SECTOR ASSESSMENT (SUMMARY): TRANSPORT 1 Sector Road Map. 1. Sector Performance, Problems, and Opportunities

Transcription

1 Greater Mekong Subregion Highway Expansion Phase 2 Project (RRP THA 41682) SECTOR ASSESSMENT (SUMMARY): TRANSPORT 1 Sector Road Map 1. Sector Performance, Problems, and Opportunities 1. The transport sector in Thailand is significantly more developed than its Southeast Asian neighbors. This advanced development mainly encompasses the infrastructure and operational development of three of the major transport subsectors: road, water and air transport. Road transport is the dominant subsector in terms of investment, traffic flow, national coverage, and economic impact, accounting for 98% of passenger traffic and 95% of the country s freight traffic. 2. In 2016, the government approved a significant investment increase in the transport sector designed to stimulate the economy. In December 2016, the cabinet approved a $25.6 billion infrastructure action plan for 2017 that included 36 transport projects focusing on new road, rail, aviation, and port projects. An estimated 67% of the costs will be financed by borrowing, with the remainder financed by government budgets, public private partnerships, and an infrastructure fund. 2 This proposed investment followed the approval of an earlier stimulus package consisting of 20 transport projects totaling about $40 billion. 3. Organization. Under the 2002 civil service reforms, all national transport-related agencies were brought under the control of the Ministry of Transport. The Department of Highways (DOH) is responsible for national roads and highways, comprising about 70,660 kilometers (km) of roads and about 350 km of highways. 3 Key local roads are the responsibility of the Department of Rural Roads, with a network of about 35,000 km, of which 82% are paved. About 365,000 km of other local roads are under municipal and district jurisdiction. 4. The Expressway Authority of Thailand (EXAT) 4 is responsible for urban expressways, presently confined to Bangkok Metropolitan Region (BMR) and its environs. Bangkok Metropolitan Administration is responsible for urban road development in the BMR. 5. The Office of Transport and Traffic Policy and Planning, also established under the 2002 reforms, is the national transport planning office. Its primary responsibilities are to formulate master plans and strategies for the country s transport and traffic development, including those concerning safety and the environment. It is also tasked with establishing traffic standards and safety measures, and sustainable transport initiatives. The office also provides advice to the government in the review of annual programs of the DOH and EXAT. 6. Thailand has no central authority responsible for road safety, with numerous overlapping organizations and committees involved. Responsibilities are divided among seven government 1 The sector assessment focuses only on the road transport subsector. 2 This refers to the Thailand Future Fund (TFF), a close-ended mutual (bond) fund in which the Ministry of Finance will be the sole state investor, with an initial investment of B1 billion ($28.5 million). The remaining $228.5 million of the B9 billion ($257 million) initial public offering will be raised from private investors. The TTF became operable in the second quarter of 2017, with expected return(s) of 2% 3% per annum. The initial three TTF projects expected to be programmed for financing are road projects: two from the Department of Highways (DOH): National Highway 7 from Bangkok to Ban Chang (National Highway 9) and a section of Bangkok s Western Outer Ring Road; and one from the EXAT, the Rama 3 Dao Khanong Expressway. 3 Government of Thailand, Office of the Permanent Secretary, Ministry of Transport Transport Statistics. Bangkok. 4 Formerly the Mass Transit and Expressway Authority of Thailand.

