Executive Summary Report The Potential Assessment and Readiness of Transport Infrastructure and Services in Thailand for ASEAN Economic Community (AEC)

Content Page 1. Introduction 1.1 Rationales 1 1.2 Objectives of Study 1 1.3 Scopes of Study 2 1.4 Methodology of Study 4

2. Current Status of Thailand Transport System in Line with Transport Agreement of ASEAN Community 2.1 Master Plan and Agreement on Transport System in ASEAN 5 2.2 Major Transport Systems for ASEAN Economic Community 7 2.2.1 ASEAN Highway Network 7 2.2.2 Major Railway Network for ASEAN Economic Community 9 2.2.3 Main Land Border Passes for ASEAN Economic Community 10 2.2.4 Main Ports for ASEAN Economic Community 11 2.2.5 Main Airports for ASEAN Economic Community 12 2.3 Efficiency of Current Transport System for ASEAN Economic Community 12

3. Performance of Thailand Economy and Transport Trend after the Beginning of ASEAN Economic Community 3.1 Factors Affecting Cross-Border Trade and Transit 14 3.2 Economic Development for Production Base Thriving in Thailand 15 3.2.1 The analysis of International Economic and Trade of Thailand and ASEAN 15 3.2.2 Major Production Bases and Commodity Flow of Prospect Products 16 3.2.3 Selection of Potential Industries to be the Common Production Bases of Thailand 17 and ASEAN 3.2.4 Current Situation of Targeted Industries 18 3.2.5 Linkage of Targeted Industries at Border Areas, Important Production Bases, 19 and Inner Domestic Areas

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Content (Cont’d) Page 3.3 Trend of Thailand’s Trade and Tourism after the Beginning of 21 ASEAN Economic Community (AEC) 3.3.1 Trend of Thailand’s Trade after the Beginning of AEC 21 3.3.2 Development of Thailand’s Tourism after the Beginning of AEC 23 3.4 Future Transport Routes after the Beginning of AEC 25 3.5 Freight and Passenger Transport via Main Gateways and Major Transport Routes 29 after the Beginning of AEC 3.5.1 Future Truck Volume via Main Gateways 29 3.5.2 Future Passenger Volume via Main Gateways 31 3.5.3 Future Number of Trucks and Passengers on Main Highways 34 3.6 Efficiency of Future Transport System under Existing Transport Plan 38

4. Analysis of Transport Standards and Facilities for ASEAN Economic Community 4.1 Standards of Transport and Logistics Services at Border Passes 44 4.1.1 Performance of Transport Logistics System of Country Members of ASEAN and GMS 44 4.1.2 Standards of Transport Logistics System of ASEAN and GMS Country Members 45 4.1.3 Logistics Standard Problems in ASEAN and GMS Country Members 47 4.2 Exchange of Traffic Rights, Safety Standard of Freight, Requirements for 47 the Admittance of Road Vehicles and Market Access and Licensing 4.3 Possibility of Road Surcharges Collection from Foreign Vehicles 52 4.3.1 Road Maintenance Costs 52 4.3.2 Environmental Cost 53 4.3.3 Guideline for Collection of Road surcharges from Foreign Vehicles 54 4.4 Possibility of Intermodal Facilities Establishment and their Functional Layout 56 4.5 Possibility of Rest Area Establishment 59 4.6 Analysis of Private Sector Capacity in Providing Transport and Logistics Services 62

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Content (Cont’d) Page

5. Transport Infrastructure and Management Ready Plan for ASEAN Economic Community 5.1 Transport Strategies for AEC 64 5.2 Transport Infrastructure and Management Ready Plan for ASEAN Economic Community 72 5.3 Impacts of the Implementation of the Preparation Plan for AEC 118

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List of Tables Page Table 2.1-1 Agreement on transportation by transport modes 6 Table 3.1-1 Effects of changes in factors affecting trade volumes 14 Table 3.3-1 Import and export values of Thailand’s border trade and transit trade 22 (Only Top ten products with highest values) Table 3.3-2 Forecasted Tourists after the beginning of AEC in 2015 and 2020 24 as classified by modes and nationality Table 3.5-1 Amount of freight trucks through main border passes in year 2012, 2015 and 2020 30 Table 3.5-2 Total numbers of inbound and outbound passengers through the major gateways 32 for AEC in Year 2012, 2015 and 2020 Table 3.5-3 Expected number of buses and passenger cars through potential border passes 33 for AEC in Year 2012, 2015 and 2020 Table 3.5-4 AADT on Main Highways in 2015 and 2020 after the opening of AEC 35 Table 3.6-1 Transport development plan used in the efficiency analysis of transport system 38 and its terminals in the future Table 4.1-1 Processing Time at Border Pass 46 Table 4.2-1 The progress of the agreement under the ASEAN framework 48 Table 4.2-2 Comparison of standards on vehicle efficiency 50 Table 4.2-3 Comparison of standard on vehicle dimension 50 Table 4.2-4 Comparison of standard on maximum weight 50 Table 4.2-5 Development plan of Dangerous Goods transport system by road during 2010-2019 51 Table 4.3-1 Road Surcharges on AH1 route from Mae Sot to Ban Klong Luek by Type of Vehicle 53 Table 4.3-2 Global warming cost of each vehicle type 54 Table 4.3-3 Air pollution costs of each vehicle type 54 Table 4.3-4 Estimation of Road Fee Collection 54 Table 4.4-1 Recommendation of Truck Terminals and Intermodal Facilities Development 57 at Border Area in the Future Table 5.2-1 Transport Infrastructure and Management Ready Plan for AEC, 2014-2035 74

