Thailand - Technical report on the Railway Rehabilitation and Improvement Project

No. Loan 88 RESTRICTED This report is restricted to use within the Bank INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT TECHNICAL REPORT ON THE ROYAL STATE RAILWAYS REHAFILITATION AND IMPROVEMENT PROJECT IN THAILAND May 22, 1950 Loan Department  COIF DENTIAL T HA I LA*ND Rehabilitation and Improvement Project of the Royal State Railways of Thailand Scope of the Report This report is based on a detailed investigation of the Thai Railways by Mr. M. F. Ryan, Railway Consultant, wrlho vas a member of the Bank Mission to Thailand. His terrmls of reference wTere to report on the extent of damage suffered by the railw,ay-s as a result of the vwar, the present condition of the railway network, rolling stock and repair facilities and the practical advan- tage to be derived from the irmprovement program submitted to the Bank by the Goverirnent of Thailand. His findings in terms of engineering, operation and fi- nancing are used to make reconmmien&a'tions on the basis of which this project might be retained. Introduction The first rail line was built in Thailand in 1897. At the outbreak of W-orld WFar II there were 3,213 km. of line in operation. In the year 1941, over 7,700,000 passengers were carried and nearly 2,000,000 tons of freight were hauled by the Railxways. Four main arteries radiate from Bangkok, the northern, southern, eastern and north-eastern lines which link up the principal cities of the country to Bangkok along with regions which abound in wood (teak), tin, rubber, livestock and agricultural products consisting mainly of paddy and milled rice. Thailand has no other suitably equipped seaport than Bangkok. Highiways are scarce and were built with the object of feeding the railways rather than Qf competing with them,. Transportation by watervways is limited to certain periods of the year when the rivers are navigable and to regions which are not served by the railwirays. Hence, the Thailand Railvrays practically havres no serious competition in the field of transportation in the areas they serve. For a rich country in constant development which has doubled its popu- lation over the last 40 years, the need of a properly operated network, let alone of nevw rail developments, is most acute. During the war, when Thailand vwas occu.pied by the Japanese, the rail system became the primary bombing target of the Allies. The entire system was effectively dislocated. Twentr-eight bridges includring the 3 largest in Thai- land, 22 principal stations, almost all the repair shops, 505' of the rollin, stock and an unspecified amount of various equipment, buildings, staff quarters, vwater tanks, signalling apparatus, etc., were completely destroyed or lost for service. Post-war efforts to restore the system and repair the damage have been hampered by lack of organization, lacl: of finances, materials and traied perT son-nel. The restoration of the railway network and its se1nrrice to the econpmy of Tlhailand is an essential that zaust be achieved before the country can re- gain its economic vigor and fully develop its resources, L ...  The Project A loan has been requested by the Thailand Government to enable the fol- lowing objectives to be attained: a) To replace structures and equipment destroyed or damaged durin; the war. (Rehabilitation). b) To make good arrears of maintenance that resulted from inability to carry out this work during the war and in subsequent years. c) To provide for an increase of traffic in consequence of the growth of population and of the development of the Kingdom. d) To provide a nevw access line to the Korat plateau in order to open up a new agricultural region. (This ob- jective was added by the Government to the initial project subsequent to the arrival of the Bank Fission to Thailand), In the post-war period, a certain amount of rehabilitation has been un- dertalken. A number of temporary workshop buildings have been restored or erect- ed and equipped with such machines as could be obtained. Coach ancd wagon re- pairs are being effected, but under very inefficient conditions. Temporary structures or ferries afford a restricted service where bridg-es are out of com- mission. Temporary buildings are serving for sta-tions. To replace the roll- ing stock that .was destroyed, the Thai Government purchased with tihe proceeds of a loan fromi India and the U.S. 68 steam locomotives and 675 freight cars. It also purchased 70 locomotives and 1,349 freight cars in varying stages of repair, on the liquidation of the Japanese built railroad into Burma. To alle- viate the situation still further, orders were placed in Japan in 1948 for 5o steam locomotives, 120 coaches, and 500 wvagons, wvhich have by now been deliv- ered and are in operation. These efforts to restore traffic have just been sufficient to maintain the system in operation, but it can be appreciated that the railways are not functioning normally. Passengers are travelling in dis- comfort in tra-ns that are grossly overcrowded, very slow and unreliable. There are chironaic delays in the transport of freight and non-availability of freiglht cars whiiich have a detrimental effect on the business of the country. Finally, because of lack of repair facilities, not only arrears of maintenance are not being caught up with, but lnormal repairs are not properly attended to, resulting in a gradual destruction of all the equipment. To correct the situation and to expand the railway operation, the proj- ect is sub-divided into the following sections: a) Procurement of additional locomotives and rolling stock and repairs of exi.sting vehicles. b) Rebuildinig and re-equippingf, the main worlkshops.  -3- c) Reconstructing the principal bridges. d) Rebuilding semi-permanent bridges with steel girders. e) Relaying track. f) Restoring damaged signalling equipment and adding new installatiorns. g) Erection of buildings and staff quarters. h) Constructing the Korat Plateau access line, Technical Details a) Rolling Stook Locomotives Prior to the war, the Thai Railways operated 186 steam locomotives as well as 21 Diesel locomotives and rail cars. (2 Diesel locomo- tives were subseqcently acquired in 1948). All the st,eam locomotives are fuelled with wood as there is very little coal in Thailand. Due to the low mileage betweeni fuelling stops inherent to wood burning, diesel traction has the advantage of speeding up passenger schedules. A steam locomotivre burning fuel oil would also enable to achieve much larger runs and the refuelling time would be much shorter, but at prevailing prices for wood and fuel oil, it wrould cost 4.1 bahts per kilometer for fuel as compared with 1,9 bahts for an engine burning hardwood. In oonmparing the Diesel versus the steam locomotive, the ann1aal maileage is important in calculating the depreciation rate per mile because of the rmuch higher initial cost of the Diesel. Since the railway is still in a state of disorganization, the figures for 1941 were used as repre- senting a truer picture than the present ones. In 1941 the average kilometer run per Diesel locormiotive on the line was 58,0OO k,n for' steam 47,800 km. On the basis of current figures for fuel consumption and fuel prices for hard- wood and diesel oil, the relative fuel costs per kilometer have been found to be 1.9 bahts for wood and 1,2 bahts for diesel oil. Assuming the life of both classes of enginies to be 40 years and the interest on the investment at 4% per annum, the comparative operating costs, excluding maintenance are: Cost per kilometer Die-sel loc66 st;am i(e Cost Item motive(bahts) motive (bahts) Fuel* 1.2 1.9 Interest and depreciation 2Rl o,6 Total 3.3 2.5 F Foreign exchange for imports of fuel oil is sold by the Bank of Thailanid at the official rate,  These figures show that under present conditions, the operation of Diesel loco- motives would be more expensive than steam locomotives. It must also be con- sidered that there are at present no Diesel engine repair shoFsand that 11 of the existing Diesels are out of service avwaiting repairs, At a future date, when bridges have been restored, greater speeds permitted, workshops rehabili- tated and a considerably- higher mileage rate per locomotive achieved (which makes Diesels an economical propositiorn in other countries) the purchase of new Diesels might be warranted. It would allow for an increase in the conmmer- cial speeds and for the haulage of heavier trains. At the present time, only the purchase of steam locomotives is to be considered. Exhibit I showvs the present steam locomnotive situation. At the end of 1949, there wiere 367 stearm locomotives on the books of the raillway,of which no less than 158 were out of service for various reasons. This represents a percen'tage of 43% of out of order locomiotives, a very badl showing Jindeed. The correct approach to a situation of this kind is to provide for proper re- pair facilities and to reorganize the maintenance work. Howrever, the present condition of the repair shops leaves no hope for relief vwithin the next 2 to 3 years at least. Due to the output from workshops not making good even the current wastage, the condition is apt to deteriorate further and locomotive availability will steadily decline until such time as the shops are in condi- tion to overhaul a s-ifficient amount of engines to balance the current wastage and ultimately to catclh up with arrears. To tide over the critical period, 50 xnew steam locomotives will be required in addition to the 50 locomnotives ordered in 1948 in Japan and recently put on the line. The estimated cost of these engines is about one quarter of the price of Diesel locomiotilves. Passenger Cars - The situation of the passenger coach stock is charac- terized bT-Vt[6 factors: rar losses of coaclhes were insignificant, and post- -war passeiif-er traffic has increased about 3.25 times in the period between 1941 ancd 1248. This means that the railways have to cope wvith aln entirely niew situtation vwhich does not result from a loss of equipment but is due to an ab- normal demland for passenger transportation. Before deciding wrhrether this si tuation reflects a permanent change in travelling lhabits or is largely due tct the very low prevailing passenger