Thailand - Railway investment program

RETURN TO F TO 15a REPORTS DES COPy RESTRICTED WITHIN |ONE WEEK | This report is restricted to use withiLn the Bank INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT THAILAND RAILWAY INVESTMENT PROGRAM July 8 1953 Technical Operations Department  rI Organization and properties of State Railway Organization 1. The State Railway of Thailand (SRT) is an autonomous public enterprise engaged in the commercial operation of State-owned railroad properties. It was set up about 2 years ago as the successor to a State Railway Department in the Ministry of Communications. The new regime implements certain com- mitments by the Government in negotiating a 1950 Bank loan of $3 million mainly for repair shops. 2. Policy control is vested in a Board of Commissioners comprising a Chair- man and 4-6 other members who are appointed by the Council of Ministers but who report, pro forma, to the Minister of Communications. Operational control is vested in a General Manager who is appointed by the Board of which he be- comes an ex officio member. 3. The SRT is set up to function in a business-like manner. Its Board of Commissioners is analagous to a Board of Directors in private enterprise and its General Manager has full managerial powers. Although the enterprise is State-owned, it collects, holds, and expends revenue as an independent entity; formulates its operating account budget without the need of cabinet approval; pays for operating costs out of operating receipts; determines the necessary charges against revenue for depreciation, pension fund, and operational re-s- erves; and is expected to use its own resources, if available, for financing renewals, additions, and betterments. 4. In principle, all the SRT's net income above the amounts needed for capital expenditure is payable to the State. The capital expenditure budget, however, is not something which the management decides by itself. Instead, it prepares a draft budget which is submitted to the Council of Ministers for consideration and approval. Following such aoproval, but only then, can capi- tal outlays be made. They are paid from carrier revenue so far as available or financed by State appropriations so far as required. 5. Ultimate power to decide certain basic issues is reserved to the Govern- ment. Prior Cabinet approval is required not only for capital expenditure but also for abandonment of lines, disoontinuance of service, incr"ase or decrease of capital, incurrence of debt, sale of immovable property, determination of base tariffs, and tariff revisions beyond certain limits, Proverties 6. Apart from a local tramway (Bangkok-Fakuam), the SRT operates 3,333 km of meter-gauge lines radiating out of Bangkok to the North (Lampang-Chiengmai), the Northeast (Korat Plateau), the East (Cembodian frontier), and the South (Kra Isthmus). New lines under construction total 390 km., mainly in the Korat area. 7. All the lines are single track except for 90 km of double track near Bangkok. They are laid with 50-lb rail, as a rule, much of it 30-40 years old. Crushed stone ballast is used throughout to a standard del,th of 15 cm. The crossties, normally 1,375 to the km, are untrebted hardwood.  - 2 - 8. The roadbed is well maintained and in good shape on the whole, despite a large amount of older rail which is badly w?orn, joint battered, and surface bent. Because of the light rail, both the permissible maximum axle loads (10.5-12 tons) and the permissible maximun train speeds (60-65 kph) are low. 9. The available equipment includes 389 wood-burning steam locomotives, 38 diesel-electrics, 6 rail cart, 5,603 freight cars. and 508 passenger coaches. They are a mixture of post-war equipment bought new, war surplus equipment bought used, and prewar equipment. 10. Although the vehicles actually at work are kept In good running order, an excessive part of the fleet is out of action awaiting or undergoing repair; in early 1953, e.g., over 30% of the motive power and 15%-20 of the rolling stock. This is mainly the result of Inadequate repair facilities, a defect which should soon be cured with completion of the Bank-financed Makassan shop now under way. 11. The fleet will soon be partly renewed and partly expanded by a substan- tial amount of new vehicles on order abroad. They include 30 diesels (pending US orders, which involve the re-award of dormant pre-Korea contracts), 500 freight cars (on firm order in Japan and Belgium), and 100 passenger coaches (also on firm order in Japan and Belgium). 12. The SRT's telecommunications are oboolete and Inefficient. Intermediate service calls in progress along a particular line can cut off Bangkok from communication with interior stations for hours or oays on end. This impedes car dispatching and train control. 13. In addition to its railway properties, the SRT owns several hotels, e.g., at Bangkok, Chiengmai, and I{ua Hin (seashore resort). II. Operational performance of State Railway Ess-ntiality of service 14. The SRT lines are a series of routes for linking a dense concentration of commercial, industrial, shiDping, and governmental activity in Bangkok (largest city, seat of government, and main ocean port), with widely dispers- ed productive regions Inland (rice, garden produce, other cash-croas, timber, livestock, rubber, tin, etc., depending on region). The routes radiate to all the important productive regions except a southeast coastal strip. They are the principal arteries, as a rule, of the areas they traverse, and in some cassi the only arteries. 