systems and rolling stock also were based on the records of urban railways in Bangkok. The project cost consists of the construction cost including civil and architectural works, procurement of E&M systems and rolling stock, and the other costs including contingencies, land acquisition, taxes and duties, etc. The project cost in local currency and Japanese Yen is summarized in the following table. The team aimed to fairly compare the project cost to the cost of HSR Eastern Line. Therefore, references were made to the HSR Eastern Line as appropriate. The cost of the project is JPY 307 billion for construction of infrastructure between Suvarnabhumi Airport and Pattaya, procurement of E&M systems and rolling stock, land acquisition, etc. Table 5-1:Total Investment Cost Unit Quantity Unit Cost Amount Amount (THB Mil.) (THB Mil.) (JPY Mil.) 7. Civil Works 50, , General Requirement Set 1 1,731 1,731 5, Viaduct (Box) km , , Viaduct (Portal Frame) km ,324 5,788 18, At Grade Structure km Elevated Station Station 3 1,468 4,403 14, At Grade Station Station 1 1,045 1,045 3, Lifts & Escalators Station , Access Road Set 1 1,652 1,652 5, Depot Civil Works Set 1 3,151 3,151 10, Railway Systems 30, , Signaling System Km ,502 4, Platform Screens Station Maintenance Equipment Set 1 1,142 1,142 3, AFC System Station Communication System Km ,637 11, Power Supply System Km ,772 22, Trackwork Km ,592 38, Other Systems Set 1 2, , Rolling Stock Car ,100 16, Contingency Set 3,272 10, Consultancy Fee Set 3,310 10, Taxes and Duties Set 6,077 19, Land Acquisition Set Total 93, ,805 Source: Study Team 92

94 (2) Land Acquisition Cost The following table shows the land acquisition cost. Unit cost for land acquisition was set based on the result of HSR Eastern Line. The estimated cost of land acquisition is THB 238 million or JPY 780 million. The amount of land acquisition may be reduced in the detailed design stage. Table 5-2:Land Acquisition Cost Chainage Land Area Unit Cost Amount (sqm) (THB/sqm) (THB Mil.) ,750 4, ,160 2, , , , , ,910 3, , Source: Study Team (3) Comparison to HSR Eastern Line In comparison with the HSR Eastern Line, the project cost is less for the following reasons. Both projects proposed the same unit cost as the civil works of HS commuter is compatible with HSR at the maximum speed of 250 km/h. Therefore, the cost reduction is from the shorter route length by about 10km. The cost reduction for system procurement is from the difference in rolling stock technology, i.e. commuter railway and HSR system. The total difference is THB 16 billion or JPY 53.5 billion, which has the impact of saving 15% from the HSR Eastern Line. Table 5-3:Comparison of Project Cost HS Commuter HSR Eastern Line Amount (THB Mil.) Amount (THB Mil.) Civil Works 50,219 57,032 Railway Systems 30,727 35,248 Contingency 3,272 3,730 Consultancy Fee 3,310 3,774 Taxes and Duties 6,077 6,928 Land Acquisition 238 3,460 Total 93, ,172 Cost per kilometer Difference (Ratio) -16,329 (85.1) (100) Source: Study Team Operation and Maintenance Cost The O&M cost was estimated as follows. The cost does not include the expense for operations inside the ARL. (1) Personnel Cost The staffing strength of each department was assumed as follows. Train Operation: 6 persons / train x 12 = 72 (one man operation) Station Service: 15 persons/ station = 75 (including the persons at Suvarnabhumi Airport) Engineering : 1.2 persons / km x 115.7km x 2 = 78 Electrical : 1.4 persons / km x 115.7km x 2=324 Rolling Stock : 0.6 persons / car x 36=22 93

95 As above, the total staff number for site works is 771 persons. The staffing strength of the headquarters was assumed as follows. Corporate Management: President, Business Administration, Engineering & Operations : 3 Department Manager: General Admin., Planning, Sales, Traffic, Engineering, Electric, Rolling Stock : 7 Officer: General Admin., Planning, Sales, 5 persons / department = 15 As above, the total staffing number for the headquarters is 25 persons. Unit cost for headquarter personnel referred to the actual wage condition by position in Thailand. (2) Energy Cost The energy consumption referred to the actual expense of Japanese railway operators. 15,817MWh / 5,974k car km=2.65kwh/car km 19,000 train km x 3 cars x 365=20,800k,000 car km Traction: 2.65 x 20800,000=55,100MWh 55,100MWh x 1.3 (Auxiliary)=71,600MWh/year Unit cost of electricity was set as JPY 12/kwh according to the actual cost in Thailand. (3) Consumables and Spares With reference to the Japanese railway companies, consumables and spares cost was estimated as follows. Trackwork: JPY 11.9 million x 115.7km=JPY 1,377 million Station : JPY 9.1 million x 4 stations=jpy 364 million Electricity : JPY 6.58 million x 115.7km=JPY 761 million Rolling Stock: JPY 1.70 million x 36cars=JPY 61 million Train operation: JPY 2.67 million x 115.7km=JPY 309 million Passenger Service JPY 25.9 million x 5 stations=jpy 129 million (4) Total Total O&M cost for the first year was estimated as THB 1.58 billion or JPY 5.2 billion. Table 5-4:O&M Cost Components of O&M Cost (first year) Personnel: THB 411 Mil. (JPY 1.34 Bil.) Energy: THB 262 Mil. (JPY 0.86 Bil.) Consumables and Spares: THB 915 Mil. (JPY 3.0 Bil.) Total: THB 1,588 Mil. (JPY 5.2 Bil.) Growth of O&M Cost for succeeding years 2% increase per year Source: Study Team Replacement and Reinvestment The following assumptions ware made for the estimate of replacement and reinvestment cost. 94

96 (1) Replacement Cost The replacement cost was assumed to be 10% of the procurement cost of E&M systems in 2036, 2038, 2041 (15, 17, 20 years after start of commercial operation, respectively). (2) Reinvestment Cost The reinvestment cost is for the procurement of additional 15 cars in 2035 as per the train operation plan. 5.2 Revenue Estimate This section indicates the result of revenue and non-fare revenue estimates Fare Revenue (1) Fare Level The team set out the following fare policies: Maintain the fare level affordable to ordinary users, while securing appropriate amount of fare revenue, according to the result of elasticity analysis. Keep fare competitiveness with the existing express bus operated between Suvarnabhumi Airport and Pattaya. The following cases of fare levels were considered. Base fare is THB 50. Distance fare is a choice of THB 1.5/km, 2.0/km, 2.5/km, and 3.0/km. The following graph shows the elasticity of ridership and fare revenue at different fare levels. Ridership drops remarkably with an increase in fares, while fare revenue continues to grow as fares increase. The growth of fare revenue is, however, not large. Therefore, the team selected the fare level comparable to the existing express bus service, i.e. Base fare THB 50 + Distance Fare 2.0/km. Source: Study Team Figure 5-1:Elasticity of Ridership by Fare Level 95

97 Source: Study Team Figure 5-2:Elasticity of Fare Revenue by Fare Level The fare simulation according to the fare structure of THB 50 + Distance Fare 2.0/km is summarized as follows. Although the fare becomes more expensive than the existing bus service, passengers willingness to pay should be higher as the travel time will be reduced significantly. Table 5-5:Fare Simulation Fare Travel Time Suvarnabhumi - Pattaya (Baht) (Min) HS Commuter Source: Study Team Non-Fare Revenue Express Bus Non-fare revenue is estimated as 1,759257,000 USD from the TOD development in three stations. Breakdown is given in Cost Estimate. Table 5-6:Non-Fare Revenue Name of Station Land Area (sqm) Revenue from land sales (USD) New Chachoengsao 1,189, ,291,000 New Chonburi 3,416,000 1,222,860,000 New Siracha 266, ,106,000 Total 4,872,300 1,759,257,000 Source: Study Team 5.3 Preliminary Economic Analysis This section confirms feasibility of the project execution plan from the economic perspective. In particular, economic feasibility of the project is evaluated with economical internal rate of return (FIRR) and net present value (NPV). 96

98 5.3.1 Assumptions (1) Project Period The project period is set to 30 plus 4 years of construction period in consideration of standard criteria of Thailand and facility lifetime. (2) Exchange Rate The exchange rates are set as below, in accordance with the tentative JICA Yen loan evaluation criteria for Thailand in FY2016. USD/JPY 1 USD = JPY USD/THB 1 USD = THB THB/JPY 1 THB = 3.28 JPY (3) Without Case The Without Case as the base case of this economic assessment is defined as the case without the HSR project where only the current transportation system remains to be available. (4) Social Discount Rate In accordance with the national standard in Thailand and the criteria used for other similar projects, the social discount rate is set to be 12% Cost The economic price without VAT and custom duties is used as the cost of project. The shadow price index between financial cost and economic costs are set to be 0.92 for detailed design services, 0.92 for compensation for acquisition of establishments, 1.00 for land acquisition cost, 0.88 for construction cost, 0.92 for construction supervision services Benefit Factors considered to be the benefits attributable to the project are: 1) as direct benefits, travel time savings, travel cost savings, environmental cost savings, and 2) as indirect benefits, employment generations. Also, 3) supplier s benefit of fare revenue is considered. Below are the specific values set. (1) Travel Time Saving The benefit is defined to be the difference between the travel time for HSR users and that for users in Without Case multiplied by the value of time. The value of time is THB 75.0/hour (FY2016 standard) which is based upon the result of traffic demand forecast. (2) Travel Cost Saving For users who switch from automobiles to HSR the benefit of reduced car use cost is taken into account. A passenger car cost of THB 5.71/vehicle-km is used as the basic unit for the calculation based upon the result of traffic demand forecast. (3) Environmental Cost Saving Benefit of environmental cost savings is estimated from vehicle kilometer, quantity and unit cost of emission by air pollution and vehicle type. Based upon the past studies in Japan and Thailand quantities and unit costs are set to be: 185g/vehicle-km (automotive) and 22g/ vehicle-km (HSR), THB 2.8/km for CO2 emission, 1.1g/ vehicle-km (automotive) and 0.3g/ vehicle-km (HSR), THB 97