rates, the railiray management is waiting to see the effect of its resoluition to double the passenger fares. In the meanti-me, to make provision for this unprecedented influx, the railway has had to resort to emergency measures. any of the 3rd cl,ass coaches =n service are being used for 2nd class passengers and 155 covered goods vragons have been trarnsferred to 3rd class passenger work. This step is far from rmeeting the situation; oni every mixed train there are now from 2 to 6 cattle wagons or open cars filled with passengers. Exlibit 'L shows the coaching stock position. Of a total of 49S2 coaches,107 aze under or wraiting repoairs and 251 vehicles are 30 years or more old. In 1Q41 there were 580 passengers carried for every seat in the coaching stock; at present the ratio is 1 to 1,1l40. In order to restore the situation to normal, some hundreds of coaches are required. As an initial step, it has been decided to order 70 new passenger cars, Freight Cars - The number of freight cars now in service is 3,348 as compared to 39-919 on the books in 1940, of which an average of 3,700 were at  5 work (Exhibit I). It will be noted from the table that there are some 2,000 ira-cons set aside which were nearly all procured during the war, of inferior construction and needing heavy repairs, The wAragons in service are in good working order, but there is a substantial decrease in Ywagon utilization. Thus3 in 1919, the average freight moved was 440 tons per wagon, whereas in 1939/4o, it was 550 tons per wagon, wrhich represents a drop of 20S. The wagon short- age which exists on the railways is due more to inefficient -operation than to an insufficient stock of freight cars. The causes are faa>tv distribution, bad scheduling, engine shortage and priorities involving empty mileage. The remedy is to get the bad order cars back into service. Repair work for the time being could easily be subcontracted to local firms, The extra 500 wagons requested by the railways are not justified in these circumstances. Spare Parts - An essential requirement for all the rolling stoQk are spare pcarts7ofwETch there are none at present available. A large a-mount of locomotives and hundreds of wagons are unduly delayed in shops and are out of service because of lack of spare parts. The organization of proper repair work should have top priQrity i.n the program of rehabilitation and operation of the railways. b) Makkasan iReepair Shops The workshops in their present state are only equipped to take care of the maintenance of about half of the rolling stock in service. IWlhen the rail- way is operating to the capacity conceived for the near future, this figure will be further reduced if steps are not talken to remecly the situation. Prior to the war, the shops! capacity for the maintenance of locomotivres was 5 com- pletely- overhauled engines per month; it is now 3 per nmouth at the maximum, and the demand is 7 to 8 if the backlog is to bie considered. Ah of December 1910., the percentage of equipment out of service was; Percentage of rolling Item stoclk out of service Steam locomotives 43% Diesel locomotives 60% Coaches 22% Freight cars 4[2% This condition is indeed bad. A proj-ect for reconstructing and re-eqiuipping the workshops has been prepared that will enable to cope vrith all the require- ments in sight. The work, however, as laid out by the railway, will take four years to complete. At present the temporary buildintgs are overcrowirded, badly lit and fitted out with heteroclite machinery and tools. I'any essen- tial machine tools are laclcinag; a sprinh1.ling of new machines is in evidence, but many are not being used bepause of improper shop organization and failure to schedtule the work.  -6- c) Principal Bridges - Tne country is intersected by innumerable watervvays. The railway, therefore, has been obliged to provide many bridges, of which 1,029 are struc- tures of steel or concrete, the three longest being 444, 262 and 200 meters long, of the 28 principal bridges destroyed during the war, five have already been restored. Twenty-one termporary bridges have been erected alongside of the main structures perrmitting trains to cross at reduced speed, and in two cases, ferries have to be used. Orders have been placed in the U.K. for 3 main bridges an-d in Japan for 20 bridges and for the structural steel re- quired by the railway to rebuild the remairning ones. The temporanry structures delay the operating schedules of the railways; during the flood season, they are at timies covered by water and too dangerous to cross, sometimes for sev- eral days; they are liable to be carried away; their maintenance is an ex- pensive item. d) Secondary Bridges - There are in addition to the permanent bridges and structures, 1,460 timber bridges and I,471 short culverts. W.,here conditions permit the construc- tion of bridges wTith short spans, the practice has been to carry the tracL on wooden trestles supporting four timber beams. These beams have an average safe life of 10 years. Today, with timber at 25 times the pre war price, renewal involves considerable expense. Tt has therefore been decided to replace