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List of Figures Page Figure 1.4-1 Methodology of Study 4 Figure 2.2-1 Designated Transit Transport Routes (TTR) according to protocol 1 8 Figure 2.2-2 Missing links of railway track for Singapore-Kunming Railway Line (SKRL) 9 Figure 2.2-3 Locations of Potential Border Passes for AEC 10 Figure 2.2-4 Location of Main ports for AEC 11 Figure 2.2-5 Locations of Main Airports for AEC 12 Figure 2.2-6 The linkage between travel volume and the efficiency of the transport network 13 for infrastructure development Figure 3.4-1 Border Trade of Twin City Concept 25 Figure 3.4-2 Transit Transport Route: TTR 26 Figure 3.4-3 Potential routes after beginning of AEC between Bangkok and main gateways 27 Figure 3.6-1 The forecast of traffic congestion on ASEAN Highway 40 Figure 3.6-2 The forecast of traffic congestion at border pass 40 Figure 3.6-3 The forecast of reserved capacity of railway sections 41 Figure 3.6-4 The forecasted density of the ports 41 Figure 3.6-5 The forecasted density of airport capacity 43 Figure 4.4-1 Functional Layout of Truck Terminal 57 Figure 4.4-2 Functional Layout of Intermodal Facilities 58 Figure 4.5-1 Recommended Location for Truck Rest Area in Thailand during short term, 61 medium term and long term phase Figure 5.1-1 Transport Strategies for AEC 65 Figure 5.1-2 Transport Strategies and Tactics 66 Figure 5.2-1 Location of the Project under the Transport Infrastructure 114 and Facilities Preparation Plan for the Northern Region Figure 5.2-2 Location of the Project under the Transport Infrastructure 115 and Facilities Preparation Plan for the Central, Eastern and Western Regions Figure 5.2-3 Location of the Project under the Plan for the Preparation of Infrastructure 116 and Facilities for Northeastern Thailand Figure 5.2-4 Location of the Project under the Transport Infrastructure 117 and Facilities Preparation Plan for the Southern Region

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Executive Summary Report 1. Introduction 2. Current Status of Thailand Transport System in Line with Transport Agreement of ASEAN Community 3. Performance of Thailand Economy and Transport Trend after the Beginning of ASEAN Economic Community 4. Analysis of Transport Standards and Facilities for ASEAN Economic Community 5. Transport Infrastructure and Management Ready Plan for ASEAN Economic Community

1. Introduction

1.1 Rationales

ASEAN Economic Community (hereinafter referred as AEC) was established by 10 countries within the Southeast Asia including Thailand, Indonesia, Malaysia, Philippines, Singapore, Brunei Cambodia, Lao, Vietnam and Myanmar. The goal of AEC establishment is to complete ASEAN Vision in 2020, which is to create stability, wealth and to improve competitiveness of ASEAN in comparison with the other regions. The success of AEC will lead to closer and better economic relationship among member countries, which will lead to more convenient travel within the region. However, allowing vehicles registered in the other countries to travel within or pass by Thailand will have unavoidable impacts on the management of transport and logistics system in Thailand. From this reason, there is a need for a study on assessment of potential and readiness of transport infrastructure and services in Thailand for AEC.

1.2 Objectives of Study

1) To help the Ministry of Transport and related public and private sectors have the academic data and current status of transport infrastructures and services in Thailand from all transport modes: road, rail, sea and air. The expected outputs are the frameworks and strategies to keep up with demand on the connectivity of people and goods within AEC.

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2) To provide the related sectors all necessary knowledge and information for their preparation and adaptation to the changes within ASEAN in order to enhance the benefits of Thailand trading, investment and tourism-service sector under the efficient transport infrastructures and services, proper pricing, competitive cost, and to create opportunity in value creation of products of related manufacturing sectors.

3) To promote role of Thai government agencies through integrated and united cooperation which can drive the cooperation frameworks between Thailand and neighborhood countries for sustainable developments under the basis of equality and trust.

1.3 Scopes of Study

To achieve the objectives mentioned above, the consultants conducted the following studies under the project frameworks as shown below.

1) Study, review, and analyze the problems and threats of transport infrastructures and services in Thailand for AEC, including monitor and evaluate the progress of AEC Blueprint and the progress of integration plan of ASEAN Logistics Roadmap, which at least including the following topics. (1) Survey, Study and analyze the current situation, including find out the international transport problems and to direction of related strategic plans and international agreements between Thailand and countries of involved regions. (2) Study and analyze the traffic volumes of all vehicle types, analyze the important conditions in order to allow free traffic movements among member countries, including practical guideline to monitor and control such activities that accepted by member countries of ASEAN. (3) Study, analyze and suggest standards of transport and logistics system which is different from country to country such as procedure at border pass, traffic rights, vehicle acceptance, and logistics service provider, including international standards to enhance safety in transportation of general commodities, dangerous goods and fragile products as well as the central organization whom in charge the vehicles involved with accident once the accident occurred.