99 22.5/km for NOx emission, and 0.68g/ vehicle-km (automotive) and 0.305g/ vehicle-km (HSR), THB 20.5/km for SOx emission. (4) Supplier Benefit (Fare Revenue) Based on the result of traffic demand forecast the supplier s benefit (fare revenue) is defined to be the sum of the number of HSR users multiplied by the fare amount for each path between zones minus operation and maintenance cost. (5) Employment Benefit Benefit of employment generation is estimated from employment generation factors of HSR during construction and O&M period based upon the results of various studies in overseas and multiplied by year-wise personnel costs Result The result shows that the project EIRR is 12.67% in the base case (with area development and 30 years of operation period), exceeding the social discount rate of 12%. Scenarios for sensitivity tests include the cases of Benefit -20%, Project Cost +20%, and without area development as illustrated in the following table. The result of comparable scenario of the HSR Eastern Line is shown in the same table. (1) Base Case Result of evaluation for the base case is as follows: EIRR = 12.67% NPV = THB 6,470 M. Source: Study Team Figure 5-3:Benefit Component 98

100 Source: Study Team Figure 5-4:Cost-Benefit Transition Economic Cost Table 5-7:Economic Analysis (Base Case) Economic Benefit Year Capital Expenditure Replacement & Reinvestment O&M Cost Reduction in VOC Reduction in TTC Reduction in CO2 Emission Employment Benefit Fare Revenue Benefit Net Economic Benefits , ,847-14, , ,032-22, , ,878-28, , ,393-24, , ,328 4, , , ,355 4, ,046 3, , ,382 5, ,162 3, , ,410 6, ,286 4, , ,438 7, ,418 5, ,467 8, ,560 9, ,496 9, ,711 10, ,526 11, ,872 12, ,557 12, ,044 14, ,588 14, ,227 16, ,619 16, ,423 18, ,652 18, ,631 20, ,685 20,273 1, ,854 22, ,761 1,719 22,209 1, ,090 23, ,648 1,753 24,331 1, ,342 25, ,788 26,655 1, ,611 30, ,648 1,824 29,201 1, ,897 31, ,860 31,990 1, ,201 36, ,897 35,046 1, ,525 39, ,648 1,935 38,393 1, ,870 41, ,240 1,974 42,061 1, ,237 39, ,014 42,061 1, ,197 47, ,054 42,061 1, ,157 47, ,095 42,061 1, ,116 47, ,137 42,061 1, ,074 47, ,179 42,061 1, ,031 47, ,223 42,061 1, ,988 47, ,268 42,061 1, ,943 47, ,313 42,061 1, ,898 46, ,359 42,061 1, ,852 46,824 Source: Study Team EIRR 12.67% NPV (Net) 6,470 99

101 (2) Sensitivity Tests The results of sensitivity tests are summarized as follows. Without area Table 5-8:Sensitivity Tests (Economic) Case HS Commuter SRT HSR EIRR = 10.66% EIRR = % development NPV = THB -13,570 M. NPV = THB - 51,877 M. Cost + 20% EIRR = 10.83% EIRR = 8.63% Benefit 20% EIRR = 10.48% EIRR = 8.38% Source: Study Team 5.4 Preliminary Financial Analysis This section indicates the financial analysis of railway operation business performed by private investment Basic Condition (1) Business Scope Out of the business scope indicated in , the procurement of railway cars and 30 years of operation and maintenance will be the scope of private investment. Replacement and reinvestment cost (5.1.3) which will be expected after the operation will also be included in the private investment portion. Civil work cost other than railway cars and railway train system procurement cost will be financed by Thai government through Yen Loan. Consultancy fee for railway cars, interest rates and financing cost are included in the private investment portion. Item Land acquisition (if any) Civil construction work E&M Systems Rolling Stock (51 cars) Operation Maintenance Source: Study Team Table 5-9:Business Scope Procurement Body Thai Government Thai Government Thai Government Private Investment Private Investment Private Investment (2) Project Period Assumed duration for the procurement of railway cars is three years and the procurement will start in the second year of 4 year-construction period. Duration of the operation and maintenance is assumed as 30 years. (3) Exchange Rate The same exchange rate is used as mentioned in (2) 100

102 (4) Financial Procurement It is assumed that 70% of the project cost will be procured from the private banks as a loan and 30% as equity from both Thai and Japanese investors. (5) Investment Scheme SPV for railway operation and maintenance and SPV for station area development will be formed separately. A part of operation cost for operation and maintenance will be covered by station area development company SPV, the main beneficiary of the railway development. (6) Fare revenue and basic condition Figure 5-5:Investment Scheme The fare revenue was assumed based on the followings. Base fare is THB 50. Distance fare is 2.0 THB/km The number of passengers was assumed by using the demand simulation system approved by Ministry of Transport of Thailand. In 2022, 26,000 passengers In 2032, 47,000 passengers In 2042, 84,000 passengers Result of Analysis and Cash Flow Based on the financial analysis, FIRR was calculated as 18%. The cash flow table is shown below. 101

103 Table 5-10:Cash Flow Table 102

104 Chapter 6 Implementation Schedule 6.1 Project Formulation Schedule As already stated, the team seeks for cabinet approval of the existing proposal of the HSR Eastern Line within the current government. After the cabinet approval or approval of the PPP Council, bidding for PPP operator is expected to start 3 rd quarter in 2017 at the earliest. With this assumption, the team prepared the preliminary project formulation schedule. The team recognizes the necessity of further studies on route alignment, intermodal transfer facilities and depot in the next feasibility study. At the same time, engineering designs must be carried out in cooperation with the local firms so as to proceed to implementation stage immediately after cabinet approval. This service shall produce design drawings and tender documents to meet the schedule of concluding private business operator of the project within Construction Schedule Construction works consists of civil works, trackwork, system installation, integration tests and commissioning, and trial run. Construction of depot should be completed earlier to allow testing of rolling stock and systems, and associated trainings. In terms of construction of elevated structure, intentional schedule can be proposed regardless of the length of works by separation into smaller sections for simultaneous construction. The construction schedule is proposed as follows, taking into account the expectation of the Thai Government, minimum 4 years of construction works including test run, and the necessary period for assessment and approval of the project. Source: Study Team Figure 6-1:Construction Schedule In the meantime if the standard Japanese ODA procedure is strictly followed, JICA preparatory survey must be carried out in 2018 after JICA PPP Study in In this case, the loan agreement between two governments is in March 2019 at the earliest. Taking into account the process of consultant selection, bidding for contractors and 4 years of construction works, the earlier commercial operation should start in In accordance with the direction of the Government of Thailand, the assistance schemes must be selected as appropriate for timely implementation of the project. 103

105 Source: Study Team Figure 6-2:Construction Schedule (as per Standard Japanese ODA Procedure) 6.3 Critical Path The team identified the elements that may be on the critical path in implementation of the project. Project Formulation Stage Approval by the cabinet or PPP council on the project and corridor Receipt of request for cooperation for additional studies from Thai Government and acceptance by Japan side Conduct of additional studies by the consultant and preparation of engineering designs and bid documents Decision on financing sources for public investment portion (including Japanese ODA) Permission for the use of roadside of the National Highway, land acquisition and secure of the right of way Bidding Stage Bid, evaluation, and selection process of private business operator Agree on the terms and conditions of the contract between the executing agency and the private business operator Construction Stage Handover of construction sites and acquisition of construction permit Bid for E&M systems and rolling stock, selection of suppliers Approval of detailed designs by suppliers, procurement and installation System integration tests, commissioning, trial run, and acquisition of operation permit Hiring, skill development and trainings, preparation for commercial operation 104

106 Chapter 7 Implementation Capacity 7.1 Executing Agency (1) Selection of Executing Agency The expected organization to become the executing agency of the project is either a business unit of SRT or a subsidiary company of SRT (similar to ARL). The team selected the former as the executing agency for the reasons as follows: SRT carried out track rehabilitation and double tracking projects and is implementing urban railway Red Line under Japanese ODA scheme. Due to debt accumulation, lack in human resource, absence in efficient corporate management, some stakeholders are skeptical about the argument to appoint SRT to play central role for the project. To create a new organization for implementation of the project will become a significant burden to the Government. Therefore, a business unit of SRT or the subsidiary company of SRTET should be ideal for Thai side. In the meantime, the executing agency should have, as much as possible, an independent decision making power so as not to be influenced by the SRT management. (2) Overview of SRT SRT was established in 1951 under SRT Act with 100% shareholding by the Government. SRT owns a total of 4000km railway network nationwide, which is centered in Bangkok and spread to 4 directions in a radial fashion. Total patronage reached 44 million in 2014, accounting for 6.7% of modal share. SRT has a staffing strength of 15,000, out of which 77% are permanent employees and managerial staffs are 1,165 persons. The following shows the organization chart of SRT. Source: SRT Figure 7-1:Organization Chart of SRT 105

107 The financial statement of SRT is shown in the following table. SRT generates large amount of loss every year, THB 16.4 billion in The cumulative debt of SRT as of 2015 reaches THB 180. Meanwhile, SRT owns huge land properties. The Government often shows direction to accelerate the property development at SRT lands and reduce the debt of SRT by the profit. Table 7-1:Financial Statement of SRT Source: SRT 7.2 Project Implementation Structure The project requires the following 4 entities for planning, implementation and operation: (1) The Ministry to make railway policies and strategies (2) The Regulator of railway system (3) The Executing Agency of railway development (4) The Operator of railway system Key assumptions of project scheme alternatives are as follows (See 9.1). SRT is responsible for civil works and procurement of railway systems Donor loan is to be provided to SRT. Private entities establish SPV and are responsible for O&M. SRT leases assets and receive lease payment from SPV The Ministry The entity to make railway policies and strategies in Thailand is the Ministry of Transport The Regulator MOT has planned to create the Department of Railways (DOR) at the ministerial level and this department will be mandated to take the regulatory roles. The establishment is in the process by the 106

108 Office of the Public Sector Development Commission (OPDC). At the beginning of the establishment of DOR, the FS proposed 10 Bureaus and 1 Center based on the experience of Civil Aviation Department. Meanwhile, the process to create DOR has been postponed for several years partly due to the issues of asset transfer from SRT to MOT, in particular, the lands of SRT belonging to the Land Bank under MOF. If DOR does not exist at the time of implementation and operation, a unit at MOT will take the role of the Regulator The Executing Agency SRT is proposed as the executing agency of the Project The Operator The Operator of HS commuter system is assumed to be SPV established by private entities. In selection of the Operator, considerations are made for the following matters: Due to debt accumulation, lack in human resource, absence in efficient corporate management, some stakeholders are skeptical about the argument to appoint SRT to play central role for the project. As per the intention of Thai Government, the Operator could be a SPV formed by private sector under PPP scheme. Therefore, it is not expected that SRT would be the sole operator. For these reasons, establishment of SPV by private sector or public-private initiative is necessary. 7.3 Project Risk Sharing (1) Risk Sharing between Public and Private Sectors The proposed vertical separation scheme envisages separation of responsibilities on infrastructure development and service delivery and thereby reduces the associated risks between public and private sectors. It means private sector participation in O&M service can be promoted by improving profitability of railway business through separation of the responsibility on construction and ownership. The anticipated risks of the project and sharing principles are summarized as follows. Preliminary thoughts of risk sharing Land acquisition risk Design and construction risk (Civil) Design and procurement risk (System) Design and procurement risk (Rolling Stock) Trial run risk Investor risk Financial risk Operation risk Revenue acquisition risk Networking risk Political risk Force majeure risk Asset ownership risk Public Public Public Private Private Private Private Private Private or Sharing Public Public Sharing Sharing (2) Risk Sharing between Stakeholders of SPV The Railway SPV will be exposed to higher risk compared to the Station Development SPVs. Therefore, a sharing of station operation expense by the Station Development SPVs is proposed to improve profitability of the Railway SPV. This sharing scheme must be detailed in a subsequent stage. 107

