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Rail Investment in South East Asia – What’s the Situation?

26 Jan

Asia is seeing rapid growth and urbanisation, and there is an increasing need to develop transport services. Railway is a viable option to meet the demand for urban commuting as well as long distance travel, adding a plethora of social and economic benefits such as; increase in employment opportunities, affordability, alleviating road congestion and less environmental damage.

Currently, there is no railway between Vietnam and Cambodia or Laos, although the latter does have its own dilapidated railway networks. Improved infrastructure in these countries will help forge closer trade ties with neighbouring nations, which in turn will boost economic growth and help alleviate poverty. 

Vietnam’s rail network consists of seven lines, all of which are single track, with most in need of upgrading. According to global management consulting firm AT Kearney, Vietnam’s poor infrastructure is hampering its economic growth.  It is claimed that improved freight infrastructure will launch Vietnam onto the global sourcing stage. 

Thailand suffers from a similar under-investment in its rail infrastructure. Derailments are common, and poor cross-country connections have placed a strain on the capital, Bangkok, which is densely populated and the source of the country’s economy.  A better rail network would help ease this pressure, spread some of this wealth and also boost tourism. 

Indonesia has similar congestion issues, with key cities facing bottle neck problems due to the high volume of vehicles on the road and a lack of accessibility.  While Indonesia’s annual growth in 2014 was 6-6.5%, this could be as high as 7-9% if basic infrastructure was improved.  

In 2010, Malaysia launched the Economic Transformation Programme, which aims to transform Malaysia into a high-income nation by 2020. Improved connectivity between Kuala Lumpur and Singapore is a designated project under this programme.


Moving Forward: Ongoing and Planned Projects 

The information below was taken from a useful infographic that demonstrates the recent investment that is being poured into the region.  To view the infographic click here. 

Laos: A $5 billion section of the Singapore-Kunming Railway link from China to Vientiane (2016).

Vietnam: Ho Chi Minh City metro Line 1 first of six planned to be constructed by 2017 (£2.4 billion).

Cambodia: $143 million rail rehabilitation project.

Malaysia: Malaysia-Singapore high-speed rail network ($9.7 billion). $12 billion KL MRT project covering 3 lines in Kuala Lumpur. 

Singapore: New MRT lines planned, others to be extended, almost doubling the urban rail network by 2030. 

Indonesia/Jakarta: First segment of national commuter lines constructed by 2014 ($1.8 billion). Monorail project by 2018 ($725 million).


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