2 2 agencies and one private entity. 5 Road safety management rests with three separate committees: the National Road Accident Prevention and Reduction Policy Board, the Road Safety Directing Centre, and the Road Safety Operating Centre. The secretariats of these three committees only have authority to coordinate, without any management or operational authority regarding transport agencies. These committees meet a few times a year, and are primarily composed of high-level politicians, civil service officials, and police and/or military generals. In 2012, in response to the 2010 proclamation of the United Nations Decade of Action for Road Safety, , the government issued an executive order to strengthen coordination among these organizations/committees to achieve the goals of this United Nations proclamation. 7. Inefficient highway network. Since 1980, as Thailand has advanced towards becoming an upper middle-income country, its road transport subsector has significantly outperformed its Southeast Asian neighbors. Yet, much of the existing highway network is operating above capacity, resulting in congestion and inefficient movement of goods and people. One of the primary reasons for this is the limited road capacity caused by the carriageway configuration of the highway network. The capacity of roads is determined by the carriageway widths and number of lanes. Only about 17% of the 70,660 km highway network in the country are four-lane carriageways, while the rest are two-lane carriageways. The road capacity of the highway network is limited by the two-lane carriageway configuration. Since 1995, the government has proceeded with a national four-lane highway widening program to upgrade national highways from single two-lane to divided four-lane carriageways. The program is still under implementation and 4,197 km of national highways have been widened to four-lane carriageways. 8. Road safety. A very significant problem in the Thai road transport subsector, primarily in rural areas, is the widespread lack of road safety. In 2015, 71,054 traffic accidents and 6,432 deaths from those accidents were recorded, producing a fatality rate of 9.6 per 100,000 people. 6 The World Health Organization estimated that Thailand had the second highest worldwide road traffic fatality rate for 2013, at 36.2 deaths per 100,000 population. 7 Thai traffic deaths disproportionally affect vulnerable road users (pedestrians, cyclists, and motorcyclists), accounting for 83% of total fatalities. 8 The annual loss caused by traffic injuries is estimated to be about 0.79% of the country s gross domestic product (GDP), 9 which amounts to an annual loss of more than $3 billion for traffic injuries alone, not taking into account losses caused by fatalities. Although traffic accident data for Thailand vary widely by source, they all reflect the serious traffic safety problem in Thailand. Thailand s rate of traffic fatalities also exceeds that of its neighbors in 5 These are the Royal Thai Police, Ministry of Education, Department of Highways, Department of Rural Roads, Department of Land Transport, Department of Disease Control, National Institute for Emergency Medicine, and Road Accident Victims Protection Public Company. 6 Royal Thai Police Traffic Accident Report. Bangkok. 7 World Health Organization. Global Status Report on Road Safety, Geneva, Switzerland; and the World Bank, together with the Global Road Safety Facility and the University of Washington, estimated a Thai road fatality rate of 29 deaths per 100,000 population for K. Bhalla et al Transport for health: the global burden of disease from motorized transport. Washington, DC: World Bank. 8 World Health Organization. Country Office of Thailand. Strengthening Road Safety in Thailand. who.int/thailand/areas/roadsafety/en/ 9 K. Dalal et al Economics of Global Burden of Road Traffic Injuries and Their Relationship with Health System Variables. International Journal of Preventive Medicine. 4(12). pp

3 3 the Greater Mekong Subregion (GMS). 10 A key reason for this poor road safety is attributed to lack of safety features in road infrastructure. 9. Road infrastructure competitiveness. The development of Thailand s road infrastructure is significantly more developed than its immediate GMS neighbors, yet it still lags many Asian countries in terms of road infrastructure competitiveness. 11 Since 2005 Thailand has made significant progress in reducing its high logistics costs from about 18% of GDP in 2007 to 14% 15% in 2015, 12 but it will need to increase its transport infrastructure investment to reduce logistics costs to reach the government s strategic target indicator of 12% of GDP by Government s Sector Strategy 10. Thailand completed its final year under the Eleventh National Economic and Social Development Plan, in September The 11th plan called for the development of connectivity in transport and logistic systems under regional cooperation frameworks, to be achieved through the development of efficient transport and logistic services that meet international standards. The 12th National Economic and Social Development Plan, commenced on 1 October 2016, and is based on 10 core strategies, including a strategy on infrastructure and logistics, advance infrastructure for Thailand ( ), by stressing road, rail, air, and maritime infrastructure, with a national transport indicator to reduce the logistics cost to 12% of GDP by 2021, from about 15% of GDP in The 12th plan was designed to be implemented in accordance with Thailand s more extensive 20-year National Strategy, This National Strategic Plan consists of six primary strategies and four supporting strategies. The primary strategies emphasize (i) security, (ii) competitiveness enhancement, (iii) human resource development, (iv) social equality, (v) green growth, and (vi) public sector management and good governance. The four supporting strategies are (i) infrastructure development and the logistics system; (ii) science and technology, research, and innovation; (iii) urban, regional, and economic zone development; and (iv) international cooperation for development. 3. ADB Sector Experience and Assistance Program 12. The initial involvement of ADB in Thailand s transport sector was in 1992 on the Bangkok Urban Transport Sector Project. 14 This road project was rated highly successful although a number of implementation problems delayed completion, including land acquisition, resettlement, and procurement. 15 Recent ADB transport sector experience includes technical assistance (TA) 10 Comparable GMS rates of fatalities/100,000 population: Thailand 36.2; Viet Nam 24.5; Myanmar 20.3; People s Republic of China 18.8; Cambodia 17.4; Lao People s Democratic Republic World Health Organization Global Health Observatory Data Repository; Road Traffic Deaths Data by Country. Geneva, Switzerland. 11 Based on a ranking from 1 to 7, with 1 being inefficient/noncompetitive road infrastructure, and 7 indicating very efficient/very competitive road infrastructure, Thailand compares as follows: Singapore and Hong Kong, China 6.2; Taipei,China 5.8; Malaysia 5.7; Republic of Korea 5.6; Sri Lanka 5.2; People s Republic of China 4.7; Thailand 4.4; India 4.1; Indonesia 3.7; Viet Nam and the Philippines 3. Deutsche Bank Research Asia Infrastructure Financing. Frankfurt, Germany. 12 Thailand Board of Investment Thailand Investment Review. 26(9). 13 Government of Thailand, National Economic and Social Development Board The Eleventh National Economic and Social Development Plan Bangkok. 14 ADB Report and Recommendation of the President to the Board of Directors: Proposed Loan to the Kingdom of Thailand for the Bangkok Urban Transport Project. Manila. 15 ADB Performance Evaluation Report: Bangkok Urban Transport Project in Thailand. Manila.