109 7.4 Capacity Assessment of the Executing Agency (1) Capacity Assessment SRT has been developing their capacities on electrified railways and procurement / construction management through implementation of ARL and day-to-day O&M activities. Also, they have a good understanding of Japanese ODA loan projects through the past railway modernization projects and ongoing Red Line project. Therefore, SRT is able to implement the project as the executing agency. In the meantime, SRT faces with serious manpower shortage. In time of preparation and implementation of the project, offering skill development and training is highly required for successful implementation of the project. (2) Way Forward The need for human resource training in railway sector remains to be high. Under the memorandum of cooperation between China and Thailand on HSR North-Eastern Line, China offers assistance for human resource development in the field of railway, which has an ambition to educate 20,000 personnel in 5 years. In fact, Thailand carries out vocational training class for trainers in the field of railways in collaboration with a Chinese vocational center at a professional entity in Chana. In this curriculum, 15 lecturers from 4 colleges in Thailand take a series of classes on railway cars, electrifications, operational management, trackwork and maintenance depot for over a period of 1 month. Ministry of Land Infrastructure, Transport and Tourism of Japan also exchanged Memorandum of Cooperation for Railway Development with the Ministry of Transport of Thailand, which includes the cooperation for human resource development in the field of railways to ensure successful implementation of the projects under the initiative. By taking advantage of this agenda, it is highly effective to build human resource capacity for this project. 108

110 Chapter 8 Technical Advantages of Japanese Companies 8.1 Construction and procurement making use of ODA loans The superiority of Japanese companies in terms of technical capabilities relating to construction and procurement by making use of ODA loans is listed as below International competitiveness and order acceptability (1) Civil works Civil engineering works as a whole include construction of elevated highways which can be dealt with by the technology already widely used in urban railway construction in Bangkok. Therefore, it isn't that Japanese companies have special advantageous conditions. However, Japanese companies have track records of undertaking elevated highway construction in Bangkok and have a certain level of competitiveness against normal biddings. (2) Systems that depend on the specifications of the route (track, electrical equipment, train) The proposed railway route is assumed to be operated at the speed of 160 km/h, and the maximum speed is as same as that of the Airport Link. Therefore, if the same system as that of the Airport Link is used, the system can be operated without boundary in both routes. When a Japanese company undertakes the project, it is necessary to change the specification to meet the current specification. However, Japanese companies have won orders for urban railway trains in recent years. For the reason, they have a certain level of competitiveness. Table 8-1: Trains supplied by Japanese train manufacturers (maximum speed 160 km/h or more, excluding bullet trains) Train Manufacturer Track Record in Japan Track Record outside of Japan (Example) Hitachi Ltd. JR West 683 series Class 395, 800 (UK), series (Korea) Kawasaki Heavy Industries JR West 683 series Nippon Sharyo Ltd. Keisei Line AE-model, JR West 683 series Kinki Sharyo Co., Ltd. Japan Transport Engineering Company (Formerly known as Tokyu Car Corporation) JR West 683 series Keisei AE-model Niigata Transys Co., Ltd. Hokuetsu Express 683 series Source: Data published by the respective manufacturers 109

111 683series train 5 Keisei AE-model train 6 Class series train 8 Source: Respective railway operators Figure 8-1: Achievement of Japanese train manufacturers - maximum speed over 160 km / h (3) Systems not dependent on the specifications of the route (platform screen doors, station equipment, lift, etc.) In addition to the preceding item (2), station equipment items including Platform Screen Doors (PSD), fare collecting systems, passenger information systems, as well as station lifts, escalators, etc. will be required regardless of specifications of the route. Each of the equipment items is developed by a Japanese company, and has been delivered outside of Japan. There are also areas where Japanese manufacturers' competitiveness is increased if a specific performance is requested (for example, making the processing capacity of ticket gates more than a certain level). On the other hand, current situation is that many equipment has been introduced that have track records of installation in Thailand, manufactured by foreign manufacturers. It is difficult to introduce special performance requirements in this project, and there is no choice for Japanese companies but to compete under the same conditions as overseas products. 5 The JR West and the Hokuetsu Express: the special express "Hakutaka" 683 series began its operation in 2002 with the maximum speed of 160 km/h on the Hokuetsu Express line. A train uses narrow tracks of 1,067 mm, AC-DC dual use (DC electrification system within the Hokuetsu Express Line). Following the opening of the Hokuriku Shinkansen in 2015, the train service was discontinued and the operation at 160 km/h using this train was ended. 6 The Keisei line AE type: It began its operation in 2010 as an express train connecting the Tokyo city center and the Narita airport in 36 minutes. It is being operated at 160 km/h on the newly opened Narita Sky Access Line. This DC train uses the standard track. 7 Class 395, Class 800: High speed train with a maximum speed of 225 km/h on South Eastern line in southern England, which began its operation in It played an active role as an Olympic access railway. The train uses the standard track, AC-DC dual use (alternating current electrification system within the high speed operation section). Class 800 is scheduled to be introduced in Western Main Line from 2017, and East Coast Main Line from 2018 which are being delivered at present. Its maximum speed is 225 km/h, which is on par with that of Class 395, but the AC train is equipped with a diesel generator, so that it can generate power by itself in the non-electrified section series train: It is an express AC train operated on Korea's conventional lines which began its operation in The maximum operating speed is 150 km/h, but the design maximum speed is 165 km/h. Standard track, AC train. 110

112 As will be described later, these systems are not ordered separately, rather they are ordered collectively. Combination of bidding companies is more important than the individual specifications when Japanese companies consider accepting an order Equipment procured from Japan Railway will function only when many different systems are integrated, and it is necessary to have professionals who are responsible for system integration. In the case of Japan, railway operators have technical capacity for system coordination. The systems are ordered separately for individual equipment, and the railway operators undertake coordination work and bear risks. In the case of Thailand's railway construction, a turnkey complete system is ordered in general. In actual ordering, civil engineering works are grouped together, and then divided into several sections according to the scale, while tracks, power supply facilities, operation and maintenance facilities as well as trains are often ordered collectively. Also, it is common that PSDs and station equipment are to be incorporated into the system, while lifts are to be incorporated into the civil engineering work, in general. For this reason, the possibility of order-receiving of individual Japanese products mentioned in cannot be determined individually, rather it can be determined for each order by studying which company will work together with which company for bidding. Orderer Consultant on the Orderer side Specification creation, bidding supervision, construction management and so on. Track Electric supply Operation and maintenance Station equipment Train Civil work section 1 Civil work section 2 Civil work section 3 Civil work section 4 System Source: Study team Figure 8-2: Order-placing style in general railway construction in overseas As described in 8.1.1, we expect that a Japanese company receives an order for civil engineering works for some of the sections. In respect of the systems, if the systems as same as the one used in the Airport Link are introduced, which is the most realistic option, the order receiving styles as listed below can be considered. 1) A Japanese company will coordinate the entire system. Most of the individual equipment will be purchased from the supplier of the existing systems. 2) A Japanese company coordinates the entire system. Trains, power supply facilities and sales equipment will be procured from Japanese companies (Operation and maintenance facilities will be procured from the suppliers of existing systems, in principle). In practice, it would be an intermediate combination of 1) and 2). Based on the above assumptions, estimate amounts of orders received by Japanese companies are 111

113 calculated. As for the civil engineering work, given that there are four stations, it is assumed that zoning is made so that the project cost for each zone becomes almost equal, and it is assumed that a Japanese company receives an order for one of the 4 zones. In this case, the order amount received by a Japanese company will be one-fourth of the total civil engineering project cost. As for the systems, it is assumed that Japanese companies will receive orders for 20% of the total systems in the case of 1), while 90% in the case of 2). To be practical, taking the middle of these figures, 55% is assumed. According to this assumption, orders for the civil engineering work are estimated to be 43.9 billion yen, and orders for the systems are estimated to be 61 billion yen, totaling billion yen. Table 8-2: Estimation of potential order amount received by Japanese companies Item Entire Project Cost Condition Order placed with Japanese corporation Civil work 53.7 billion baht One zone out of 4 industrial zones 13.4 billion baht System Source: Study Group (176.1 billion yen) 33.8 billion baht (110.8 billion yen) Coordination only Middle figures Japanese companies receive orders for many of the systems Promotion of orders received by Japanese companies 112 (43.9 billion yen) 6.8 billion baht (22.3 billion yen) 18.6 billion baht (61 billion yen) 30.4 billion baht (99.7 billion yen) The following strategies are conceivable as an idea for constructing an environment in which Japanese companies can easily receive orders for some of the systems under conditions that will also benefit the operating company. 1) From the viewpoint of maintaining a sound railway operation over the long term, it is desirable that the operating company owns the trains as its own asset. If the income and expenditure environment allows this, trains should be separated from ODA loan and should be ordered by the operating company with its own funds. If the selection of the trains does not have to go through a general competitive bidding but instead could be done at the discretion of the operating company, there is a possibility that high-quality Japanese trains could be selected, based on their stability, durability, ease of maintenance and quality after-service, notwithstanding their initial high cost. The same could be applied to E&M systems. If E&M systems are also procured, not from an ODA loan but from an investment of the operating company, it is possible to introduce Japanese systems separately from those from a general competitive bidding. It includes mainly AFC, passenger information system or other systems that are related to sales, but also train operation and maintenance facilities that can support operations at 160 km/h can be considered to be included. However, the more it is expanded, the worse the income balance of the operating company will be. 2) Japan-made trains are available at a high purchase price, in general, but the maintenance cost thereafter can be kept low. In the case of the order received in England and for the Purple Line in Bangkok, the bidding was for not only the train itself, but also included maintenance services. An order received in the US was also the result of long-term use of Japanese trains in the New York subway. Therefore, there is a possibility that Japanese companies may have a competitive chance if the contract includes long-term maintenance. 3) The systems of the Airport Link are supplied by German Siemens AG. Since it is assumed that the new train is connected to the Airport Link this time, if another company intends to supply systems, it is inevitable to purchase signal's on-board equipment from Siemens. Unless price negotiation is carried out between Siemens and the ordering party prior to bidding to determine that such equipment is supplied by the ordering party, it would be remarkably disadvantageous for Japanese companies.