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(4) Study and analyze the feasibility and functionality of transfer centers, rest areas, emergency stops and related facilities on all major highways of Thailand. (5) Feasibility study of acceptance level regarding usage fee, which collecting from foreign vehicles using Thai highways. (6) Study, evaluate potential, conduct SWOT analysis on the basis that most benefits to Thailand once joining with AEC. (7) Study and analyze the pros and cons of both physical aspect of transport infrastructures and competitiveness of related private sectors in order to find out model measure which leads to gain most benefits to Thailand development.

2) Study and analyze for integral plans/projects of related public and private sectors to enhance Thailand role as the economic gateway with neighbor countries in order to promote trade, investment and tourism, which corresponding to the master plan of ASEAN connectivity and the related strategies; including prioritize groups/categories/ types of plans/projects according to its importance.

3) Study and analyze linkage of economic development among border areas, important production bases, and inner areas of Thailand by connecting transport network, in terms of both infrastructures and management of transport-logistics system.

4) Study and analyze opportunity, benefits and limitation under the beginning of AEC circumstance, including analyze the pros and cons of AEC, as well as specify measures to prevent possible negative impacts so that Thailand can adapt for the circumstance which related to the direction of development of ASEAN and related sub-regions.

5) Analyze and evaluate the status as well as readiness of the public and private sectors, including the role of private sector in participating with development of transport ready plan of all sectors and all dimensions, especially, the role and direction of Thailand development in order to stimulate growth and connectivity as well as elevate to Economic Corridors for the development of trade, investment and tourism in ASEAN region.

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1.4 Methodology of Study

Methodology of this study is focused on data collection at micro level (micro surveys), for example, estimation of future traffic volume, survey of highway routes and border passes, data collection related to infrastructures, facilities, regulations, standards, policies, and guidelines. Data from micro surveys has been used to develop actions at micro level. This study also includes updated status, problems, and key issues for practical operation as well as reviews of best practices from different regions. The information can be used to develop the ready plan for transport sector that once implemented can clearly promote Thailand, with macro movement, both domestic level and ASEAN regional level. Figure 1.4-1 shows the methodology of this study.

Figure 1.4-1 Methodology of Study

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2. Current Status of Thailand Transport System in Line with Transport Agreement of ASEAN Community

2.1 Master Plan and Agreement on Transport System in ASEAN

Master plan, operation plan and Agreement on Transport System in ASEAN are essential for the direction of planning for infrastructure development after the beginning of AEC as shown in the following.

1) Master Plan on ASEAN Connectivity 2011 : MPAC The Master Plan aims to connect the region together and increasing competitiveness at the world level by combining together all resources such as people, goods, service and capital. This plan expected to complete within 2015. There are 3 elements consisting of as follows: 1. Physical Connectivity is for the network development of land transport, waterway transport, and air transport together with information technology and communication as well as energy in such a way that they are effectively integrated. 2. Institutional Connectivity is for having strategies, agreement, law and institutional mechanism among ASEAN members which committed to be non-tariff barriers (NTB). This also creates common standards for ASEAN in terms of investment, assessment, and transport agreement in order to reduce transport cost for cross- border and transit trading among ASEAN members. 3. People-to-people Connectivity is for promoting education and lifetime learning, tourism as well as cultural exchange among ASEAN members.

2) Brunei Action Plan 2011-2015 The aims of Brunei Action plan are to establish cooperation of transportation and logistics within ASEAN region. The plan was scheduled from 2011-2015 which consists of 4 parts.  Land transport is for establishing land transport (roadway and railway) within ASEAN region with good characteristics: efficiency, good integration, safe, sustainability and environmental friendliness.

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 Air transport is for establishing an open-sky policy for ASEAN region. So that Economy of ASEAN region can be combined as well as security and safety of aircraft can be maintained with international standard.  Sea transport is for establishing the efficient marine business in ASEAN region that integrated smoothly with related transport systems for its competitiveness; and also developing environmental friendly ports and safe pilot system.  Facilitate transportation is for establishing integrated and efficient logistics system, including multimodal transport system which operate among countries both in ASEAN and worldwide; as well as promoting green logistics system to protect world environment.

The connectivity of ASEAN economic system has mutual agreement that ASEAN will link all transport system together, including agreement on infrastructure development as well as regulations and laws promoting connectivity of transport system. The agreement on transportation will promote the development of regulation and law in order to improve the competitiveness in transport services. The agreement would have impacted on the preparation of Thailand’s infrastructure and logistics services for ASEAN Economic Community as shown in the Table 2.1-1.

Table 2.1-1 Agreement on transportation by transport modes Mode Transport agreements 1. Road Transport  ASEAN Framework Agreement on Facilitation of Goods in Transit (AFAFGIT)  ASEAN Framework Agreement on the Facilitation of Inter-State Transport (AFAFIST)  ASEAN Framework Agreement on Multimodal Transport (AFAMT)  Roadmap for the Integration of Logistics Services 2. Maritime Transport  ASEAN Single Shipping Market: ASSM  Roadmap towards and integrated and Competitive Maritime Transport in ASEAN 3. Air Transport  ASEAN Single Aviation Market: ASAM  Roadmap for Integration of Air Travel Sector: RIATS Source: Consultant

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2.2 Major Transport Systems for ASEAN Economic Community

The transport planning under the integration of ASEAN Economic Community circumstance will consider transport networks and major gateways in line with master plan, action plan, and international agreement on transportation as mentioned above, which previously discussed among ASEAN members. If there are any new potential transport networks and gateways in the future which enable more benefits to Thailand, they will be added accordingly as appropriated.