the beams as they wvear out vwith steel girders and thus provide permanent structures which will not call for constant renewal, It is proposed to renew 337 bridges of this type in the course of the nest 3 years. The weLght of steel required is 6,408 tons. e) Track Re-laying - The Royal State Railways of Thailand have 3,213 kilometers of line, of which 71 kmi. are double track. The gauge is 1 meter. Flat-bottomed rails weighing 50 pounds per yard are enmployed (a few 4o pound rails are still in use). The rails are spiked to hardwoodc sleepers, 1,375 sleepers to the kilo- meter. The average life of the sleepers is 10 years. Stone ballast is used throughout, the depth being 15 cm. below the sleepers. The maximum axle load carried is 10.5 tons, except that, as special concession, 12 tons are allowed on Diesel locomotives. The maximum permissible speed is 60 km per hour. On the wrhole, the track is well miaintained and in good order except for worn and corrugated rail surfaces and y.,ear at the joints in the older material. Since the opening of the railway very little re-laying has been carried out; hence re-laying is largely overdue. For tlhis work various proposals have been exanmined for the choice of a, heavier rail, and finally the economic solution chosen was to use a 6o pound rail. W7ith this rail, axle loads up to 14 or 15 tons are contemplated and spends up to 70 km. per hour iwrill be permitted. 62,750 tons of rails and accessories are reqlired over a period of 5 years to relay 90Q km. of track.  f) Signalling Equipment - Insufficient attention has been given by the railway to safety measures with many accidents as a result of this deficiency. There are over 250 stations dependent on hand signalling. Facing points are not always pad- Tocked; traps are not provided at the end of sidings; work t,rains occupy the main line writhLout the protection of a token. Fortunatelyr speeds are low and there are few passenger trains running at night; this reduces the risk. Bangkok and fivre other stations were protected by color light signals which were all heavily daamaged during the war. These must be restored and new un- derground cables and batteries installed. Vlechanical signallirng installa- tions wiere put outl of commission at 9 of the principal stations. it is pro- posed to make good this damqage and, to provide an additional 31 stations with mechanically controlled signals. Out of a total of 350 single line stations: only 75 are equipped wiTuh block inst.ruments and miost of the trairn service is controlled by telegraph train order. Many cases of accidents have been due to this lack of essential protection. It is important that all rema.in- ing stations be equipped with block instruments. g) Service Buildings and Staff Ouarters - The rehabilitation of stationis and locomotive run4i.ng sheds is essen- tial for the oroper operation of the railwTays, and the rebuilding of staff quarters highly advisable. These itens, estimated at 4o.8 irallion balfts in local currency, do not entail any advance frorm the Banlk. h) Korat Plateau Access Line - There is at present only one line serving, the Korat region. Over a distance of 55 ka, on the mountain section of this line, very severe gradients and sharp curves create difficult operating conditions. The speeds of the traini have to be r,educed and accidents are frequent. The line wrould not bear an increase of the present traffic which can be expected with the dev- elopDrient of thle I!orat plateau. Means of relief, such as doublirg the track of thIe existing line for a distance of 55 km. or m-lodifyirng the rolliing stock in order to haul heavier trains, have not been seriously considered because of the decision of the railways to coinstruict a new brancli line. This lilne is part of a lQng range program for tlhe extension of the network. FVork consisting mainly of earthworks and. sor;ie bridges hlas been started on a line 262 k-m. long from Kaengkoi to Jua Yai, This branclh will ascend to the Korat Plateau and is inltenided to open up a section of that region not tapped by the existing main line. Besides opening up new territory, this line will serve to eliminate the bottleneck that is forminag on the existing line. The advisability of the new con5truction rests, howeveer, eintirely on the economic development of the Korat region. No data have been submitted on the tracing of the new line and on the expected traffic it will bear. Estim!iates of the linets revenue thus cannot be made. Preliminary information, however, shows that large quantities of cattle, rice and timber could be delivered froni this region to Bangkok for export after the new line is built.  -8- Estimated Cost of the Project Based on more recent cluotations and lower prices tendered by Japan, the railway authorities have submitted amended estimiates Lor the projects pres- ented to the Bank. They have also stated that they have made con*mitrnents for the i.mmediate supply of some of the materials included in the project. The original estlxmate in the equivalent of 4';33 .4 million for the imported compo- nent has nowT been armended to 4'23.2 million for the same scope of supplies. Particulars are set out in Exhibit III,T vrhere a breakdowrn of the new esti- mates and commitments is given. In addition to this sum, the loreign ex- change cost of the oonstruction of the new Korat line is estimated at ~.d'6.2 million bringing the full amount requested to a total of 4;'.29,407,9Q0 sub- divided as follows: E8ti,matod Cost in Foreign Currency Eqivalent to Dollars Equipment Open Commitment Equipmentv for the purchase of which the Thai Government has undertaken commit- ments 8,379,970 Set aside for the purchase of Diesel locomotives. (It is reported that ne- gotiations are being completed to place the order in the U.S.) 5,72h,o000 Korat Line 6,192,700 Remainder of Equipment 4,759,230 Remainder of rail renewal -,352,ooc_ !;15,303,930 ,14,1O3,970 The expenclitures in local currency are estimated at: For the Korat Line . . . . 107,66h-,500 bahts For the remainder of the project . . . , , , 212_,051,800 it Total . e . 0 bahts Scheduile of Expenaditures The tables, Exhibits ITV and V, give the brealkdown by years of the foreign and local cur-'rency expenditures necessary to finance the projects submitted to the Bank by the State Railways and a4so the Korat access line, which was submitted ',ater. The f'igures given are the amended ones as a re  9- sult of lower quotations received subsequent to the original project. The expenditures in foreign currency run ov'Qe a period of 4 years, and the local expenditures over 5 years. Organization, Management and O-eration a) Capital Structure and Revenue The eintire capital of the railways of Thailand is subscribed by the State wahich is the sole owner. On Jarnuary 1, 1950, it wvas 277,137,356 bahts. The net earnings of the railway are credited to the Treasury and are treated as part of the national revenue. The railway is a department of the I-inistry of Cormmunications and its financial procedures are subject to rules and regu- lations controlling the activities of all government departments. The gross profit progressively declined from 29.5 million bahts in 1946 to practically nothing in 19119. The revenue receipt and expenditure account gives, howwrever an altogether false picture of the operationl of the railway. The heaviest item of expenditures, namely salaries-wages, is only debited with a fraction of what is paid out to the staff. The balance is covered by a contribution made by the governmentb, terined "cost oL living alloance" which has been in- creasing progressively since 191t3, Railwlray accounts cannot be published un- til passed by the governrment auditor. He is far behind in his work and ac- counts for 1947 are still being audited. The railway has ceased to publish an annual report. b) Organization - The executive head is thle D)Ltec`bor General, He reports to the Minister of Com.m^unications, but also receives directives and instruction from othier memberS- of the Cabinet. There is a Railwray Board, but its functions are pure- ly advisory and it rarely meets. Civil Service Staff Regulations and rates of pay are in force. Purchase of materials and sales of discarded stores and equipment are delayed by lengthy and complicated procedures. As a result, there are few signs of initiative or organized attemipts to give proper public service. The most is llot made of' the mllaterials available. c) Labor All permanent railway employees are Civil Servants. The men in the workshops have a 48 hour week; operating staff work longer; track coQlies work 10 hours a day, seven days a week. A coolie earns 300 bahts per month, a mechanic 580, an engine driver 750. There are no railwTay trades unions. Salaries of trained mechanics in the shops are loVw in the face of competi- tion from private industries. The index of the cost of living has increased from 131 in 1941 to 1187 in November 1949, (Basis: 100 in 1938/39). 1.7hereas the coolie receives 15 tines his pre.wvar pay, officers of the superintendentts grade have only had their salaries trebled.  - 10 - d) Traf fic and Tariff - In the past eight years the number of passengers conveyed by train has m.lore than trebled, Among the reasons for this increase is that third class passenger rates in 1949 were only 35," above the pre-vwar rates, vrhile the cost of living had increased 11.5 times. It is the policy of the governi ment to keep the rates low in order to reduce the cost of living. The ef- fect has been to stimulate travel, In the post-war period, the passenger rates have even been reduced on two occasions with an immediate slharp inacrease in travel: Pahts per kilometer 19141 19144 1b 19L77I 1950 Class Pre-war August February April Mjay Proposed First o.o15 - 04200 0.150 0135 0.200 Second 0.030 - 0.100 0.075 o.o68 0.100 Third 0.020 - o.o4o 0.30 0.027 0o050 No. of pas- sengers per year in thousands 7.730 11.091 l1.1141 18.061 25117 Inidex of cost of living 131 470 1,07. 