114 Furthermore, since a plan to replace the signal equipment of the Airport Link with the European Train Control System (ETCS) is currently in progress, if a Japanese company receives an order for such replacement work, the bidding of this Project can be also worked favorably (note that whichever company receives an order, in order to carry out fair competition, signal's on-board equipment should be supplied by the ordering party as described above). 4) The track structure will be either Rheda (Germany) type slab track based on the track record or Japan's slab track (J - Slab), given that it needs to support the speed of 250 km/h in the future. It is necessary to establish an order-receiving framework not only in this Project but for future dissemination of such track type. 8.2 Project participation through private investment The superiority of Japanese companies in terms of technical capabilities related to the project participation through private investment is as follows (1) Project style assumed This Project is aimed to increase the profitability of railway business that is otherwise difficult to be managed by a single entity, based on the profits gained from the railway development by ODA loan and public-private partnership as well as gained from land development along the railway lines by private companies. Although the entire project can be carried out by a single company, it is assumed that necessary funds will be distributed by dividing participating contractors for each function in order to clarify the roles and risks of participating contractors. The diagram below shows the structure of the Project divided by function. Yen loan JICA Government of Thailand Railway development fund Operation subsidy Development of areas along railway lines SPV 2 Railway maintenance and operation SPV Development of areas along railway lines SPV 1 Contribution Railway development supervision consultant Train fare Train fare Railway development contractor 2 Railway development contractor 1 Development of areas along railway line Contractor 2 Development of areas along railway line Contractor 1 Source: Study Group Customers / users Figure 8-3: Structure of this Project Participation style of Japanese companies (1) Participation as an investor Participation of Japanese companies in this Project as an investor has the following possibilities. 1) Participation of a special-purpose entity(spv) in railway business The main purpose of this SPV is to develop and operate the railway in this Project. Railway development will be implemented as a PPP project in accordance with the instructions from the government, and its cost is basically covered by expenditures of the country including ODA loans. Once the facilities are developed, such facilities will be transferred to the state and the railway will 113

115 be operated under a leased state-owned property (There is an option that trains that are directly related to sales and sales related station equipment to be owned by the SPV, of the equipment from the initial investment). Operating funds will be covered by contributions from land developers along the railway lines in addition to train fare income. In the event where sufficient profits cannot be achieved, it is necessary to establish a mechanism so that government subsidies could be obtained. Given that this operator has no major source of revenue other than fare, continuous railway operation cannot be guaranteed unless a mechanism that allows the operator to earn sufficient profit with the developers' contribution and government subsidies has been in place prior to initiating operation. Since this SPV must be equipped with railway management expertise, it is desirable that a Japanese railway operator makes an entry. In that case, it is necessary to build a mechanism so that an appropriate amount of profit could be generated to such Japanese railway operator. In addition, in order to continue railway management, the core participants of this Project should seek developers' profits. Japanese SPVs that participate in the development of areas near the stations, as described later, are required to share the fair amount of responsibilities with the railway business SPV. Furthermore, companies that receive orders from this SPV may participate in the Project. However, it is necessary to pay attention to any possibility of conflicts of interest, due to such companies that receive an order for development covered by government expenditure, especially yen loan. 2) Participation of an SPV in development of areas near the stations This SPV aims to increase profit by developing areas near the stations following the railway development. The development is completely led by private enterprises. Enterprises having rights and interests such as ownership of land along the railway lines, or companies that intend to develop businesses around the stations, will launch projects based on their one's own volition. Revenue of this SPV is attributable to the railway operator's continuous railway operation, as explained 1). For the reason, this SPV will pay a certain amount of contribution to the railway operator which will help stabilize the railway management. It is expected that Japanese companies will participate as this type of SPV. Participation of companies equipped with expertise in development of areas along the railway lines and near the stations is particularly effective. In addition, Japanese companies may receive orders for construction work in development projects. (2) Participation as a contractor Japanese companies as listed below are potential contractors of works in the Project. 1) Railway development Potential Japanese companies that may receive orders are listed in 8.1 (re-listed). Civil engineer contractor E & M system coordinator (EPC, trading company) Equipment supplier (track, power supply facility, train operation and maintenance facility, train, PSD, station equipment, lifts, etc.) Part supplier (parts for civil engineering work, system construction and facilities) Consultants such as design, bidding supervision, construction supervision, etc. 2) Railway management Potential Japanese companies that may receive an order in respect of railway management are listed below. Consultant on railway management Supplier of repair parts for facilities Coordinator, facility supplier and parts supplier upon system update. 3) Development around the stations Potential Japanese companies that may receive an order in respect of development near the stations are listed below. 114

116 Civil engineering and construction contractor involved in development along the railway lines and near the stations Consultant on development planning, sales promotion, etc. Others - real estate business, commercial business depending on how the area is developed 4) Financial matters Those supporting financial matters (banks and other institutions) to all of the above projects Advantages of Japanese companies The advantages of Japanese companies to participate in this Project are as follows Japanese railway operators are equipped with advanced expertise on train operations so that they are capable of efficiently providing high-quality services with excellent punctuality. Railway operators and developers have a number of experiences in development of areas along the railway lines, that they are quite familiar with the development and management methods. A number of Japan-based companies including automobile manufacturers have advanced into the areas along the said railway lines, and many Japanese are working and living in. For the reason, it is easy for them to understand the needs of these people. Upon launching the Project which requires integral development of railway and areas along the railway, it is useful to make use of Japanese companies' project management capabilities including cost, schedule and quality management Promotion of order-receiving of Japanese companies In order to promote the participation and order-receiving of Japanese companies as mentioned in 8.2.2, the following approaches are important. (1) Promoting understanding of the validity of implementation by the Thai government It is a major premise that the validity of this proposal is acknowledged and the Thai government decides to implement this Project as part of a public private partnership (PPP)-based railway development plan. However, it is hard to say that this proposal was adequately explained to the Thai government within this study period. For this reason, ongoing efforts are required to make the relevant governmental organizations (specifically, the Ministry of Transport, NESDB, PDMO, SEPO, and others) fully aware of the validity of this proposal. We hope that the Thai government can obtain national level cooperation where necessary. (2) Establish relationship between contractors and suppliers Due to the differences in business style between the two countries, the number of Japanese companies that are capable of undertaking railway development had been limited in the past. In recent years, some companies that are technically capable of coordinating the entire railway project emerge. If the project takes a form of individual suppliers hanging from the coordination company, it is possible to build a framework where the entire systems are built by all-japan. On the other hand, all-japan regime is often not an optimal option in terms of technique and cost. In areas where an order-receiving framework is not fully established for each individual part that makes up a railway system, it is necessary to optimize the combination of suppliers so that competitiveness can be maximized. (3) Understanding the development needs of areas around the stations and deepening the development plan In respect of the development around the station, which is the source of profit in this project, drawing specific blueprints is essential for recruiting participants. For this reason, it is necessary to understand and meet the needs of areas along the railway lines including the needs of enterprises 115

117 advancing into the eastern seaside area, while deepening the development plan for areas along the railway lines that is consistent with the development plan of the said area. 116

118 Chapter 9 Intention of Thai Government 9.1 Examination Progress of HSR Project SRT commissioned the feasibility study, detailed designs and additional study on PPP scheme. The project proposal was already made to the Government by SRT. The proposal reported that; The project section is from Bangkok to Rayong with a total length of 193km. Total project cost is THB 193 billion. Fare structure is base fare THB /km Project FIRR and EIRR are 3.16% and 14.83%, respectively According to the Transport Infrastructure Investment Action Plan 2017 announced by MOT on 13 December 2016, the HSR Eastern Line remains to be part of the investment program since News media reported that the Government intends to start bidding in the 3 rd quarter of 2017 after the approval of the cabinet or PPP council. The Minister of Transport stressed the necessity of area development along the railway corridor. He advised that private investors should carry out feasibility studies and environmental assessment for such development by their own efforts. In the meantime, the HSR Eastern Line has the following issues. About 20% of the entire corridor requires land acquisition. The acquisition is particularly large in the vicinity of Chachoengsao station. Therefore, detour route avoiding the access to the city center was proposed. No conclusion was made at this moment as the environmental impact assessment committee raised this issue. Development opportunities are negligible as private sectors do not own much land along the corridor. Therefore, the alternative proposal prepared by this study would attract the interest of project stakeholders. In fact, some of the stakeholders appreciate the proposal as more suitable for PPP financing due to the fact that viability of the project can be enhanced through participation of the private companies who own the land along the corridor. Source: MOT (13 December 2016) Figure 9-1:Transport Infrastructure Investment Action Plan (2016 and 2017) 117

119 9.2 Examination Progress of HS Commuter Line Project Responses and decisions by the key stakeholders of the Project in the course of this study are summarized as follows: The Team submitted the project proposal to the Minister of Transport in December Some stakeholders stated the proposal is implementable and economically more viable compared to the HSR Eastern Line. Meanwhile, Thai side concluded that they should rush to obtain cabinet approval with the existing project plans for the purpose to secure the budget under the existing government. They will further assess the feasibilities of two proposals and will select the better proposal at the time of review after cabinet approval. It was confirmed that the alteration to our proposal requires no re-approval from the Government as the proposed cost is lower than the budget of current discussion and the route runs parallel to the original proposal. Revisions to the proposal after the Cabinet decision will be carried out by OTP based on direction from the Ministry of Transport. In case of a change in route, either OTP will open a tender for detailed F/S, design, tender document preparation, EIA survey, etc. or the Thai government will request from the Japanese government assistance to carry out full or partial tasks with funds from Japan including JICA. Upon approval of the deliverables by the Ministry of Transport and the environmental department, preparation for project implementation will be in place. 9.3 Examination Progress of Project Scheme This section describes about the options for business scheme. As Thai Government envisages PPP financing, the team assumed the same in designing of project scheme. By nature investment cost of railway project is very large, while fare level as the primary source of the repayment must be maintained affordable as appropriate for public service. Extent to risk taken by private sector has a limitation as payout time of the Project will be lengthy and ridership risk will be high particularly in the early years after opening. As the experience shows, pushing major risks to private sector will result in failure of the Project. Interviews with Japanese private sectors including financial institutions support the principal that the Government must be responsible for most of the investment and provide sufficient financial support, such as availability payment, to attract involvement of private sector to the Project. Despite such financial support mechanisms are not concluded at this moment, it was well understood by both sides that Thai government bears the cost of the development of ground facilities including land acquisition, civil work and E&M system. On the other hand, the operator bears the cost of the procurement of rolling stock as well as operation and maintenance expenses. The operator will be established as a state owned entity and involvement of the private sector in the operation of HSR would be considered in later stages when the line becomes commercially viable enough to constantly generate appropriate level of earnings Preconditions Preconditions for project scheme are as follows. Separate ground infrastructure and train operation (vertical separation model) The Regulator is MOT, the executing agency is SRT, and the Operator is SPV. Civil infrastructure is owned by public, while rolling stock and E&M systems are owned by the investor (public or private) Project Scheme Alternatives With the above assumptions, the team proposed the project scheme alternatives as follows. 118