2.2.1 ASEAN Highway Network

ASEAN highway network in Thailand consists of 12 routes with the total distance of 6,669 kilometers. The first 9 routes are listed as both ASIAN highway and ASEAN highway with the total distance of 5,129 kilometers. The other 3 routes are listed as ASEAN highway route only with the total distance of 1,540 kilometers. All of these routes have already been linked with all nationwide customs houses under AFAFGIT and AFAFIST agreements. The agreements proposed that all ASEAN members have to prepare international transport routes, including infrastructure that help facilitate goods in transit under Protocol No. 1. So that designated Transit Transport Route (TTR) of Thailand can be identified with the total distance of 4,477 kilometers from the total of 6,669 kilometers (accounting for 67%) as shown in the Figure 2.2-1. Most highways in Thailand are asphaltic-concrete highway accounting for about 98.5 % by distance and with good surface. All highways in Thailand are classified as class 3 or over and more than half of all highways have 4 lanes. The significant problems of highway transportation in Thailand are, for example, (1) high proportion of road-oriented transport, (2) traffic congestion usually occurs around the capital and Eastern part of Thailand, including major border gateways, (3) major highways along economic corridors are underutilized and most of them are acted as transport corridors, (4) accident problem, (5) poor connectivity at border areas, (6) lack of public transport services between major cities, and (7) problems of road signs, etc.

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Source: Consultant Figure 2.2-1 Designated Transit Transport Routes (TTR) according to protocol 1

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2.2.2 Major Railway Network for ASEAN Economic Community

According to Brunei action plan, there is an importance mission for railway transport, which is Singapore-Kunming Railway Line (SKRL). This railway network will connect all countries in ASEAN together with efficiency, integration, safe, sustainability and environmental friendly. SKRL, will pass Singapore – Malaysia –Thailand –Cambodia –Vietnam –China (Kunming) as the major line. In addition, there will also be the railway link between Thailand- Myanmar and Thailand- Lao PDR as the branch which is so called Eastern railway. The total distance of SKRL will be 5,382 kilometers. In addition, it is found that there are 2 missing links in Thailand on basis of SKRL agreement, which are Aranyaphathet –Khlong Luek with a distance of 6 kilometers and Three Pagodas Pass-Nam Tok with a distance of 153 kilometers as shown in the Figure 2.2-2. In the comparison to neighbored countries, Thailand has quite a better preparation in terms of railway transport development.

The significant problems of railway transport in Thailand in respected to connection with neighbored countries are as follow: (1) incompleteness of SKRL, (2) incompleteness of domestic railway network, (3) problems of railway linkage with border passes operated inefficiency, and (4) problems of passengers transported by railway system.

Figure 2.2-2 Missing links of railway track for Singapore-Kunming Railway Line (SKRL)

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2.2.3 Main Land Border Passes for ASEAN Economic Community

The criterions of main border passes for AEC are as below: 1. The main border passes have to link or connect with ASEAN highway or designated Transit Transport Route (TTR) of Thailand or Singapore-Kunming Railway Line (SKRL) 2. The main border passes have to have high volume of trading, goods transport and passengers transport in and out. 3. The main border passes have to be the ones specified in infrastructure developing plans of public and private organizations. From the above criterions, there are 9 main border passes for AEC, i.e., Nong Khai, Sadao, Aranyaprathet, Mukdahan, Padang Besar, Chiang Khong, Nakhon Phanom, Mae Sai and Mae Sot. Figure 2.2-3 shows the locations of these main border passes. The significant problems of main border passes in Thailand are, for example, (1) lack of parking lots, rest areas and transportation facilities, (2) traffic congestion on roadway entering the main border passes, (3) lack of areas for effective border operation, (4) lack of staffs, (5) delay caused by checkpoints combining both goods and passengers, and (6) lack of combined border administration authority.

Mae Sai Chiang Khong

Nong Khai

Nakhon Phanom Mae Sot Mukdahan

Arunyaprathet

Padang Besar

Sadao

Figure 2.2-3 Locations of Potential Border Passes for AEC

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2.2.4 Main Ports for ASEAN Economic Community

The criterions of main ports for AEC are as below. 1. The main ports should correspond with Brunei Action Plan (BAP). There are 47 main ports agreed under BAP for connectivity within ASEAN members. 2. The main ports should have significant international trading volume at present time. 3. The main ports should correspond with the development plans of public and private agencies.

From the above criterions, there are 6 main ports for AEC in Thailand, which are (1) Laem Chabang port, (2) Bangkok port, (3) Songkhla port, (4) Map Ta Phut port, (5) Pak Bara port and (6) Songkhla port 2. The Figure 2.2-4 shows the locations of these main ports. The Second Songkhla port will increase the potential of the first Songkhla port when both ports operated together, which can also link to Philippines and Indonesia in the future. While Pakbara port will be the new gateway for goods Bangkok transport in Andaman Sea to Indian Laem Chabang Ocean in the future. Map Ta Phut The significant problems of main ports in Thailand connecting with neighbored countries are, for Song Khla example, port congestion, problem Pakbara of relying only on one main port Song Khla 2 (Laem Chabang port), coastal ports and river ports in Thailand are not well developed, lack of large international ports in Andaman Sea, Figure 2.2-4 location of Main ports for AEC and problem of water level of Mekong river, etc.