1,1413 1,291 1,187 In accordance wi.th this table, the proposed tariffs for 1950 are the same in 1st and 2nd class as the 1946 rates and in 3rd class are increased by 25/. vean this increase still leaves the tariffs very low as compared to the gen- eral inwrease in tlle cost of living. It had been decided to apply the new 195Q rates as from K:arch lst and the present status is not knovrn. The freig-t traffic has dropped to an all time low immediately after the war due to the complete disor.arnization of the railway trainsport. It has pro- gressirely increased in lihe post-war period, bui has not reached the pre-v:ar level of 1939/140 when 2,060,o00 tons of goods vrere convreyed, against 1,b.5oo,0oo tons in 1949, It seems that the very heavr passenger movement is taxing the resources of the operating departmnent to the detriment of the freight traffic. The public is complaining that the railwray does Jlot furnish viagon-s vlei want- ed for bulk transnort. The traffio of rice, controlled directly by the zli- nister of Commerce, enjoys a special priority; to e;xpedite its rmiovement, wagons are retiurned empty to loading points* The wagon conltrol system ir force is totally iinefficienit. Freighat tariffs havre been variously increased since 1941. In 1943, rates by the w,agon load were increased by amounts varying from 10 to 50 percent, In August 19414 all goods and livestock rates wrere increased by 107,.X. The aniount collected per ton kiloriieter in 1948 was 14007, greateer than  irn 19L1 due to higher tarlffs and to the application of priorities resultLng in the conve-ance of a greater proportion of goods of a high classificationl. The figures for l948 also s5o1r that the largest post-war increase in goods conveyed is for packages where the tariff increase is the lowest, It Wcas pro- posed to increase from January 1, 1950, all rates on export goods by 2005, leavinig the tariffs on foodstuffs as they are, but popiliar pressure on the Cabzinet has led to the cancellation of this measure. F i n d i n g s a) Rolling Stock- This item covers the purchase of 30 Diesel and 50 steam locomotives, 70 passenlaer vehicles, 500 freight cars and spare parts for repairs of exist- ing rolling stock. Locomotives - If the railwa-y possessed a properlr ecluipped repair shop and was tip to date witlh its locoo..otive maintenance, the quantity of eng,ines on the books, if in .good orler, ould be more than sufficient for traff'ic re- quiremients and the purchase of near loconotives would not be needed. As it is, the workshops, far from being able to make good arrea-rs, are not even able to keep pace wiith current wastage. Diesel locoraotives hc>ave been found uneconomical under present conditions of operation; furtniermore, thlieir pur- chase price is 4 times that of steai, enaines, For these reasons, it has been found inadvisable for the railways to purchase Diesel lccomotives, but the purchase of 50 steam locomotives is justified by the necessity to tide the system over the critical period durLng which the repair shops will be recon- ditioned and reorganized. Passenger Oars - The increase in passenger traffic and the shortage of third-class coaches fully warraints the purchase of 70 passenger vehicles. The naumber is even considered far from sufficient to meet the deficiency. Freight Cars - Since the freight tonnag,e is now only 77% of the prewar figure andsTHce there are 2,000 wagons set aside which are capable of being repaired at a rate conmmensurate with any probable increase in tonnage, the provision of additional new 500 wagons is not justified. The solution is to be found in better traffic organization an6 in subcontracting the repairs of freiglht cars, as soon as essential spare parts have been purchased. Spare Parts - The provision of spare parts for the reconditioning of worn-out or d-amaged equipment is of vital importance. A considerable qnuanatity of rolling stock could be put back into service, even wiith the existing faci- lities, if urgently requiyed parts wTere available. The sum allotted to this purchase b1y the railviay is nob very importuant and bhe administration would have acted wisely in ordering some of those pcarts a long time ago.  - 12 b) Rebuilding and Re-ecluipping of the Workshops - The rehabilitation of the workshops should be considered as the most important item of the project. The inadequacy of the partially restored re- pair shops to take care of current maintenance will result in an accumiula- tion of maintenance arrears with progressively fL'ewer vehicles available each mionth. This situation can eventually lead to a complete collapse of opera- tions, Purchase of new rolling stock is not the remedy which mnust be neces- sarily sought in the proper re-equipment and reorganization of the workshops. As a tempo-rary measure relief might be found in shipping locomotives to Japan for a general overhaul there, but no quotations for repairs are available to iinvestigate the possibilities of such a procedure of maintenance which is un- usu,al in railway practice. Tn order to take advantage of modern methods in design and operation, it has been suggested to the Thai Government to employ a firm of specialized consulting engineers wi.th experience in shop lay-out to prepare plans and lay-out specifications for the equipment of the MIallkkasan Yorks. In addition, an adequate staff of trained mechanics a-nd supervisors must be employed. c to g) - The program