120 Table 9-1:Project Scheme Alternatives Case 1 Case 2 Land Public (SOE) Public (SOE) Civil Public (SOE) Public (SOE) E&M System Public (SOE) Public (SOE) 70% / Private (SPV) 30% Rolling Stock Private (SPV) Private (SPV) Operation Private (SPV) Private (SPV) Maintenance Private (SPV) Private (SPV) Source: Study Team Project Scheme Diagram The project scheme of the project can be summarized as follows. Railway SPV (1 vehicle) and Station Area Development SPV (2 vehicles) Thai and Japanese private companies to become shareholders of each SPV Responsibility for civil works and procurement of E&M systems to be under the responsibility of the Government Railway SPV to be responsible for procurement of rolling stock and O&M Station Area Development SPV to be responsible for urban development, commercial development, residential development and sales of real estates Source: Study Team Figure 9-2:Project Scheme Diagram Railway SPV will be exposed to higher commercial risk than Station Area Development SPVs. Therefore, an appropriate arrangement to improve profitability of Railway SPV through sharing of station operation expense by Station Area Development SPVs will be necessary. Details of the same must be elaborated in the next study Selected Project Scheme The result of 5.4 Financial Analysis implied both Case 1 and Case 2 of the project scheme alternatives can secure appropriate financial returns. Taking the sensitivities and risk exposures into consideration, the team concluded that the Case 1 is the best alternative. As such; Thai Government will bear the cost of ground facilities including land acquisition, civil works, and procurement of E&M systems and grant use of such facilities to the private business operator. Meanwhile, the business operator will bear the cost of procurement of rolling stock and be responsible for operation and maintenance. 119

121 Chapter 10 Prospects on Financial Procurement In this chapter, costs of civil engineering work and railway system procurement other than trains are assumed to be acquired by the Thai government through ODA loans. On the other hand, procurement of trains and maintenance and operation of railway will be carried out by private investment. Renewal and reinvestment expenses that are incurred after the launch of the railway business will also be covered by private investment. Meanwhile, funds for development near the stations along the railway will be raised by private investment as well Construction and Procurement by ODA loan Prospects for financing for construction and procurement through ODA loans are as follows Policy of the Thailand Government and other governmental offices This study is in the stage of the feasibility validation of the railway project and development near the stations conducted by, primarily, the private sector in Thailand and Japan. The study report was presented to the Ministry of Transport of Thailand in December 2016, and now we are waiting for comments from them. Based on the comments and intentions of the Thai government and stakeholders, we will proceed to a JICA PPP study, and in the process of which we will conduct interviews with relevant Thai governmental organizations. Major relevant Thailand governmental organizations include the Department of Transportation (Transport Policy Bureau OTP, Department of Railroad which is about to be established), the Thai National Railway (SRT), the Treasury Department (especially State-Owned Enterprise Policy Department (SEPO), the Public Debt Management Bureau(PDMO)) and other offices. As described in 7.1, in this study, the business unit or subsidiaries of the Thailand National Railway Company (SRT) are assumed to be the project executing entity. The SRT implemented several ODA loan projects in the past, including improvement of national railway tracks, double tracking and other projects. Currently, it has carried out the Urban Railway Red Line Project making use of ODA loan. On the other hand, the SRT has faced objections as to its abilities as a debtor in terms of accumulated debt, shortage of human resources, lack of management capability, etc. Therefore, some measures need to be taken upon implementation of the planned project, such as separation from the decision making body of the SRT as much as possible Situation of relevant organizations The ratio of public debt outstanding to Thailand's GDP is around 45% as at around the end of 2015 and around 60% as at In this regard, it can be said that the country has a sound financial management and reserve capacity. Nonetheless, from the fact where the Thai Kingdom Treasury Department tries to keep the ratio of public debt outstanding to GDP below 60%, in principle, in fact, less than 50%, and the government is hesitant to increase new public debt as much as possible. For the promotion of infrastructure development plans, the Thai government intends to procure funds through state-owned enterprises borrowing, public-private partnership PPP, or infrastructure funds from the viewpoint of suppressing the increase of public debt. Meanwhile, although the PPP method was proposed on the Thai government's intention for the fund and investment plan of the high-speed railway Eastern Line feasibility study conducted prior to this study by the Thailand National Railway, the huge construction cost of the high-speed railway project has become an obstacle. For the reason, Thai private enterprises cannot rush into a decision about investment. Further, although the Thai government plans to enter the contractor selection process early, it is unlikely that there are business entities that are interested in making an entry. Therefore, in order to enhance the feasibility of the railway project, we have proposed that cost of the civil engineering work and railway system are procured directly by the Thai government through ODA loans, while procurement of trains and maintenance and operation of the railway will be conducted by private investment. We also have proposed that projects to develop near the stations 120

122 will be implemented and the profit gained from the real estate development that greatly enjoys benefit from the launch of railway business will be returned to the railway business. In light of this, it is necessary for Thai and Japan's private enterprises that have interest in the project to jointly propose an alternative railway project with high feasibility, and promptly connect to the launch of the project. Moving forward, we wish to receive a request for an additional study from the Thai Government without delay based on the project launch schedule in line with the intention of the Thai Government: The project is to be approved by the Cabinet or the PPP Committee, and the railway route to be finalized in the beginning of 2017, bidding to be conducted as a PPP project in the third quarter of In the case of an ordinary ODA loan procurement, a JICA PPP study is to be completed in 2017, then a JICA ODA loan preliminary study to be conducted in The initiatives and challenges to request for ODA loan are summarized in Project participation through private investment Procurement of trains and maintenance and operation of the railway will be conducted by private investment, and funds for the development around the stations along the railway line will also be procured through private investment, as well. In this scheme, a railway management and maintenance entity and entities that develop near the stations along the railway line will stand side by side, and part of the operating cost for railway operation and maintenance will be borne by the entities that develop near the station along the railway line, which are the main beneficiary of railway development Funding sources and financing plans (1) Funding from borrowing Basically, funds are assumed to be procured on a fixed long-term rate from Thai private commercial banks. We have conducted an interview with three major banks during this study period. In respect of the ultra-long-term fixed interest rate market, funds are procured individually by interest rate swaps from the floating rate market. However, we used the following conditions for this study: the loan (repayment delay) period is 3 years, the subsequent repayment period is 20 years, totaling 23 years. The interest rate after the swap is set to the 7% level. The cash flow is calculated accordingly in the financial analysis. Regarding infrastructure projects other than electricity and road projects, all of the banks that we interviewed have no experience in the provision of loans in the project finance method. They all commented that they are trying to find the way around for handling loans in the project finance method related to railway projects. Basically, loans are provided in the corporate finance method depending on the credibility of the project sponsor. Also, according to the banks, it is possible for a single bank to provide loans without forming a syndicate, given the funding amount provided by the private sector. Depending on the project participants from the private sector, it may be possible that the railway business SPV or SPVs that develop near the stations raise funds respectively in the corporate finance method. In the case of funding by loans in the project finance method, there may be limitation under various financial restriction clauses such as the DSCR. These issues need to be reviewed in the next JICA PPP study along with an attempt to further deepen the project schemes. (2) Investment financing The railway project and the development project near the stations are assumed to be funded by private enterprises in Thailand and Japan. In addition, the Japan Overseas Infrastructure Investment Corporation for Transport and Development (JOIN) which was established in 2014, with the aim of supplying funds to overseas transportation projects and urban development projects is expected to participate in overseas projects to support private investment in the future. 121

123 The JOIN supports projects that match the value of Japan's policy in areas such as urban development, highway, port terminal, airport terminal, logistics, high-speed railway and other areas, including projects that make use Japan's knowledge, technology and experience, the participation and involvement in business of O&M companies, projects for the creation of business opportunities of related companies, development of the partner country and people. In specific, it separates investment from liabilities to the extent that it does not exceed the private investment, separates roles as a joint venture from the private investors, collaborates with the government including the JBIC and the JICA, etc. in financial aspect to build a support system together with the government, utilizes long-term finance based on the local currency, and provides completion warrantees, responses to cost overrun where necessary, and others. Projects similar to this project that the JOIN undertook include an urban development project in the suburbs of Jakarta, Indonesia in 2016, an urban development project in the central part of Myanmar and Yangon, and 4 railway projects in Brazil, Rio de Janeiro, Sao Paulo and others, and the Texas State high-speed railway project. This project is a combination of a railway project and an urban development project along the railroad lines, and it is deemed highly significant in terms of policy related to the Thailand's urban environmental problems including rectification of regional gaps attributable to the concentration of population in urban areas and the transfer of capital functions, and reduction of traffic congestion. Therefore, in the coming JICA PPP survey, detailed study on the project schemes and means of investment is required while keeping JOIN's participation and investment in mind. Some of the means of financing other than these ordinary investments and borrowings that may be available in Thailand in relation to this study are introduced below for reference. Thereby, we believe that the financing options of Thailand will broaden, although the feasibility thereof will be studied in the JICA PPP study in the future. (3) Real Estate Investment Trust (REIT) In Thailand, the Thai Stock Exchange took a measure to provide flexibility to real estate investment in 2012, and REIT was introduced as an attractive and highly transparent system for investors. Utilization of REIT in Thailand allows owners of real estate to procure funds easily using real estate that has an asset value. To maintain the size of REITs, the minimum offering amount of trusts with certificate of beneficial interest must be at least 500 million Baht. Trusts with certificate of beneficial interest are listed on the Thai Stock Exchange (SET). The first REIT on the Thai stock exchange, the Impact, Growth, and Real Estate Investment Trust was listed on October 2014 and started trading. This REIT was for the facilities associated with the large international exhibition hall "IMPACT" in Muang Thong Tani district, outskirts of Bangkok operated by a real estate company, the Bangkok Land (BLAND). The total market value at the time of listing was billion baht. (4) Infrastructure Fund The Thai Stock Exchange (SET) introduced Infrastructure Fund as a security product in 2013 targeting infrastructures including railway, power generation, road, alternative energy, disaster prevention, water and sewerage, airport, harbor, communication, irrigation, where corporations can transfer their assets that they manage or plan into Fund that can be securitized and listed on SET. It is conditional that the funds procured must be used for infrastructure development. It is characterized by a preferential taxation system where the assets and businesses that were traded with Fund are exempted from income tax. On top of that, investors are exempted from tax on dividends for 10 years. The first listing project was the BTS Rail Mass Transit Growth Infrastructure Fund (BTSGIF) established by BTS Group Holdings which operates an elevated railway in Bangkok. It acquired the assets of elevated railway, the total distance of which is 23.5km from the parent company by transfer, 122