15. Reflecting the high degree to wyhich Thai internal trade is an interchange of goods between Bangkok snd the rest of the country, the great bulk of the SRT's freight traffic moves to and from Bangkok. Most of the passenger traf- fic also originates or terminates in Bangkok, but short trips betvween local stLtions comprise much of the travel load. 16. Throughout the SRT service area, almost all the freight and passenger traffic except intra-urban, short-range, and feeder haulage moves by rail. The main exceptions are the carriage of - i) rice, firewood, garden produce, etc.,  - 3 - from Central Plain district8 within easy reach of a river and canal mesh lead- ing to Bangkok; il) outbound timber from the North cut in districts where the logs can be readily floated downstream; and - iii) rubber and tin in the South produced close to motorable roads leading to nearby ports. 17. Thailand's roads and waterways serve more to supelement and extend the SRT net than to compete with it. The present roads are arteries of local transport, by and large, which mainly feed goods in and out of railheads so far as they affect the SRT directly. Eventually, if the Government carries out a Mission-recommended program, the main roads will be improved, unified inter-regionally, and prolonged by motorable farm-to-market routes. As this takes place, the SRT's less-than-carload carriage of short-haul goods moving in small lots will tend to diminish, but its most essential function of all - the carriage of grain, timber, building materials, petroleum, etc., in carload volume - should expand greatly. 18. The inland waterways are largely restricted to the Central Plain where they serve as natural routes of minimum transport cost for the bulk of Bang- kok's rice supply, most of its firewood supply, and large amounts of other essential freight. Their existence prevents the SRT as well as the trucking industry from being overburdened with a form of traffic which can be carried more efficiently and cheaply by barges than by any other means in areas for- tunate enough to have navigable rivers. Nature and volume of traffic 19. As the principal and in some c4ses the only link between Bangkok and the interior, the SRT carries a large volume of passengers and freight. Slightly more than half the revenue comes from freight haulage, slightly less than half from passenger transoort, and a small balance from miscellaneous activity. 20. The SRT's freight haulage falls into two broad classes - i) carload goods moving an average of 320 km; and - ii) package goods moving an average of per- haps 200 km. About 80% of the combined volume is carload traffic which yields 67% of the combined revenue. 21. Passenger transport is a triple job; i) local hauls in the Bangkok area; ii) local hauls outside the Bangkok area; and - iii) througl hauls between Bangkok and distant towns. The average passenger travels about 68 km; autobus competition hardly exists except near Bangkok. 22. The SRTts freight traffic reflects the basic structure and characteris- tics of the Thai economy. About two-thirds of the carload revenue comes from agricultural produce, forest products, and construction materials. About two- fifths of the total revenue comes from less-than-carload shipments by small merchants, traders, and processors. In contrast to a restricted haulage of minerals, metals, and equipment, there is a preponderant haulage of non- industrial materials and supplies. 23. Rice is the most important single commodity except package goods as a group. In 1952,,carload shipments of rice, paddy, and bran yielded almost 20% of the freight revenue. Other important classes of carload freight in- clude:  -4- Approximate percent of 1952 freight revenue i) Thai materlals for domestic use such as lumber, cement, stone, charcoal, and marl 16.4 iI) Consumer manufactures such as canned goods, household articles, cloth, flour, liauor, matches, and soap 5.5 i4i) hlai foodstuffs for domestic use such as sugar, salt, beans, garden produce, and tobacco 5.1 iv) Imported petroleum such as gasoline, kerosene, and fuel oil 4-7 v) liative livestock such as pigs, cattle, and water buffalo 2.8 vi) Imported equipment such as machinery and vehicles 2.6 vii)Thai materials for export such as rubber, tin, and sticlac 1.4 24. Freight and passenger traffic have been expanding rapidly since the war. Compared with 1947, the SRT is carrying 50% more freight measured in ton-miles, and 2-3 times as much passenger traffic. Compared with 1938/39, freight traf- fic is 40% greater and 7-8 times more passenger traffic is moving. The great increase in passenger transport is partly attributable to cheap fares, only 60% above prewcr despite 11-12 times htgher costs of living. The large increase in freight ha.ulage reflects a quadrupled volume of package tr. ffic since 1933/3! on top of 20% more carload traffic. Freight rates and passenger feres 25. The tariff structure dates from early 1952 when rates and fares were in- creased considerably as a step to commercialized operation. Freight rates were raised 2-, times aoove the previous level and passenger fares some 20%. In cal- endar 1952, carload goods except livestock yielded the equivalent of 1.5 USO per ton-mile; livestock, 3.7