of the railwray for the Reconstruction of Dridges, Re-laying of Lrack, Restoring of Signalling Equipmenti -and-RBeFscuctioi of 3uildings (aFs part oflocal expses) as been ftound bo be adequat-e to the immediate requirements for the rehabi litation of the railway systuem. h) Korat plateau Access Line - Preliminary information shovrs that the rLew line woulcl open up a new region with possibilities of exports of rice and timber from this region. Ad- ditional data must be supplied by the Thai Government on the estimated ton- nage which will be carried by this line in excess of the freight which will be diverted to it fromn the main Iorat line. Upon receipt of quantitative jus- tification for the new line and data on its operating cQsts, an estimate of the line's revenues for the next years can be made. Failing this information, the project can be justified only on the basis of the general economic dev- elopment of the country. The NJortheast area offers the best possibilities of development and the new line is intended to open up a section not tapped by any existing line. Justification of the Project Tlhe railway is uniable to furnish the public with a service in acoord- ance vrith re-v;:ar standard. If the project submitted by thle State Railways is carried out in its m-iajor requests, the heavy damage infAicted duri-rg thie war will be made good. The result of the investiment wvill be not onlly to  - 14 - Commitments already Item Amount in foreign made by the Tlhai Governl- currency ment oo 000,000 S 000,000 Rolling stock 3 ,75 3 .75 5 Spar e parts 0.54 - Repair shops 2,13 0,31 i3ridges 3.30 2.02 Rail renewal 5.7lh 1.39 Signalling apparatus 1.12 Korat Line 6.20 Total 22.78 7.47 * Comrmit:maents for freigfht cars and Diesel loconotives are not included. A. N1*. Saitzoff  13 restore the railway to its prewar carrying capacity but to erxable it to handjl.e the greater volume of traffic necessitated by the increased population and remove an obstacle to the expansion of the export business oL the country. R e c o mm e n d a t i o n s a) From a technical point, of view, the rehabilitation project of the Royal State RailwArays of Thailand covers the immediate requi.rements of the railwray for equipment and necessary materials. Under the present set-up, hiovwever, the assistance asked from the Bank vwill not serve its purpose as it vrill be impossible for the railway to operabe efficiently or economically as at present organized. The State Railwray is nfot run as a self-governed enterprise, but is treated as one of many governLment departrments. Conse- quently, the accounits of its financial transactions are inextricably mixed up wi th those of the governmient as a whole. The Director General is not free to malke decisions in accordance with the best interests of the enti-er- prise. It is essential that the railway revert to the status it held prev, iously and be constituted as an autonomous entity,, run on commercial prin- ciples, and liberated from Civil Service status. It should be controlled by a Pailway Board which would determine the general railway policy and would report to the Ministry of Cormmunications. The Executi.ve Head of the railwray would receive his instructions from the Board, and he should be an experienced railway man. Only under these conclitions does it appear possible to proper- ly reorganize all services of administration, operation, maintenance, sched- uling, etc., and provide for an adequate financial return. It is thus rep- onmended that, prior to considering a loan, there be a definite commitm-lent riade by the Thai Government that they will reorganize the Royal State Rail- ways as an autonomous financial entity under the State. Thi.s commitment should be accompanied by a reorganization program inldicating the schedules for putting the plan in operation. b) 1-Jitli the exception of the 30 Diesel locomotives and the 500 fre.ight cars, the projects subrmitted to the Bank are techrnically necessary for the railway to function properly. c) Top priority should be given to the rehabilitation of' the Makka- san Workshops. The amount assigned to this project should not become firm until an engineering conisultant specializinig in shop layout has made his rec- oxmmendations on the equipment which is needed. d) Prior to considering a loan for the construction of the Korat Plateau access line, additional infor;mation shou,ld be submitted by the Thai Government to justify the need and profitability of this project. e) Subject to the above recommendations, congideration should be given to the follovwing projects included in the program of the Royal state Railvaya:  E X H I B I T I Rolling Stock Particulars Steam Locomotives Second N e w Date Particulars Prevar hanid U7a Tota0l 12/Iho Iqunber on books 186 - - - 186 1941/49 Put irn service - 101 43 72 216 tt Scrapped 28 6 - 1 35 12/1949 Nuruber on books 158 95 43 71, 367 It" Set aside condermned 20 22 - - 42 It It It waiting spares - 9 9 - 18 It ti II t shop repeirs 3- 4 11 4 5 It Tjnder repair 26 13 3 2 li4 12/49 In service 77 47 20 65 209 COACHING STOCK Particulars Quantity Dec. 19o0 De c Y Passenger cars 2614 282 