Northern Railway Project For the Future Sustainable Economy

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Northern Railway

InvestMaN is back with another interesting news to share with our readers. Recently, the State Railway of Thailand has revealed details of the 2 upcoming projects for the development of the Denchai – Chiang Rai – Chiang Khong Railway and the Ban Phai – Maha Sarakham – Roi Et – Mukdahan – Nakhon Phanom Railway. Large group of people in a variety of areas are expecting to benefit after this train project is complete, considering the massive size of the development plan. InvestMaN sees this news as a very promising story which might interest the general audience, especially people residing in the north of Thailand. Today we are going to dive into the details on one of the two projects first, which is the Denchai – Chiang Rai – Chiang Khong Railway.

Background

Den Chai – Chiang Rai – Chiang Khong Railway is one of the projects of the State Railway of Thailand. It is one of the two extensions of the Northern Railway. Originally, the project was scheduled to be built in 2017 but was postponed in 2021. After official approval was passed on, the Ministry of Transport has urged the State Railway of Thailand to launch and open bidding auction for contractor by 2021 as well as begin the expropriation (eminent domain) process in acquiring the necessary land where constructions are to take place, with the goal to open for service by 2028.

 

Project details

  • Double-track type railway
  • The overall route is a combination of ground level and elevated railway
  • Connecting between Den Chai – Chiang Rai – Chiang Khong, with total distance of 323 kilometers
  • Construction investment identified at approximately 72,920 million baht
  • The construction is divided into 3 contracts –

-1st Contract : Den Chai – Ngao, a distance of 103 kilometers, value at 26,599 million baht
-2nd Contract : Ngao – Chiang Rai, a distance of 132 kilometers, value at 26,913 million baht
-3rd Contract : Chiang Rai – Chiang Khong, with a distance of 87 kilometers, value at 19,406 million baht
-* Each contract has a construction period of not more than 72 months (6 years) after the land needed for construction has been delivered by the state.

  • At present, the project is in the middle of the auction or e-bidding process of procuring contractors for each contract. Announcement of the winners of the bid is scheduled on July 9, 2021.

Impact

  • The project’s main objective is to improve the logistics of northern transportation as well as support the construction of Chiang Khong Logistic Center which will connect the North-South Economic Corridor trade from Thailand to Laos, Myanmar, Vietnam and Southern China.
  • Help drive trade between the border and the special economic zone in Chiang Rai Province which the government is attempting to stimulate. 
  • Support the hospitality and tourism industry in the northern region with the availability of trains for both domestic and foreign tourists.
  • Indirect impacts also include the price of land around or in the vicinity of the upcoming train stations, which are likely to increase more or less.

        This project is considered to be very good news for the people of the north. It has been a long time since the region has seen a project of this caliber, in line with the strategic route, “R3A” for economic transport of goods that came from China through Laos channels to connect with Thailand’s Chiang Khong area. Let’s also hope that it will help stimulate the tourism industry and the overall economy when this ongoing COVID crisis is well and truly behind us. In addition, this also presents opportunities for real estate investors looking to invest in land development in the next 5 years, in which the train is expected to be in operation.

         Anyway, before going forward with the public project’s construction of this magnitude, an in-depth study of the project feasibility or due diligence must be performed in order to ensure the intended outcome, a possible impact on the environmental aspect. These studies include an analysis of the project location and site selection. Prospec Appraisal is happy to provide valuation services and consultations for land appraisal or even business valuation for owners. Moreover, we also offer additional service on project feasibility study and site selection.

Credit source: Thansettakij
Credit picture: Wikipedia

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