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2.2.5 Main Airports for ASEAN Economic Community The criterions of main Airports for AEC are as below. 1. The main airports should correspond with Brunei Action Plan (BAP). There are 10 main airports agreed under BAP for connectivity within ASEAN members. 2. The main airports for AEC must have international flights regularly in service. 3. The main airports have to be related to infrastructure developing plans of public and private sectors. 4. The main airports have to have potential to link with other airports in ASEAN region. From the above criterions, there are 7 main airports for AEC in Thailand, which are (1) Suvarnabhumi Airport, Chiang Mai Airport

(2) Don Muang Airport, (3) Chiang Mai Udon Thani Airport Airport, (4) Hat Yai Airport, (5) Phuket Airport, (6) Krabi Airport, and (7) Don Muang Airport Udon Thani Airport. Figure 2.2-4 shows the locations of these main airports. Suvarnabhumi Airport The significant problems of these airports are airport congestion, improper role of airports within the Phuket Airport

region, congestion of air traffic, Krabi Airport problem of policy setting for long term development of airports, and lack of staffs at the airports. Hat Yai Airport

Figure 2.2-5 Locations of Main Airports for AEC

2.3 Efficiency of Current Transport System for ASEAN Economic Community

From the review and analysis of the potential of transport infrastructure and related facilities, it is found that the transport infrastructures in every modes are still insufficiency to support the needs created by AEC in the future. Figure 2.2-6 summarizes the efficiency of the existing transport system.

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Most congested customs checkpoint Airports with most congested passenger terminal Border passes with highest trading value Top three airports with highest passenger in 2012  Nong Khai 112.80%  Phuket 141% in 2012  Suvarnabhumi 52.4 million persons  Aranyaprathet 94.86%  Suvarnabhumi 116%  Sadao 310,052 MB  Phuket 9.2 million persons  Mae Sai 88.20%  Hat Yai 103%  Padang Besar 194,734 MB  Chiang Mai 4.3 million persons Airports with most congested runway  Sangkhlaburi 108,711 MB  Suvarnabhumi 87%  Phuket 79%  Donmuang 71% Airports with most congested parking bay In 2012, traffic volume of main roads  Phuket 85% and surrounding areas of major cities  Suvarnabhumi 72% were more than 50,000 vehicles per International Performance of  Udon Thani 71% day, and more than 150,000 vehicles passenger and freight per day in the areas surrounding transport networks Railway sections with minimum reserved capacity Bangkok. trips on major and terminals in  Kaeng Khoi JCT–Klong Sib Kao – 44.82% transport networks of  Chachoengsao JCT–Sriracha – 38.88% the present year  Chachoengsao JCT–Prachin Buri – 15.90% Customs checkpoints with maximum ASEAN transit people in 2012  Aranyaprathet 4,148,150 persons  Sadao 3,734,704 persons From AADT of ASEAN Highways in 2012, it  Nong Khai 2,952,260 persons was found that the most congested highway sections were in Bangkok Metropolitan Area Most congested ports in 2012 and the eastern region; ranging from Chachoengsao, Prachin Buri, Chon Buri, Customs checkpoints with maximum Ports with maximum freight volume in 2012 transit vehicles in 2012  Laem Chabang (A1) 164% Rayong. Other congested areas included Hat  Laem Chabang 64.6 million tons  Nong Khai 948,570 veh/year  Laem Chabang (B1) 123% Yai, Khon Kaen, Nakhon-Ratchasima, Chiang  Map Ta Phut 50.3 million tons Mai, and main border passes, e.g., Sadao of  Sadao 746,026 veh/year  Bangkok (east quay) 115%  Bangkok 17.9 million tons Songkhla province, etc.  Songkhla 108%  Padang Besar 510,530 veh/year

Guideline for infrastructure development Figure 2.2-6 The linkage between travel volume and the efficiency of the transport network for infrastructure development

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3. Performance of Thailand Economy and Transport Trend after the Beginning of ASEAN Economic Community

3.1 Factors Affecting Cross-Border Trade and Transit

Cross-border trade and transit1 between Thailand and neighboring countries is determined by several factors such as market size, level of economic development, transportation cost and trade regulation. The study of effect of ASEAN Economic Community to the volume of cross-border trade and transit of Thailand can be estimated by the econometric model from a study of ADB Institute, which entitled "Impact of Cross-Border Transport Infrastructure on Trade and Investment in the GMS". This model has concluded that there are only three factors significantly affecting the volume of trade across the border of Thailand and neighboring countries. First factor is the number of population which represents the size of the market. The second factor is GDP which represents the level of economic development. The third factor is the road network which represents the cost of transportation. These variables have impacts on the amount of cross-border trade and transit, which can be expressed through their elasticity as shown in Table 3.1-1.

Table 3.1-1 Effects of changes in factors affecting trade volumes Variables Elasticity Implication Number of Importer¹ 3.29 If the number of Thai importers increases 1%, the amount of Population imported goods will increase 3.29%. Exporter² 1.73 If the number of Thai exporters increases 1% , the amount of exported goods will increase 1.73% GDP Importer¹ 0.39 If GDP of imported country increases 1%, the amount of imported goods from Thailand will increase 0.39%. Exporter² 0.37 If GDP of Thailand increase 1%, the amount of exported goods will increase 0.37% Road Density Importer¹ 0.42 If the road density of imported country increases 1%, the imported goods from Thailand will increase 0.42%. Exporter² 0.45 If the road density of Thailand increases 1%, the exported goods of Thailand will increase 0.45%. Remark : ¹ Given that the associated country acts as a "Importer". ² Given that Thailand acts as an "Exporter"

1 “Cross border goods” is defined as the goods which is delivered between two adjacent countries. “Transit goods” is defined as the goods which is delivered from one country passing through another country and destined in the third country. For example, the conveyance of goods from Thailand, passing through Lao PDR to Vietnam, etc.

