Rail Professional Interview

Over the last five years, our editor Sam Sherwood-Hale has spoken to industry experts, decision makers and thought leaders from across the Asia Pacific region, here are some highlights

financially in the short term or that it functions for the population as it expands? For example, some contractors have what I call the inkjet printer business model, the initial cost is very cheap but if you want to extend the system or do maintenance the new parts are very expensive, so this might not necessarily be a success depending on what the goal of the project is. If you look around the world there very few rail companies that make a profit from carrying passengers only, they have other revenue streams from property. So, planners need to develop new schemes to make money from the land that they own and monetise the customers that come with the business of transportation.

In the UK, the franchise contract tends to be five or seven years whereas an infrastructure owner has to think 20 years down the line in terms of planning. There is this mismatch between owner and operator. The railway is not like a mobile phone where you buy a new one every year, the machinery has to last decades.

If country A wants to buy infrastructure from Japan or China, the team has to have the skills to manoeuvre within the negotiations. Making money in the long term requires accepting certain standards.

”This is a city-wide problem, to promote railways you need multiple policies that are outside of rail but encourage its use, Beijing used to be a bicycle dominated city and then the car became king, now there are many lines and more people use them.”

The Government had a car rationing system so depending on your number plate you could only use your car on certain days. We’ve been discussing this in the workshop, access and easiness of the railway (getting there and then getting to where you need to go). Bike parking spaces in Beijing have become much more ubiquitous as there are a lot of bike rental systems around the stations.

How demand will change over time depends on the country, for city mayors now I would recommend securing land for potential rail projects. As long as the land is there to build on its much easier to plan and make projections, going through land acquisition can cause complications to this process.

Generally speaking, its very difficult to develop the people who have the necessary skills to maintain the asset properly, in the UK and Japan there is a history that has steadily built to a standard that is at the level it needs to be to maintain the infrastructure.

Longevity requires constant maintenance and asset management gets tested the longer you keep the system alive, and that’s where the skills and required standards come in to play. The Asian Development Bank invests a lot in infrastructure, but it could also think about people development. Some international agencies do this but only on a small level which isn’t enough to switch culture.

Passenger flow and headway is not a problem in Bangkok because the frequency is not as high as other cities. The more trains you try to run the more managing passengers becomes a bigger challenge. The new lines are avoiding intersections of passenger flow in other directions as well.

As a Japanese civil engineer I can say that Japan’s biggest contribution in the last century is the Shinkansen but actually that technology is just a small extension of the existing technology. The main contribution that came from that project is the business model. For the 21st Century I think we need a new business model and railway concept that will lead to innovation.

The Ministry of Transport is responsible for all transportation modes, marine, air and land transport including railways. The Ministry of Transport shall directly supervise two railway state-owned enterprises consisting of the State Railway of Thailand and the Mass Rapid Transit Authority of Thailand.

The SRT operates the long-distance train and established the SRT electric train company (SRTET) to operate the airport rail link line. The MRTA manages the metro line in Bangkok through the Bangkok Expressway and the Metro public company limited (BEM) which operates the Blue Line and Purple Line and the BTS Company which operates the Pink and Yellow line.

In addition, the Department of Rail Transport (DRT), the new agency under the Ministry of Transport, performs the duty of railway policymaker and regulator for overall rail transport as well as formulating the strategy and development plans of the rail network in Thailand.

The Rail Project Development Office was a division under The Office of Transport and Traffic Policy and Planning (OTP) and upgraded to be the Department of Rail Transport. The DRT was established on 15 April 2019, with the aim of supervising the railway as the regulator. The Department of Rail Transport has five missions. • The first mission is to monitor and evaluate the existing railway infrastructure development projects. • The second mission is the development of the railway through the integration of rail networks for seamless connectivity. • The third mission is to promote the services and safety standards in rail operations. The fourth mission is to supervise the railway project construction to ensure safety implementation and complyiance with international standards. • The fifth mission is to determine the reasonable fare system to be able to promote the use of the railway and increase the density of land use around the station.

All the missions of the Department of Rail Transport aim at achieving the 20 years national strategic plan.