4 4 projects in the rail transport subsector 16 a TA 17 grant, and loan in the road transport subsector, the GMS Highway Expansion Project. 18 The project completion report was completed in The GMS Highway Expansion Project involves the widening of existing roads from twolane to four-lane divided highways, along two national highway routes: 105 km of National Highway 12 (along the East West Economic Corridor) from Phitsanulok to Lo Sak; and 73 km of National Highway 359 (along the Southern Economic Corridor) from Phanom Sarakham. The project was approved in December 2009, with loan effectiveness scheduled 90 days after approval, but the loan agreement was not signed until June Civil works activities commenced in February 2013, 47 months after the original loan effectiveness date, and were completed in December The primary cause of this time overrun was procurement delays, approval requirements for specific tree cutting along National Highway 12 20, resettlement issues, and delays in environmental management plan activities The current ADB country partnership strategy for Thailand 22 is based on a finance plus leverage plus knowledge (finance++) approach, which promotes flexibility to respond to Thailand s needs and priorities as an upper middle-income country through sovereign and nonsovereign support. The strategy points out that investment is likely to be insufficient to meet the future demands for transport infrastructure despite solid progress and increasing investment in transport infrastructure. In line with this finance++ approach, a key value-added aspect is the introduction of an innovative and customized lending structure in ADB products to meet the development needs of Thailand as an upper middle-income country. 16 Rail experience includes three TA projects: (i) ADB Technical Assistance to the Kingdom of Thailand for Supporting Railway Sector Reform. Manila; (ii) ADB Technical Assistance to the Kingdom of Thailand for Accounting and Financial Management System Reform of Thailand s Railway Sector. Manila; and (iii) ADB Technical Assistance to the Kingdom of Thailand for the Improvement of Railway Passenger Service. Manila. 17 ADB Technical Assistance to the Kingdom of Thailand for an Implementation Plan for Strategic Intercity Motorway Network. Manila. 18 ADB Report and Recommendation of the President to the Board of Directors: Proposed Loan and Technical Assistance Grant to the Kingdom of Thailand for the Greater Mekong Subregion Highway Expansion Project. Manila. 19 ADB Completion Report: Greater Mekong Subregion Highway Expansion Project. Manila. 20 Tree cutting was a sensitive environmental consideration since an extended section of this National Highway 12 project traversed areas of protected national forest and a national park. 21 Asian Engineering Consultants Corporation Limited Project Completion Report: Greater Mekong Subregion Highway Expansion Project. February Bangkok, Thailand. 22 ADB Country Partnership Strategy: Thailand, Manila.

5 5 PROBLEM TREE Effects Constrained economic growth and social development High transport costs Hindered accessibility Problem Inefficient and unsafe road transport network Causes Inadequate highway network for connectivity Low road safety standards for highway network Limited road capacity of existing highway network Deficiency in safety features for road projects Constrained funding for expanding highway network capacity Inadequate technical knowledge in road safety