124 and raised 62.5 billion baht with initial public offering. The ratio of domestic investors to overseas investors in BTSGIF is 1:2. According to BTSG Holdings, overseas popularity is high and it has secured some of the stocks for domestic investors Feasibility of Financing This project is composed of two types of infrastructure development projects, i.e., projects of railway and development near stations along the railway line, and the proposed project schemes are described in For the railway project, a so-called vertical separation method is proposed, which means the railway facilities and the train operation are separated. The railway project SPV is responsible for train procurement, operation and maintenance related to train operation, while SPVs to develop areas near the stations are responsible for urban development, commercial development, housing development, and real estate sales. The development of railway line infrastructure in the railway project requires enormous equipment investment. It is difficult to achieve profit only by the fare income which is the main source of railway business. For the reason, it is difficult to impose risks of this project to the private sector. Meanwhile, despite the Thai government policy of controlling public debt, the railway is also playing a role of national economy as a basic infrastructure. In this regard, the project is expected to be carried out as Thailand's public investment making use of JICA ODA loan. Meanwhile, the railway business SPV from the private sector will be responsible for not only train procurement but also train operations. It is the area where Japanese products and machinery have technological superiority. Revenues are expected to be generated based on the result of railway business financial prospect analysis, as shown separately. The investment by Thailand and Japanese private enterprises and the procurement of loans for funding from local finance institutions are highly likely. Also, regarding the exports of trains and railway systems, use of the export credit system of Japan can be considered. While the development near the stations along the railway line is assumed that Japanese corporate partners will present a concept of town creation based on the large complex type new town model, and local real estate partners will undertake the development around each station along the planned route. Each local real estate partner must have a proven track record in development and management of factory parks and commercial facilities, and corporate finance or asset based finance is also highly likely to be applied. In addition, there are methods to distribute debt by using a fund product based on the government policy, such as REIT and Infrastructure Fund as stated above that were introduced in the past several years, although they are not adopted in the financial analysis this time. In the next JICA PPP study, detailed study and review of the project schemes by adopting diverse financing methods including such methods are required Cash flow analysis Please refer to Chapter 5, 5.4 Preliminary Financial Analysis for the cash flow related to funding. 123

125 Chapter 11 Challenges and Action Plan As mentioned above, this Project is assumed to adopt the scheme of separation of infrastructure and operation, proposing to make use of ODA loans for infrastructure development, and private investment for procurement of trains (and part of the E&M systems according to business characteristics). Construction and procurement making use of ODA loans, challenges and action plans for participation by private investment are explained as below Construction and procurement making use of ODA loans Challenges and action plans for construction and procurement making use of ODA loans are as follows Initiatives toward requests for yen loan The project implementation entity is assumed to be the SRT, but relevant authorities are involved for ODA loan requests. Relevant authorities and their roles are listed as below. Table 11-1: Authorities Relevant to ODA Loan Requests and Their Roles Institution Role National Economic And Formulate national plans and present business policies and important Social Development areas Agency (NESDB) Budget Office (BOB) Public Debt Management Office (PDMO) Formulate annual budget plans, allocate and manage budget Formulate national debt plans, manage public debt and mediation of debt finance for the projects decided to be implemented State Enterprise Policy Office (SEPO) Ministry of Transport PPP Policy Committee Thai National Railway Source: Study Group Formulate policies and evaluate performance of state-owned enterprises Evaluate and provide advice on its own funds as a shareholder of state-owned enterprise Study investment modes for state-owned enterprises Propose project plans and project implementation plans as the competent ministry Determine the type or priority of PPP projects Function as a substantial decision-making body of PPP projects Formulate project plans and project implementation plans as the project implementing entity The progress up to the present time and future initiatives are listed below. The SRT, which is assumed to be the project implementation entity, has already completed the fast railway East Line F/S, formulated a project plan including funding, and submitted it to the competent authority, i.e., the Ministry of Transport. The proposal in this study is positioned as an alternative proposal. In addition to the technical alternatives of tracks and railway systems, we propose the use of ODA loans as a method of raising fund. The draft of the project plan examined by the Ministry of Transportation has already been submitted to the NESDB and will be submitted to relevant organizations including the BOB and the PDMO through the Cabinet in the future. Then, the respective relevant organizations will review the project plan including the budget plan and debt plan, from the viewpoint of the respective functions, and prepare answers in case advice is sought at the Cabinet meeting. 124

126 While the NESDB will study the plan as to whether the planned project is consistent with the policy of national plan. At the same time, it will coordinate with relevant organizations including the BOB and the PDMO. The plan will be deliberated at the Cabinet meeting and the project will be decided to be implemented Measures necessary for requesting/providing ODA loans While railway development incurs huge project costs, fare revenue which is the main repayment source, needs to be kept low as a public utility fee. In addition, there is a limit to the risk that the private sector can bear, given that the investment collection period is long-term and there is a possibility where demand may drop, particularly in the initial stage after opening. Therefore, it is desirable to adopt the vertical separation method in this project as well. In respect of civil works and E&M system procurement, it is desirable to work on the formation of an ODA loan project, as part of Japanese government's infrastructure overseas development support. Prior to requesting for an ODA loan, a more detailed feasibility study (F/S) including topography survey, geological survey, hydrological survey, utility survey, basic design, environmental impact assessment, etc. need to be carried out based on the results of this study. Based on this study report, the SRT will formulate a project plan and project implementation plans, and will proceed with government approval procedures. Therefore, we are currently checking with the Ministry of Transport whether or not it intends to submit a request for implementation of JICA PPP survey to formulate a detailed plan of this project following this study Challenges and action plans for ODA loan request (1) Funding method The Ministry of Finance of Thailand is trying to keep the ratio of the amount of outstanding public debt against GDP to below 60%, in fact, to less than 50%, in principle. For this reason, the government is hesitant about borrowing-centered public investment. Therefore, the government may not necessarily agree on the application of ODA loans. For this reason, it is conceivable to propose a more acceptable proposal to the Thai government, such as expanding proportion of private investment as much as possible and limiting the borrowing to E&M system acquisition. (2) Speed of ODA loaned project In order to realize this proposal as an ODA loaned project, it is necessary to conduct detailed study and to review the route plan, transportation hub plan and rail yard plan in the next feasibility study. On top of it, if a JICA preliminary study is carried out, there is a possibility where the project may not be initiated in accordance with the schedule as the Thai government assumes. In order to shorten the period before launching the project, it is necessary for the Japanese stakeholders to think of time while setting up and carry out a study Project participation by private investment Challenges and action plans for project participation by private investment are as follows Initiatives by Japanese companies (1) Deepening the project scheme The risk of a railway business SPV is larger than that of an SPV that develops land near stations. For the reason, more detailed feasibility evaluation is indispensable for potential railway business SPVs to solidify their will to participate in the project. Participation of a Japan-based railway operator with extensive expertise is particularly desired. But it is difficult for them to determine the participation at this stage. For this reason, we propose that a mechanism to be built in order to increase the 125

127 profitability of the railroad business SPV by having SPVs that develop land near stations to shoulder part of station operating expenses. This burden framework needs to be studied in more detail moving forward. (2) Participation of a Japanese railway operator Participation by a Japanese railway operator equipped with extensive experience in railway operation and maintenance is desirable. For this reason, in this study, we tried to extract business operators that showed their interest through consultation and exchange of opinions with multiple business operators. On the other hand, it is difficult for them to make the final decision at this stage where the project plan and scheme have not been determined by the government. We intend to continue coordination with Japan-based railway operators moving forward. (3) Creation of business opportunities Given that the profitability of railway business itself is not high, in general, it is necessary to have close cooperation with the community. There are said to be Japan-based companies advancing into the eastern coastal area. Creating new business opportunities by strengthening collaboration among Japan-based companies may improve the profitability of railway business and land development projects near the stations Initiatives by relevant government agencies / implementing agencies in Thailand The Thai government is having a solid intention to implement railway development in the eastern coastal area as a PPP project. The SRT commissioned consulting service on high-speed railway Eastern Line and the local consultant is examining the PPP scheme. Meanwhile, the enormous construction cost of the high-speed railway project has become an obstacle, and Thai private enterprises who independently conducted a study on feasibility are hesitant to make a decision on investment. Based on these circumstances, the Thai government is prepared to make a project plan taking into consideration of the opinions of private companies, and has reviewed the proposals continuously and in an active manner and to boost the feasibility Legal and financial constraints (1) PPP law and detailed bylaws In Thailand, the PPP Law is enacted in 2013 for the purpose of promoting PPP projects, but the detailed by-laws are not in place (there is information that they will be developed with the support of an international cooperation agency). Even under such circumstances, the PPP policy committee is working on the formation of PPP projects. The first five plans that the committee is handling are 334 billion baht in size, aiming at early realization. Five projects are listed as the first project under the PPP Law (Pink Line, extension of Purple Line, extension of Blue Line, Bang Pa-in - Korat Expressway, Baan Yai ~ Kanchanaburi Expressway). Within the Thai government, there are opinions that the high-speed railway Eastern Line should also apply this law, and this proposal as an alternative plan is considered to be handled by the PPP policy committee. For selection of an operator and the signing of project contracts, it is necessary to place an advisor who is experienced in contracts and legal affairs because the detailed bylaws have not been developed. (2) Government against private investment ratio The Thai government is promoting an infrastructure development plan worth 24 trillion baht (equivalent to about 20% of GDP) for 8 years ( ). 20% of the investment amount will be covered by the government budget, 45% by the borrowing from state-owned enterprises, 20% by PPP, 10% by state-owned enterprises income and 5% by infrastructure fund. 126