This project is a high-speed rail line that will operate between Don Mueang International Airport, Suvarnabhumi International Airport and U-Tapao International Airport. It will be operated by Eastern High-Speed Rail Linking Three Airports Company Limited, special-purpose vehicles by the consortium of Charoen Pokphand Holding and partners. The distance from Don Mueang to U-Tapao has a total length of 220 kilometres. The total investment is 224 billion baht ($7 billion). This project was implemented by PPP scheme with a 50-year concession, the private sector partner will be responsible for operation and maintenance (O&M) cost, the PPP allows us to reduce the burden of Government investment, the Government shall support only the civil work cost and allow a private company to develop the Makkasan area to be built as the new hub of transportation and centre business.

Thailand’s Transport Infrastructure Development Strategy 2015 – 2022 is the key strategy to promote the railway system and water transport connectivity. For the rail transport sector, there is a master plan to improve the public transport network and service which is named the Mass Rapid Transit Master Plan in Bangkok Metropolitan Region (M-MAP), the goal is to develop a mass rapid transit network in Bangkok and provinces around Bangkok.

The Purple line (Tao Poon – Ratburana) will be opened in April 2026. Currently, there are many projects which are under construction which will be finished after 2020. Once our network is already completed, there will be 14 lines with 366 stations covering a total distance of 559.16 kilometres.

In this country you need to have that, I have been in corporate management since I was 27, I was head of operations towards the end of the Government era in Australia through to the split between passenger and freight trains.

As the railways evolved and all these changes happened, I bought in the aggregate wage system and saw through the period of modernization and then I got the opportunity to come here in 2010 and it was like an Indiana Jones movie – we opened up the cupboards and blew off the cobwebs and got to work.

The railway hadn’t run for two years, so I was COO of nothing really. We had to dig through the mud and get it to where it is today as it’s starting to look like a real railway, we do 44 trips a day now and passenger trains are bedded in and we’re starting to increase our services a week. The Northern line to Poipet is open now. The speeds are still slow, the track is designed for 80kph with an average of 50kph. The speeds are coming up on the passenger trains and today we’re sending a fuel train up there.

The track rehabilitation work was carried out by the Government with a loan from the Asian Development Bank (ADB), the money was intended to upgrade the north and south line, the north was completed, and parts of south were done before the cash ran out. The line was in a worse condition than I think we realised. There was a lot of debate about problems with culverts or drainages or the different types of clay, during dry season the clay is like concrete and then in the rainy season the place is surrounded by water.

In 2011 and 2012 we had some problems with track rehabilitation but by the end of 2013 we were back on top of things. The first few months of 2013 we had trouble accessing the tracks, by the end of the year we ran a train to Sihanoukville with 50 containers, we offered the service for free to try an encourage people to use them.

”The last train to Sihanoukville at the end of the civil war took 28 days because of the terrible condition it was in. Now we have to try and get back the people’s trust and make the case that a freight train is worthwhile for a small or medium company looking to move goods down to the port.”

Back before the war Sihanoukville only had three ships a week so getting freight there on time was essential.

Since 2013, however, it’s going up every year, two years ago I started telling people we were going to run out of wagons and locomotives, and now we are. We have 136 wagons and six locomotives, in reality we need over 200 wagons and ten locomotives to fulfill the orders we have. If those new trains arrived outside today, we’d put them straight to work.

We now do four service to Sihanoukville a day. The northern line we do one a week, but we need to do three a week. People are getting used to the railway and seeing the benefits of being able to get 120 containers on one order all being able to go on one train and arriving at the same time and getting on the ship at the same time. 560 road trucks have to get in and out of the port between 7am and midday and they can’t do it. Logistically it’s a headache and that message is starting to sink in.

The major rail lane coming from the OBOR (One Belt One Road) is the route that links dry ports in Europe with major Chinese cities, a number of these central Asian economies will benefit from the network effect. In the future, there will be a need for our solutions because there will be feeder trains or local trains which will need to be synergized with the main line.

In terms of freight, rail offers real time inventory, it takes 15 days to get to Europe versus 45 days by ship, so even with the higher cost the real time inventory that companies can run cancels out these fears. I believe freight to Europe will dominate the discussion for now but the Chinese economy is going through a transition period, many companies will move their factories to Southeast Asia instead of automating.

