Abstract
In July, it was reported that the restructuring of the inefficiently run State
Railway of Thailand (SRT) was
key to ensuring that the government’s
large infrastructure investment plans were not derailed. However,
the
issue remained contentious, with the labour unions still suspecting that the
modernisation plans were
part of a cloaked effort to privatise the
company. The fate of the chronically loss-making and ungainly
State
Railway of Thailand (SRT) remains somewhat hazy, with the government and
management itching
to restructure but the unions doggedly resisting change
out of fear that it is part of a stealthy plan to
auction off the
more-than-century-old enterprise to the private sector. On June 3, the cabinet
approved an
ambitious modernisation plan, which ran into serious
turbulence towards the end of the month. Incensed
by the decision, the
unions staged protests across the country, leaving hundreds of thousands of
travellers
stranded. The authorities’ efforts to reassure that the
proposed measures were aimed at ‘rehabilitation’,
and not
divestment, fell on deaf ears. That the SRT is in need of an overhaul is
evident to most, as the
company has been haemorrhaging money for years and
built up an onerous debt pile as a result.
Across all modes, total freight
will grow by an annual average of only 0.7% in 2009-2013. We expect the
average to be pulled down by the steep recession in 2009 and in particular by
its impact on maritime
freight. Road freight will grow by 2.5% per annum,
held back by lower demand and the limitations of the
highways network.
Airfreight is taking time to recover from the chaos of late 2008, when
political
protests led to airport closures. We project average annual
airfreight growth of 2.3% in the forecast
period. We estimate
Thailand’s maritime cargo to contract by an annual average of 1.5%
during the
forecast period. This negative number is the result of a sharp
contraction in 2009, when Thailand’s
foreign trade will slump by
almost a quarter (24%), followed by subsequent years of moderate growth.
Railway freight traffic will expand at 1.3% per annum over the five-year
forecast period.
BMI’s freight transport index for Thailand comes
out at 51.8 (out of a theoretical maximum of 100.0).
Prior to the current
recession Thailand’s best performance has traditionally been in areas
such as freight
growth, infrastructure growth and the transport intensity
index (a measure of the dynamism of foreign
trade). Areas in which it
could do better include long-term political and economic risk and the
regulatory
environment.
BMI expects transport and communications GDP
to rise to US$33.7bn in nominal terms by 2013, or
8.8% of Thailand’s
GDP. The transport and communications sector employed 1.03mn people, or 3.0%
of
the labour force, in 2008. We see this rising to 1.08mn by 2013,
remaining at 3.0% of the labour force.
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