128 At present, infrastructure investment is basically covered by government budget, and private investment is mostly covered by banks. The planned infrastructure investment amount exceeds the government budget, thus private investment should be introduced. While the government expects large private investment, if the same operating revenue is achieved, the profitability will be higher from the standpoint of private enterprises when private investment is small. For this reason, detailed consultation with the Thai government is necessary to determine the public-private investment ratio Challenges and Action Plan of Project Participation (1) Promoting understanding of local affiliated companies and Japanese companies that are willing to participate This project originated from the fact that local companies have requested cooperation of Japanese companies prior to participating in the Thai government's high-speed railway PPP project. In response to this, Japanese companies have formulated a project plan while taking into account their own experiences and superiority. Moving forward, it is important for local affiliates to determine the validity of the proposal of this project, to understand the merits of joint implementation with Japanese companies, and to sign an agreement for project implementation. (2) Adjustment of duties and role sharing between Japanese participating companies The roles to be played by individual companies are largely varied among the Japanese participating companies. As a result, expectations of profitability of business, size of risks and business form are greatly different depending on the company. Participation of railroad business SPV is a business form that cannot expect significant size of profit. For the reason, it is difficult to make a decision on participation unless the overall responsibilities and role sharing become clear. Therefore, it is necessary to firstly clarify responsibilities and role sharing among Japanese participating companies, and make adjustments so as to achieve a balanced allocation of expected profit and risk. (3) Adjustment of project risk sharing among participating companies This project is aimed at participation of many companies, and those companies have various speculations. The core of this project is to ensure that SPVs that develop areas near the stations allocate part of the development benefit to the railroad project SPV. In other words, the SPVs that develop areas near the stations also bear a certain risk, so that risk leveling can be achieved. For this reason, it is necessary that investors in the railway business SPV and investors in SPVs that develop areas near the stations to share the expected profits and risks and clarify the details of contribution system. This is indispensable for Japanese companies to make a decision on participation. 127

129 Appendix Appendix 1: Project Proposal Appendix 2: Report on Demand Forecast Appendix 3: Plan & Profile Drawings 128

130 Appendix 1: Project Proposal 129

131 Appendix 2: Report on Demand Forecast Transport Demand Forecast 0.1 Overview The transport demand analysis for the new high speed commuter (HSC) service between Pattaya and Bangkok, actually Suvarnabhumi airport for passenger movements was estimated as a derivative of the work done in earlier studies with particular reference to the previous high speed railway project between Bangkok and Chiang Mai 9. It is not the intention of the current analysis to develop any new analytical tools but rather build on the tools of earlier demand forecasts. No new surveys were commissioned as part of this demand forecast 10. Nevertheless the structure of the model is reported in detail within this document for completeness. Although this document incorporates the concepts of the earlier studies, the focus of this document is the Eastern Commuter Service between Bangkok and Pattaya. However, much information included is developed from earlier studies as no specific additional surveys were undertaken during this project. This section of the report has a further five sections. The next section deals with the key inputs with specific association with the project. This is followed by a section dealing with the socio-economic framework whilst the following section is a summary of the earlier passenger surveys undertaken for the evaluation of earlier high speed rail projects. The next section addresses the passenger demand forecast procedure whilst the penultimate sections presents overall conclusions of the demand forecast. The last section examines the next steps and the way forward. 0.2 Key Inputs Transport demand is highly integrated with key inputs into the analytical demand procedures such as station configuration, strategic infrastructure including the international airport and the proposed fare structure. The anticipated opening year of the project is the year However as stated later, forecasts have also been prepared for the year 2032, ten years after opening and 2042, twenty years after opening. This will to allow for the preparation of detailed economic and financial evaluation Station and Service Configuration Transport demand associated with the proposed project is highly dependent on the station locations and the proposed development of the station environs. In fact the attractiveness of passengers for this projection is driven by the two anchor stations of Suvarnabhumi11 and Pattaya. The proposed rail alignment deviates from the existing rail alignment as it follows the expressway alignment of the Department of Highways, Route 7 as seen in the three interlinking Google Maps of Figure 0.1 and the transport network map of Figure 0-2. There are three proposed intermediate stations between Suvarnabhumi and Pattaya namely: 9 The title of this project was Preparatory Survey on Bangkok Chiang Mai High Speed Rail Development Project. 10 This situation was a direct result of project limitations. This analysis was undertaken within a short time frame with limited resources. 11 It is anticipated that this station will likely form part of the extension of the existing Airport Rail link and as such there is no additional boarding penalty or transfer penalty between this system and HSC. 130

132 Figure 0-1 Station locations New Chachoengsao; Don Huaro; and Surasak. In the development scenario as discussed in following sections, each station has good connections with its local environment. In particular in the case of Don Huaro, there is a strong connection to Chonburi and its associated beach developments. The additional demographic characteristics associated with each station environment are discussed in later sections of this document. 131

133 There are two proposed services on this railway route, an express service between the two anchor stations and an all stopping service. The express service is expected to take approximately 46 minutes whilst the all stopping service is slightly longer at 54 minutes. As seen in Figure 0-2, an Area of Influence is formed around the alignment of HSC consisting of the Bangkok Metropolitan Region and the three eastern provinces of Chachoengsao, Chonburi and Rayong. This area becomes the focus of economic benefits. This figure also presents the overall network configuration of the eastern region and the zoning system showing the TAZ (traffic analysis zone) boundaries. Additional zones were created to incorporate the new development associated with the HSC stations. Figure 0-2 Network configuration Fare Structure The Transport demand for HSC should be fare sensitive whilst attempting to maximize both the economic benefits and fare box revenue. The base or reference fare has been initially established at 50 Baht boarding fare plus 2 Baht per kilometer or 250 Baht for a 100 kilometer trip. This is of course subject to sensitivity tests in later sections of this document where a distance based only fare is also analyzed during the sensitivity analysis. A fare structure of existing transport modes across the kingdom is shown in Figure 0-3 including the proposed northern high speed rail route. This figure is included as a general reference. 132

134 Fare (Bath) 1,600 1,400 1,200 1, Distance (km) VIP bus Air-conditioned bus 42 seats Air-conditioned bus 47 seats Normal bus Train (1st Class) Train (2nd Class) Train (3rd Class) HSR(JICA Study Team) HSR(Thai F/S) Air (Average) Figure 0-3 Comparison of fare structure by transport mode Source: Preparatory Survey on the Bangkok Chiang Mai High-Speed Rail Development Project 0.3 Basic Socio-economic Framework Transport demand is responsive to economic activities and demographic changes within the Kingdom and the target corridor. The demographic estimation from earlier projects has been adopted for the population and the provincial Gross Domestic Products (GDP) until the time horizon of 2050 commencing with the year The socio-economic forecasts were developed during the recent analysis of the Chiang Mai to Bangkok high speed rail project which are in turn a derivative of the socio-economic data within the Thailand National transport model developed by government12. A brief summary is included in this document with particular reference to the said corridor Population Forecast population is summarized by province/region in Table 0-1. In summary the population of the kingdom expected is expected to grow initially until 2030 but thereafter the population will commence to decline as the general impact of ageing comes to pass within the kingdom. This is likewise reflected in the other provinces of the Eastern Sea Board. If one considers the project, Area of Influence13, the population in this area in 2014 is 23 percent of the kingdom s population rising to 26.2 percent of the kingdom s population by This is the base population prior to additional population being moved into the new development associated with HSC. 12 The transport demand forecast model using Cube software with TDL2 which was provided by OTP (The Office of Transport and Traffic Policy and Planning). 13 The area of influence for this project is defined as the BMR plus the three eastern provinces of Chachoengsao, Chonburi and Rayong. This area is used later for economic evaluation. 133

135 Table 0-1 Forecasts of population for Bangkok and the provinces of Eastern Seaboard 14 Unit: thousand Year 15 Region/Province BMR 16 15,394 16,401 17,448 17,319 16,341 Chachoengsao Chonburi 1,627 1,727 1,855 1,879 1,773 Rayong ,004 1, Total 15,394 16,401 17,448 17,319 16,341 National Total 67,003 68,127 68,306 65,996 62,269 Source: Preparatory Survey on the Bangkok Chiang Mai High-Speed Rail Development Project Economic Activity Forecast Regional Gross Domestic Product (RGDP) is summarized by province/region in Table 0-2. The overall growth in GDP across the kingdom is expected to be an average of 3.9 % per annum resulting in a growth in GDP per capita of 4.1% per annum across the Kingdom between the years of 2014 and In Bangkok, Chachoengsao, Chonburi and Rayong the overall growth in regional GDP between 2014 and 2050 is 3.6 %, 6.3 %, 5.2 % and 4.8% respectively per annum. The three eastern provinces are expected to outperform in terms of growth in comparison to the national growth projection. If one considers the project, Area of Influence, the economic activity in this area in 2014 is 63.2 percent of the kingdom s economic activity rising to 66.1 percent of the kingdom s economic activity by This is the base economic activity prior to additional activity being moved into the new development associated with HSC. Table 0-2 Forecasts for regional domestic product in Bangkok and the provinces of Eastern Seaboard Region/Province Year Unit: billion Baht (Yr:2002 Baht) BMR 4,540 5,363 7,782 11,291 15,878 Chachoengsao ,264 2,298 Chonburi ,223 2,082 3,429 Rayong ,011 1,609 2,474 Total 5,854 7,070 10,688 16,245 24,080 National Total 9,258 11,015 16,348 24,594 36,406 Source: Preparatory Survey on the Bangkok Chiang Mai High-Speed Rail Development Project Activity Enhancement Development In addition to the population and economic provincial forecasts previously mentioned, new development will follow the establishment of HSC in the eastern region. In particular, new 14 For the purpose of this analysis, the Eastern Seaboard has been defined as the three eastern provinces of Chachoengsao, Chonburi and Rayong. 15 It is stated earlier that the project modelling years are 2022, 2032 and The socio-economic forecasts for these years are estimated by interpolation between the nominated 5 year time frames. Only the ten year time frame is presented in this table and the subsequent economic table. 16 The BMR, Bangkok Metropolitan Region includes the provinces of Bangkok, Samut Prakan, Nakhon Pathom, Pathum Thani, Nonthaburi and Samut Sakhon. 134