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Trade barriers such as tariffs, etc. are considered to be of secondary importance. This is because the tariffs between Thailand and other GMS member countries, which are members of ASEAN, have dropped to 0% in many items for a long time. The tariffs of the remaining goods with rate greater than zero have been dropped continuously, in which the tariff will probably become 0% soon. Thus, the impact of tariffs on trade among GMS countries is not much compared to the other three factors as described earlier.

3.2 Economic Development for Production Base Thriving in Thailand

Regarding to the study of the economic development after entering the AEC, the consultant has divided the study into 5 steps, which are 1) the analysis of International Economic and Trade of Thailand and the other ASEAN country members, 2) The analysis of important production bases in Thailand, 3) the selection of prospect products for serving common production bases of Thailand and ASEAN, 4) The analysis of current performance, problems, obstacles and the potential of economic development for establishing production bases in Thailand, and 5) The evaluation of Infrastructure development and management system of transport logistics in relation to economic development.

3.2.1 The analysis of International Economic and Trade of Thailand and ASEAN

The consultant considered that the most importance concept of establishing AEC is to create the single production base. With this concept, goods, services, investment and skilled workers can be moved freely. In order to determine the direction of development, economic development of Thailand has to follow the direction of AEC economic development. In case of international trading, it is found that consumer products are the majority of goods transfer at border pass between Thailand and neighboring countries such as Myanmar, Lao PDR and Cambodia. The products have been produced within the industrial estates nearby border passes and exported to the nearby neighboring countries. For example, the industrial estates in the north will use Highway No. 1 transport goods through Mae Sai-Thachilek border pass. The industrial estates in the west will use Highway AH1 transport goods through Mae Sot-Myawaddy border pass. The industrial estates in midland and capital area will use Highway No. 1 and 2 transport goods to the northern region and eastern region as well as Laem Chabang port to the rest of the world.

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From the trend of export market around the world, there is an increasing demand of agriculture products for food processing industry, energy and renewable materials. World Bank forecasted that the demand of food will increase about 50 % within 20 years (2013-2032) due to population growth, increasing of medium income population, consumerism, lack of water for agriculture, reduction of land. Moreover, a surge in demand for the energy and renewable materials will be the opportunity for Thailand to expand its export markets of agriculture products to ASEAN and the rest of the world. For the industrial sector, it has produced lot of income for Thailand and has had an important role in economic development of Thailand. From the past, the development of industrial sector has been mainly driven by the idea of using natural resource to promote economic development, which leads to imbalance development of Thailand. Therefore, the development of industrial sector should change to Creativity Driven Growth in order to increase values and competitiveness of the existing high-potential products and also core competency products of Thailand. In terms of economic situation and strategies of neighboring countries, the consultant forecasts that Myanmar and Cambodia will clearly become agricultural production base. Because they are rich in natural resource and a daily wage is just 60 bahts per day. These agricultural products may import to Thailand. Because Thailand has better technologies regarding food processing. While Lao PDR will become transit country in order to link Thailand and China trading or Thailand and deep-sea port in Vietnam. Malaysia, which has similar technologies to Thailand but has less area to become production base, might have mutual agreement on production with Thailand. For example, Malaysia might pass material to process in Thailand for selective products. Vietnam also has higher an unemployed rate as well as lower daily wage than Thailand. So that it might attract investment from other countries, particularly Japan. In order to encourage investment in industry and industrial estate, Vietnam also needs to increase trading with China at the border passes.

3.2.2 Major Production Bases and Commodity Flow of Prospect Products

Production base is one of the important elements that helps connect economic activities. Because it is the place for producing agricultural products and major industries as well as the place for employment and urbanization. AEC will stimulate its country members to integrate their production bases into a single production base. As a result, some industries may move their production bases. While other industries may use production bases in neighboring countries instead. Details of such development can be described as follow.

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1) Agricultural Production Base At present, the agricultural production bases in Thailand have dispersed into every regions depending on the suitability of physical areas and the competitiveness of the products. It is found that there are movements of raw materials from primary sources, in each region or province, to distribution centers in order to process them into new products or final products; and then export or consume within Thailand. The processing factories and exporter warehouses usually locate in industrial estates in the Bangkok Metropolitan Area and Eastern Seaboard. There are also some industrial estates located nearby gateways such as Laem Chabang Port and border passes in which consider as the potential linkages to neighboring countries.

2) Industrial Production Base Most of industrial production bases in Thailand usually concentrate in the industrial estates of BOI Zone. Such areas are Bangchun Industrial Estate and Lat Krabang Industrial Estate in Bangkok Metropolitan Area; Navanakorn Industrial Estate in Pathum- Thani province; Rojana Industrial Estate and High-Tech Industrial Estate in Ayutthaya province; Amata Nakorn Industrial Estate and Hemaraj Industrial Estate in Chon Buri province; Eastern Seaboard Industrial Estate in Rayong province. As for the movement of industrial products, some products transported to domestic distributors, while the other products were transported by containers to main gateways such as Laem Chabang port in order to export to the product to the world. On the other hand, Laem Chabang port also imports primary products for further processing and final products for domestic consumption as well.

