A number of Southeast Asian countries are seeking to update their rail networks to high-speed lines. This is expected to significantly benefit state and regional economies. For some states, however, the costs might outweigh the benefits.
A number of high-speed rail projects have been proposed in Southeast Asia, which will modernize the region’s out-dated rail networks. It is believed these projects will improve current infrastructure, vastly reduce travel times between major cities, and have a beneficial impact on regional economies.
However, high costs and organisational problems have succeeded in delaying these projects. There also remains some debate as to whether high-speed rail is always the best option. What benefits can high-speed rail bring to regional economies?
High-Speed Rail: The Facts
According to the International Union of Railways (UIC), there is no single standard definition of high-speed rail. This is because high speed is a combination of infrastructure, rolling stock and operating conditions, all of which constitute the “system.”
Infrastructure relates to new lines built specifically for high-speed travel, and equipped for speeds generally equal to or greater than 250 km/h, or for upgraded lines, equipped for speeds approximating 200 km/h.
Rolling stock refers to high-speed advanced technology, such as air brakes, aerodynamic designs and engine technology, designed to guarantee safe travel. According to the UIC, performance levels, safety, quality of service, and cost all depend on there being a compatibility between the characteristics of the infrastructure and those of the rolling stock.
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There are also operational issues to be accounted for, such as financial, commercial, managerial, and training aspects. High-speed rail therefore places significant demands on investment, technology, industry, and the environment.
However, supporters of high-speed rail believe these demands are offset by its efficiency, ability to yield greater customer satisfaction, and its ability to achieve greater territorial cohesion.
Why Southeast Asia?
A number of Southeast Asia’s rail networks are in drastic need of modernization.
Vietnam’s rail network consists of seven lines, all of which are single track, and most of which are in need of upgrading. According to global management consulting firm AT Kearney, Vietnam’s poor infrastructure is hampering its economic growth.
It is claimed that improved freight infrastructure will launch Vietnam onto the global sourcing stage. There is currently no railway between Vietnam and Cambodia or Laos, the latter of which have their own dilapidated railway networks.
Improved infrastructure in these countries will help forge closer trade ties with neighbouring countries, which in turn will boost economic growth and help alleviate poverty.
Thailand suffers from a similar under-investment in its rail infrastructure. Derailments are common, and poor cross-country connections have placed a strain on the capital, Bangkok, which is densely populated and the source of the country’s economy.
A better rail network would help ease this pressure, spread some of this wealth and also boost tourism. Indonesia has similar congestion problems, with connections between services poor and certain cities difficult to access.
While Indonesia’s annual growth in 2014 was 6-6.5%, this could be as high as 7-9% if basic infrastructure was improved. In 2010, Malaysia launched the Economic Transformation Programme, which aims to transform Malaysia into a high-income nation by 2020.
Improved connectivity between Kuala Lumpur and Singapore was a designated project under this program.
Bids for High-Speed Rail
Improved infrastructure can therefore provide numerous economic benefits for these Southeast Asian states, including increased GDP, trade, and tourism.
Vietnam has announced it will move forward on a North-South high-speed rail network, which has been at the planning stage for a number of years. It was rejected in 2010 when it became apparent that the US$56 billion project represented half of the country’s GDP at that time.
The latest costs have not been revealed.
Recognising the lucrative market, both China and Japan are competing for high-speed rail in Southeast Asia. Serious negotiations have been underway in Thailand. In May 2015, it was announced that Japan would help develop three high-speed rail networks in Thailand.
The Thai government is also in talks with China to develop a joint rail project. China, which has more than half of the world’s high-speed rail track, has proposed a network from Kumming in Southwest China to Singapore.
The project, part of China’s “One Belt, One Road” Silk Road initiative has proposed three routes from Kumming to Bangkok: the Eastern route via Vietnam and Cambodia, the central route via Laos, and the Western route via Myanmar.
The construction of a high-speed rail network has also been proposed between Kuala Lumpur and Singapore, which would make up the southern portion of the Kumming-Singapore rail network.
The Kuala Lumpur-Singapore rail network is expected to be in operation by 2020, with both Japan and China expected to offer competing bids for construction.
Is High-Speed Rail Always the Best Way Forward?
However, it is not clear whether high-speed rail is always the best option. It was reported in June 2015 that China had decided to go for a medium-speed rail network through Thailand to support cargo transport.
Similarly, Indonesia turned down a lucrative offer from China for a high-speed rail network, and is instead soliciting bids to build a slower network that would cost significantly less.
Indonesian officials have confirmed that high-speed is not suitable for the relatively short distance the network will be operating over, and a medium rail would only take 11 minutes longer but would cost 40% cheaper.
This suggests that for some countries, the costs of high-speed rail might outweigh the benefits. For many states in Southeast Asia, improvements in infrastructure could be made without overly burdening the economy to achieve them.
Medium speed rail networks would represent a massive improvement of current rail infrastructure in the region, and would bring with it the economic benefits without the heavy costs. While it might be too late for some states, others might well consider taking Indonesia’s lead and question what is necessary, and what is best for the economy.
