It was advertised as the train that will take you from Bangkok to London, then it was the fastest land link to Southern China, now it is one of the slowest ongoing rail constructions in the world.
As Pichai Naripthaphan, the former energy minister pointed out, if it took two years and six months to build the first 3.5 kilometers then it would take at least half a century for the Sino-Thai rail to get to Chiang Mai.
But slow going on rail construction might not be altogether a bad thing.
The Belt and Road project was advertised by China as bringing economic prosperity to all the countries that it touches. But that has not proven to be the case in reality.
One only needs to look at what’s going on in Laos to understand how dangerous a deal with China can be.
The Sino-Laos rail line comes with a hefty US$6.2 billion price tag or around $15 million per kilometer, a price tag that analysts had said the Laotian government will have a hard time repaying.
It will also come at a cultural cost as the line will also go through Luang Prabang, a World Heritage Town.
The first chunk of loan that our neighbor took from Beijing to build the high-speed rail link was worth $480 million with an undisclosed interest rate that was probably no less than the 2 per cent, the same rate that China has been offering countries in Southeast Asia.
Laos is offering five of its potash mines as collateral so hopefully, they would not lose those natural resources, but the signs are not looking good.
Apart from the loan for the rail, the country now owes at least $8 billion worth of debt to Électricité du Laos, a former state-run utility company that now belongs to China Southern Power Grid as of September 1, the Financial Times reported.
The Diplomat also said that Laos’s reserve is now down to $864 million as of June which is not enough to meet its debt obligations of at least $1 billion per year. Its sovereign debt has reached $12.6 billion or 65 per cent of the GDP, they added.
China is now Laos’s biggest creditor and the country is facing default while Cambodia could be next.
With Laos out of the way, political pressure from China could now be focused on Thailand.
With only 3.5 km completed as of yesterday, there is plenty of money left to be made for corrupt politicians and plenty of debt to place the country in. Would you trust the current group of crooks sitting in government to not take advantage?
So far, Arkhom Termpittayapaisith, the former minister of transport, has done this country a huge favor by turning down China’s idiotically high-interest rate and conditions.
“China wants to put tough conditions on the loan contract, demanding that the Chinese government could seize other assets of the Thai government if they default on debt repayments,” Arkhom told The Nation in 2017.
It was a smart decision. But can we trust this government to continue making smart decisions? Do we trust Prayut and co, to not line their pockets and choose country over profit?