3.2.3 Selection of Potential Industries to be the Common Production Bases of Thailand and ASEAN

The consultant selects the target industries by considering both macro level criteria, which has influence on Thailand’s economic and transport-logistics system, and micro level criteria, which has influence on competitiveness in each sector. The criteria are 1) High Impact Factor such as the top ten highest values of import/export products; 2) Transportation Network Factor such as the top ten highest volumes of import/export products to world market; and 3) Integrated Strategic Plan such as the integrated master plans of Ministry of Commerce, Ministry of Industry, Ministry of Agriculture and Cooperatives.

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Results of the selection process show that there are 2 groups of potential products: agricultural products and industrial products. For exported group, the potential agricultural products include rubber and its products, rice, sugar, tapioca products, and dried, frozen, processed and fresh fruits. Next, the industrial products include vehicles and parts, chemicals, finished oil, rubber products, computer accessories and components. For imported group, the potential industrial products include fertilizer, pesticide, timber and its products, coffee, tea, and spices. Next, the potential industrial products include crude oil, chemicals, metal products, computer and its components, automotive equipment and components. These products have a role as the importance players in economic system. Because they are sources of incomes and important production factors. These targeted industries will also play an important roles to promote economic development, especially once transport network is developed and linked with production bases, distribution centers, and gateways. Furthermore, these potential industries have already been integrated with the strategic plans of many governmental organizations for smooth cooperation. Therefore, these potential industries should to be set as pilot industries for further development of the important production bases of Thailand.

3.2.4 Current Situation of Targeted Industries

The situation of agricultural products. It is expected that there will be growth about 3-4 percent a year with plantation and farming as the main driving factors, including fishery, which expected to be stable in the middle of 2014 and be expanded within year after. There are some plantations with the increasing trend such as paddy, maize, sugarcane and palm oil. The prices of commodities are expected to meet the market price of 2013. Particularly, the prices of rice and rubber seem to rise due to continuously recovery of global economy. In terms of export, it is expected that there will be growth which follows market demand and confidence of quality of Thai products that meet international standards. However, there are some risk factors which might have negative impacts to the production of agricultural products such as global economy, exchange rate, oil prices, natural disaster and epidemic, which have to be monitored and evaluated. The situation of industrial products. It was expected that there will be growth in the industries focusing on export. But the industries focusing on domestic purchasing power will slow down due to the reduction of government spending on construction projects and

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slow increase of construction projects of private sectors as well as due to reduction of growth in both demand and supply of real estate sector. However, there are some areas in which gain benefits from the growth of CLMV countries. Tourism industry seems to be struggled with protests and political crisis. Petroleum and energy industry still improve along with the economic growth. While there are some industries that might face the downward trend or slow growth such as furniture industry, textile industry, leather industry, jewelry and accessory industry, etc.

3.2.5 Linkage of Targeted Industries at Border Areas, Important Production Bases, and Inner Domestic Areas

In the analysis of economic linkage in terms of spatial area perspective, the consultant integrated 3 spatial areas which are 1) the production bases of 8 targeted products from previous suggestion by aggregating outputs of each product group in order to identify their spatial potential; 2) the inner areas by considering the locations of distribution centers which consist of market locations of each product and its factory because 2 major transport routes must be considered: the shipment of goods to the markets and the shipment of goods to the processing factories; and 3) border areas by considering gateways as the important production chains of target industries. The potential economic development of Thailand as a production base can be evaluated with the following 3 suggestions: 1) development of targeted export industries as the production base of AEC; 2) development of gateways for targeted import products; and 3) development of production bases for importing and re-exporting products to the rest of the world. 1) Development of targeted export industries as the production base of AEC There is the relationship between inner areas and markets. Provinces having many production bases usually have many markets in their areas such as Nakhon Ratchasima, Nakhon Sawan, Kanchanaburi and Kamphaeng Phet. This situation differs with the provinces having many factories in their areas such as Nakhon Ratchasima, Khon Kaen, Surin and Ubon Ratchathani. In order to link the results of study on economic development and transport network development, the consultant found that the production bases of agricultural products and industrial estates have been dispersed along inner areas as mentioned above. While the locations of major distribution centers are located within the inner areas such as Nakhon Sawan, Nakhon Ratchasima, Phra Nakhon Si Ayutthaya, Pathum Thani, Bangkok Metropolis and Chon Buri.

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In order to link the production bases, the inner areas, and the border areas, this study considers only the important gateways, which have impacted to the potential industries such as Laem Chabang port, Bangkok port, Padang Besar border pass. It is also found that the important gateways are the gateways in Songkhla, Chon Buri and Bangkok Metropolis. However, the development of transport network of this study will cover not only the transport networks of surrounding and within those gateways but also are the transport networks linking the provinces representing the production bases and the inner areas as mentioned above. Kanchanaburi seems to be the proper place for setting up a distribution center. Because there are many important production bases as well as markets and processing factories in its area. Kanchanaburi also has important border passes which can be used to promote the international trade. The main plantation in Kanchanaburi is a sugarcane plantation area with the total area of 0.79 million Rais and a total output of 7.7 million Tons. There are 43 crossing points along the border line with only one permanent border pass at Phunumron where there is a linkage from Kanchanaburi to Dawei deep-sea port. As the result, Kanchanaburi has high potential to be commercial hub and gateway to Andaman Sea. As a result, the government has planned to establish industrial estate and special economic zone in order to promote border trade in the future. 2) Development of gateways for targeted import products The targeted import products are the ones that used as production elements for production sector. Therefore, the development of transport system between border passes and factories will enhance the managing performance of logistics system of all business units. Because it is one of the production factor of many related business units, especially crude oil. The study shows that Sadao border pass is the important pass for imported targeted products, especially computer and its components. While Su-ngai Kolok border pass is the important pass for imported wood logs and timbers which is about 10.56 percent. 3) Development of production bases for importing and re-exporting products to the rest of the world The technique of importing products and re-exporting the products is one of the tools to add values to the products. It also create economic network amongst exporter (production base), importer (distributor) and the third countries (consumer market).