136 development is associated with the stations of New Chachoengsao, Don Huaro, and Surasak. The ultimate population associated with the new development in the station environs is two hundred thousand people at New Chachoengsao with a further one hundred thousand people at Don Huaro and finally an additional twenty thousand people at Surasak station. Thus by the final build out in 2050, an additional three hundred and twenty thousand people would be attracted to the eastern region. It is assumed that these people would be attracted from BMR and the other eastern provinces. Thus even by the opening of HSC in 2022, around fifty thousand people are attracted to the developments around the new stations in anticipation of HSC. This increases to around two hundred and eighty thousand people by The development of HSC will also likely increase economic activity within the vicinity of the alignment of HSC. Provincial GDP growth in the provinces of Chachoengsao and Chonburi will increase above the base estimates documented in Table 0-2. In later years, this is as a result of increased activity in the industrial and service sector. In Chachoengsao, the average growth rate will be 7.9 % per annum and in Chonburi the estimate is 7.3 % per annum Transport Survey Investigation The recent surveys used in the update of the transport model were those undertaken as part of the Preparatory Survey on Bangkok Chiang Mai High Speed Rail Development Project. A key survey in the model enhancement was that of the stated preference results whose results are included forthwith The extent of recent surveys To reflect the recent modal choice preference along the aforementioned rail corridor in the mode choice model, a Stated Preference (SP) survey was conducted in The SP survey method requires respondents to state their preference under certain assumed conditions such as transport mode choice with higher speed rail in the future. Approximately 3,000 valid samples were collected in this study across all existing modes of transport. The numbers of collected samples by survey location are shown in Table Key results of recent surveys Key results from these surveys allowed the existing national transport model for Thailand to be enhanced to reference the trip purpose of any trip in the kingdom. The trip purpose is defined from the sample as seen in Table 0-4. Thus it was now possible to modify the transport model to include trip purpose. Figure 0-4 Share of monthly household income by mode of transport is presented in Figure 0-4. This shows the proportion of people travelling by the different modes in relation to household income and thus begins to address the issue of affordability. Site # Location Type Table 0-3 Number of samples by location 1 2 Highway Bus Terminal Nakhon Sawan Location (District) Site Name Collected Valid Samples Bangkok Mo Chit Bus Terminal 205 Nakhon Sawan Bus Terminal Phitsanulok Phitsanulok Bus Terminal This increase in growth is as a result of increased development as estimated by the consultant team in the industrial and service sector as a result of HSC. The industrial and service sector in the last ten years of project evaluation period (2032 to 2042) is expected to grow by six and twelve per cent per annum respectively In Chachoengsao with a likewise increase of four and eight percent per annum respectively in Chonburi. 135

137 4 Uttaradit Uttaradit Bus Terminal Chiang Mai Chiang Mai Bus Terminal Bangkok Hua Lamphug Station Nakhon Sawan Nakhon Sawan Station 109 Railway 8 Phitsanulok Phitsanulok Station 99 Station 9 Uttaradit Uttaradit Railway Station Chiang Mai Chiang Mai Station Bangkok Suvarnabhumi Airport Don Muang Don Muang Airport 136 Airport 13 Phitsanulok Phitsanulok Airport Chiang Mai Chiang Mai Airport Highway 32 (Aung Thong Ayuttaya) Highway 32 (Nakhon Sawan Uhtai Thani) Roadside Highway 117 (Pichit Nakhon Sawan) Highway 1 (Tak - Kamphaeng Phet) Highway 11 (Lampang - Chiang Mai) 200 Total 3,057 Source: Preparatory Survey on the Bangkok Chiang Mai High-Speed Rail Development Project Table 0-4 Survey results by trip purpose Purpose Air Bus Car Train Total Business Private ,181 Sightseeing Others Total ,057 Source: Preparatory Survey on the Bangkok Chiang Mai High-Speed Rail Development Project Airport 2% 2% 8% 14% 18% 16% 12% 9% 3% 13% Car 3% 8% 16% 19% 17% 11% 7% 4% 4% 8% Bus 5% 10% 25% 22% 11% 7% 5% 2% 4% 2% Train 5% 15% 26% 18% 13% 7% 5% 3% 2% 1% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% less than 5,000 Baht 5,001-10,000 Baht 10,001-20,000 Baht 20,001-30,000 Baht 30,001-40,000 Baht 40,001-50,000 Baht 50,001-60,000 Baht 60,001-70,000 Baht 70,001-80,000 Baht Above 80,000 Baht Does not want to answer Figure 0-4 Share of monthly household income by mode of transport Source: Preparatory Survey on the Bangkok Chiang Mai High-Speed Rail Development Project 0.5 Passenger Demand Forecast Model Methodology A conventional four step procedure model was developed for the demand forecast of this study as developed in the form of a model enhancement of the Thailand National transport model during the. Preparatory Survey on the Bangkok Chiang Mai High-Speed Rail Development Project. The four steps of the traditional model are generation, distribution, mode split and assignment. 136

138 0.5.2 Structure of the Analysis (1) Model Background Considering the data availability of existing traffic volume and the target years of earlier projects, the base year was set as 2014 and the target years were set as 2022, 2032 and The target year horizons represents the opening year of HSC, opening year plus ten years and opening year plus twenty years. (2) Zoning System Thailand is divided into 77 provinces and 926 districts (amphor). Considering the available socioeconomic data and existing traffic data, the TAZ for this study is decided as the district level, namely 926 zones with 8 outer zones as follows. For this analysis, new zones are included for the three intermediate stations associated with proposed development linked to the HSC service. This development is included as changes in the provincial planning data as in fact most planning data for input into the transport model is prepared initially at provincial level. The detail of the national zoning System is depicted in Figure 0-5. (3) Future Network Assumptions There are planned improvements in the future infrastructure for the kingdom over the next several years. The timing of the new project openings is presented in Table 0.5 and Table 0.6 for highways and railways respectively. In addition, the proposed new projects for both the road and rail sector are shown in Figure 0.6. Table 0-5 Assumed highway network Highway Network Link Opening Year Mae Sot to Tak 2026 Tak to Phitsanulok 2037 M2 M4 Phitsanulok to Phetchabun (Lom Sak) 2037 Phetchabun (Lom Sak) to Khon Kaen 2037 Khon Kaen to Mukdahan 2032 Nakhon Sawan to Korat 2037 Korat to Surin 2032 Surin to Cambodian Border 2035 Bang Pa-in to Nakhon Sawan 2024 Nakhon Sawan to Phitsanulok 2029 M5 Phitsanulok to Uttaradit 2033 Uttaradit to Lampang 2037 Lampang to Chiang Rai 2027 Chiang Rai to Border 2027 Source: Preparatory Survey on the Bangkok Chiang Mai High-Speed Rail Development Project 137

139 Figure 0-5 National traffic zone system Table 0-6 Assumed railway network Railway Network Link Opening Year Speed Lopburi to Nakhon Sawan to Pak Nam Pho km /h Double Track Pak Nam Pho to Denchai km/h Denchai to Chiang Mai km/h Den Chai to Chiang Rai km/h New Routes Hua Dong to Kamphaengphet to Tak km/h Source: Preparatory Survey on the Bangkok Chiang Mai High-Speed Rail Development Project 138

140 Figure 0-6 Assumed Transportation network (Left: Highway, Right: Railway) Airport Special Generator Within Bangkok and the eastern provinces, there are three significant airports namely Suvarnabhumi, Don Muang and U Tapao. Of these, it is expected that the ridership of the HSC service will be a function of the performance of Suvarnabhumi and U Tapao. These airports are included in the transport analysis as special generator traffic zones. In 2015, there were 43.2 annual million international passengers18 using Suvarnabhumi airport. In 2007, there were only 31.6 annual million international passengers. This is an observed growth rate of nearly four percent per annum. This growth19 is built into the demand forecasts for HSC. In 2013, only 3 million annual passengers were recorded as using U-Tapao airport, a significantly smaller number than at Suvarnabhumi airport. U-Tapao has no direct link to HSC Enhancement of station environs The additional population and economic activity associated with the new stations is stated earlier. In addition within the framework of the transport model, there is coded into the model additional connectivity with the surrounding environment to ensure good regional connectivity to all HSC stations Trip Generation The Trip Generation Model generates the volume of Trip Production and Trip Attraction in each traffic zone. Since a national Origin Destination interview survey has not been conducted since the development of the national transport model in Trip generation was upgraded during previous studies and is presented as follows for the three trip purposes namely: 18 This is an extract from Airports of Thailand s, Sustainable Development Report of This growth rate was reduced to 3.5 percent for this analysis implying that by 2042 that there would be approximately 100 million annual passengers using the airport

141 Where: = ,000 = ,900 = ,500 = ( / ), Private = ( / ), = ( / ), = h (1000 ), = h h ( h. ), = h (1000 ), = h which is linked to GPP per capita via elasticity. = 1, 0 h. From the above equations, it is estimated that the total number of trips along the HSC corridor in 2022 and 2042 is approximately 296,000 and 756,000, respectively as shown in Figure 0-7 Thousand trips per day by category Yr:2022 Yr:2032 Yr:2042 Business Private Tourism Figure 0-7 Total trips along the corridor Trip Distribution The trip volume between each zone is estimated using the following gravity model. The adjustment factor is estimated from the actual trips across screen lines within the Kingdom. ( ) = ( ) where: =, =, =, =, 20 Trips within the Influence Area excluding trips internal to the Bangkok Metropolitan Region. 140

142 = exp ( ), =, =, = , = Modal Split for the Commuter Corridor (1) Modal Split Model Based on the willingness-to-pay survey, part of the SP survey, a multinomial logit model by trip purpose is developed to estimate the model split. The proportion of trips between any two zones by trip purpose that choose Choice 1 out of the subset of choices is given by: = exp ( ) exp ( ) where: P in : Possibility of choosing transportation mode i of choice set n V i : Utility function of transportation mode i (time and cost) Vi = ai ln(travel Time VOT) + bi ln(travel Cost) + Const a and b : Parameters of explanatory variables i : Transportation mode VOT : Value of Time Const : Constant Value The choice set is presented in Figure 0-8. The mode split parameters by purpose are presented in Table 0-7. A similar ramp up 21 procedure, similar to that adopted for the earlier Chiang Mai to Bangkok high speed rail is also included at this point. Person Trips Car Bus Rail Air HSC Figure 0-8 Modal split structure 21 These passenger forecasts thus also include the impact of generated traffic and the Ramp Up phenomena. Ramp Up is the phenomena whereby transport models tend to over- estimate new high order transport. 141