When this happens, the ports will be effected but rail will actually benefit from this if the infrastructure is in place to support the growth of exporting companies there.

Integration. In the past, everyone did their own little thing, in the future we have to have an integrated system of control for the track and the train. The more data we can get in real time we can adjust the network dynamically instead of planning a day in advance.

So regional traffic control centres will have to be set up so that freight and passenger trains are all on everyone’s radar, signalling and control and connected gauges. With the exception of OBOR which is building a network linking so many economies, in places like Thailand and Vietnam the major projects

are being built in isolation.

If you remember ERTMS (European Railway Traffic Management System) was legislated in Europe and then each government helped the companies to roll out the system. Everyone understood the value of it, the same thing must take hold in Asia.

Australia has ports on the opposite sides of a huge, round shaped land mass, it’s a simple process to offload containers on the west coast then move them by rail to the east coast. Then road transportation was liberalized, taxes lowered and the routes were changed so they allowed these huge trucks to compete with freight and then rail sunk.

In many Asian countries they are still big on building roads, rail is not seen in the same light, as long as they persist in building roads cheaply and then widening when necessary, rail has no chance. Building a heavy rail is much more expensive than just simply paving another three metres on the side of the road. In Australia they build an airport and then build a railway 20 years later when they think it makes sense, in the meantime they build a road and send buses up it. I was hoping that OBOR would bring this all together, but at the moment its still investment funding for infrastructure projects and not yet at that next layer.

Before we can talk about HSR we have to talk about how rail in Thailand is not functioning as it should. Double tracking the railways is more important because you can already increase the average speed from 30 kph to 60 kph just by doing that. HSR is on the other end of the spectrum, its more for passengers and not freight, I am not saying we shouldn’t do it but we need to improve on the basics first. Geopolitics plays a big part in the game with China, Laos doesn’t have the bargaining power and they’ve ended up giving structural integrity away to another sovereign power. In Thailand we have the bargaining power. The technocrats that go to negotiate all graduated from the UK or USA and they know financial models so there is a level playing field where they can discuss it in an equal manner.

Haha, that was my quote! I told them competing with the motorway in Thailand is hard right now because that’s already so convenient. Thailand has really high quality roads, compare this to Laos or Cambodia and other countries where the roads are so poor they can’t compete with rail. In Cambodia they don’t have enough money to invest in the railways, they can’t do it on their own so money comes in the form of aid which is often insufficient and too late.

I said earlier that every party has to have the desire to see a project through, this is most important in the case of the Kunming to Singapore high-speed railway. The problem is nobody will want to sit all the way from Kunming to Singapore and there are no goods that will travel that distance either.

What will happen is the Singapore to Malaysia route will be busy and then maybe from that same route can continue up to the south of Thailand, then a different route could go from Malaysia to Thailand and then on to Cambodia and Vietnam, finally you could see some traffic within Vietnam and up to Kunming, but nothing will actually go door to door.

So, you can romanticise it and call it a Kunming to Singapore railway but in reality, that’s not the case.

There have been a number of studies looking at inland container depots and logistics plans for that region. The truth is there’s not much activity because a lot of goods in that part of the country are not high in value, so they don’t bring in a sufficient amount of money.

The type of commodities being produced are agricultural, so they can’t pay all the costs involved. If they can find a way to add value, then a logistics and industrial estate would make sense.

”Rail is a public service, so you shouldn’t complain that it runs a deficit, but then freight should not lose money which could lead to cross subsidisation. If freight can’t make enough to cover the loss from passenger transport, the owners could become property developers to maximise value from their land, but then they would need different expertise for that.”

The best example is the Japanese, their stations are all about urban development, you have shopping malls, hotels and restaurants. They don’t look at rail as jut rail itself, they look at it in terms of how to develop the country, which areas and industries need focus.

In Southeast Asia this could be done to help grow catchment areas and set up satellite cities, but the discussion here just stops at rail. In the case of Taiwan, the high-speed rail companies there make money from leasing out offices and retail space to subsidise it, here there is just a unimodal perspective here, there’s no coordination. Apart from Singapore everywhere is struggling with this.