Sleepin.g and restaurant cars 29 28 Reserved and service cars 30 27 Iag,ons converted to 3rd class - 155 Total 323 492 Seats: First class 478 430 Second c'ass 1)502 2,144 " Third class-coaches 11,694 11.392 I Third class, cQrl- verted vwagons 8,o64 Total 13 ,224 22,030 FRrT1GIIT CARS Date Particulars Quantity Dec. 1940 R!ur-ber on books 3,919 1941/49 XTew put in service 939 IT Second hand put in se-rvice 1,393 It Scrapped 355 Dec. 1949 Nimber on books 5,896 Set aside colndemned 94 Unserviceable waiting repairs 1,979 Under repairs 320 Coniverted to passenger ca 155 In service 3,348 - ,&  E X H I B I T II General Statistics Thailand Year 1949 Area, sq. km. 513, 000 I Population 17,600,000 Railways, route kilometers 3,213 It Locomotives, steam 367 TI Locomotives and rail cars, Diesel 23 Coaching stockl h[92 Freight cars 5,896 Numnber of employees 20, h59 1948 Passengers carried, first class 139,048 It I 1 5 second class 6,492,o65 t , third class 18,485,683 I I TI , total 25,116,796 Freight coniveyed, tons * 1,201,048 Train kilom.letres 6,815,ho07 I.I II a passenger 354., 069 Ii II mlixed 3,318,267 " It " , freight 2, 269,!4.86 It II , work trains 8737585 Passengers kiloraetres 1,3079033,977 U Freight ton kilometres (exc.packages) 300,767,506 Dollar EcLlivalent at Official rate- 19148 Average earn4ngs per route km.of line, passenger 19,335 d' 1,933.50 Average earnings per route km.of line, goods 15,117 1,511.70 I P.assenger earnings 62,124,053 6,2121405 'I Goods earnings 48,570,683 4,857,0o68 Dollar Equivalenit Jate - 19141 Both official and open mrrket - 1 baht -4 0.34 19148 Official - 1 baht 0.10 1948 Open market - 1 baht e 0.05 * Tons mentioned im the report are inetric tons.  E X H I B I T III Estimated Dollar Equivalent of the Imported Equipment U. S. Dollars Item RevisEst3ateCoIM7itment Rolling Stock 30 DTslloconiotives 5,72h,0o0 5,72h,0oo 50 Steam locomotives 2,287,700 ) 70 Passenger cars 1,h66,ooo ) 4,656,loo 500 Freight cars 902,4OO ) Spare parts 540,000 Mlakkasan Shops 'Way and WTorks 256,200 11,achinery 1,877,8oo 33Ms570 Repair to Bridges 3 Contracted for in the U.TK. 1,421T,600 l,421h,600 20 Bridges arnd steel ordered in Japan 598,0o0 598,4oo Re4lacement semi-permanent Bridges 1,280,000 Pail Renewal 60,750 tons railIs) 2,000 tons accessories ) 5,7h2,300 1,390,300 Signalling Apparatus Color light - 39,300 f ' 110,000 220,000 Kiechanical 566,80o Block Instrumernts ; 117,500 329,000 Korat Li1ne 557,93. / 4. h,63o,86o 6,192,700 Total $ 29,407,900 P 14hl103,970 Equipmernt not considered necessary for the relhabilitation of the railway: 30 Diesel locomotives - 5 5,724,000 500 Freight care 902,L400 Total $6-6,626$oo Balance $ 22,781g500  EXHIBMIT I-V 212 . SUMARY OFP FOREIGN CURRENCY R1'QUESTED AIVL,NDED AlMOUNTS U.S. $ Ref er- ence Item. 1st Year 2nd Year 3rd Year 4th Year Total 7 (a) (1) 30 Diesel Locomotives 2,650,0Q0 3,0714,000 - - 5,i724,000 (a) (2) 50 Steam LocomQtives 1,036,100 1,251,600 - - 2,287,700 (a) (3) 70 Passenger Coaches 1456,600 491,800 517,600 - 1,,466,000 g (a) (14) 500 Wagons 002,400 - - 202,1400 (a) (5) Spare Parts 270,000 270,000 - 5409,000 (b) (1) l-lakkasan Workshops (Way and Works) 80,000 80,000 96,200 - 256,200 (b) (2) iakkasari Workshops (Machinery) 45o,QQo 450,000 450,000 527,00 1,877,800 (e) Bridge Repair 1,050,000 570,000 403,000 2,023,000 (d) Replacirng semi-permanerit bridges with steel spans 7659800 257,100 2574100 1,280,000 (e) Rail Renewal 1,290,8800 1,145Q,000 1,1451,000 1,550,500 5,742,300 (f) (1) Color Light Signalling 132,800 80,200 - - 220,000 (f) (2) Mechapioal Signalling 300,000 266,8oo - 566,800 (ft) (3) Single Linp Block Instrument 118,500 1140,300 70,200 - 329,Q0O (g) Service Buildings and - Staff Qu4rters - - - _ - (h) Korat Access Line 2,254,700 2j345,200 1,528,800 66,000 6,192,700 TOTAL US$11,762,700 10,727,QO 4,773,9e ?,1144,300 29,1407,900 26 1 ff. .  EXHIBIT .M1 SUIJARY 01 LOCAL CURRENCY IREQUIRED Reference Item lst Year 2nd- Year 3rd Year 4th Year 5th Year TOTAL (a) (1) 30 Diesel Locomotives - 5,750,000 - - 5,750,000 (a) (2) 50 Steam locomotives - 2,723,000 - - - 2,723,000 (a) (3) 70 Passenger Coaches - - 2,516,000 - 2,516,000 (a) (4) 500 Wtagons 999,000 - - - - 999,000 (a) (5) Spare Parts 5,037,000 5,500,000 - - 10,537,000 (b) (1) Makkasan WIorkshops (Way and WVrrks) 14,944,200 14,944,200 14,944,,200 14,944,200 - 59,776,800 (b) (2) Mahkasan Workshops (Machinery) 1,500,000 1,60o,ooo 1,700,000 1,771,000 - 6,571,000 (c) Bridge Repair 9,350,000 16,250,000 13,050,000 8,509,000 47,1559,000 (d) Replacing semi-permanent bridges with steel spans 7,320,000 6,967,000 6,900,000 - - 21,187,0OO (e) Rail Renewal 1,814,000 2,034,000 1,946,000 2,122,000 903,000 8,819,000 (f) (1) Color Light Signalling 349,000 466,000 385,000 1,200,000 (f) (2) Mechanical Signalling 765,000 765,000 765,000 305,000 - 2,600,000 (f) (3) Single Liine Block Instrument 465,000 665,ooo 270,000 - - 1,400,000 (g ) Service Building and Staff Qjuarters 8,000,000 8,2000,000 8,000,000 8,000,000 8,814,000 40,814, 000 (h) Korat Access Line 15,590,600 44,189,500 35,824,500 12,059,900 107,664,50( TOTAL Bahts 66,133,800 109,853,700 86,300,700 47,711,100 9,717,000 319,,716,300