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Therefore, the development of targeted export industries into the single production base of AEC from the previous topic can be enhanced by the development of economic corridors or bordering areas; through the development of common production networks or valued chains between neighboring countries or between inner areas and bordering areas of the country. The development of importing and re- exporting industries is one of the methods to maximize benefits from transport network, particularly re-export of products of neighboring countries as the distributor. As analysis from above data, there are 2 ways in order to develop importing and re- exporting industries, which are 1) developing the competitiveness of logistics providers directly. 2) developing industries with high values of import and export of the same category of products. Then, production bases in neighboring countries or in China or in proper inner areas of Thailand can be used with the transport network in order to promote Thailand as the main distribution center the region. The advanced technology can help adding value to the products before re-export to the third countries. This strategy is in line with the development of production sector which focusing on the development of production technology and on the reduction of need for low labor cost. 3.3 Trend of Thailand’s Trade and Tourism after the Beginning of ASEAN Economic Community (AEC)

3.3.1 Trend of Thailand’s Trade after the Beginning of AEC

The analysis of Thailand’s trade after the beginning of AEC is considered using the following factors.  The factors affecting trade and transit volumes are population, GDP and road network crossing borders (as shown in topic 3.1).  The trend of Thailand’s trade divides into 2 types: Growth Effect or Incremental Effect and Level Effect. The two factors above were used to calibrate the parameters in econometric model, which developed by ADB (as shown in topic 3.1). The model forecasts the cross border and transit trade volumes at all border passes, which considers only the top ten exports with the highest cross border and transit trade. Because the data will be used to estimate the growth rate of import and export products at all land border passes in the future.

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Table 3.3-1 shows values of import and export products in 2015 and 2020 as classified by neighboring countries. According to Table 3.3-1, the highest cross border and transit trade is the one between Thailand–Malaysia, following by Thailand–Lao PDR and Thailand–Myanmar, respectively. However, Thailand–Lao PDR has the highest increasing rate of trade value (both import and export) during the analysis years, following by Thailand–Myanmar and Thailand–Cambodia, respectively. While the trade value between Thailand and Malaysia will be increased at the lowest rate in the future. The trade values of Thailand–Lao PDR and Thailand–Myanmar are increased with the highest rates because of the increasing transit values with China and Vietnam. Particularly, the transit trade via Lao PDF to Vietnam and China constitutes about half of Thailand-Lao PDR trade value and truck volumes. Nevertheless, if those transit trade were neglect, Thailand-Cambodia trade has the highest growth rate.

Table 3.3-1 Import and export values of Thailand’s border trade and transit trade (only Top ten products with highest values) Export Value (Million Baht) Import Value (Million Baht) Border Year Cross-Border Transit Trade Total Cross-Border Transit Total Trade Trade Trade 2012 31,321 7,703¹+14,246² 53,270 21,391 305¹+5,306² 27,002 Thailand – 2015 45,334 12,413¹+26,277² 84,024 28,800 443¹+10,418² 39,661 Lao PDR. 2020 72,015 21,990¹+45,851² 139,856 39,198 658¹+17,215² 57,071 2012 24,142 6,105² 30,247 3,269 2,274² 5,543 Thailand – 2015 30,376 11,262² 41,638 4,073 4,465² 8,538 Myanmar 2020 51,634 19,651² 71,285 6,235 7,378² 13,613 2012 34,255 - 34,255 4,823 - 4,823 Thailand - 2015 50,245 - 50,245 6,707 - 6,707 Cambodia 2020 97,747 - 97,747 13,832 - 13,832 2012 339,017 16,489³ 355,506 126,754 33,478³ 160,232 Thailand - 2015 431,043 19,145³ 450,188 156,434 39,212³ 195,646 Malaysia 2020 574,012 23,047³ 597,059 202,218 47,773³ 249,991 Remark: ¹ Transited to Vietnam ² Transited to China 3 Transited to Singapore Source: Consultant

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3.3.2 Development of Thailand’s Tourism after the Beginning of AEC

According the forecast of UNWTO, there is opportunity and challenge of world tourism related to ASEAN Economic Community as follow;  First, tourism will be a powerful tool in order to develop economy and society as well as reduce poverty in many countries by creating jobs, infrastructure development, and incomes from export.  Second, role of tourism is going to change due to an ambitious goal. Government and politicians together have to raise concern over tourism issues.  Third, the sustainability of society, economy and environment of region will be more important for tourism sector such as energy matters, green house effects, green economics, management of crowded areas and risk management.  Fourth, demand of consumers was changed due to higher experience and expectation, including the change of population such as aging society, immigration, cultural diversity, change in social value and change in life style from service economy to experience economy.  Fifth, the sophisticated competitiveness in terms of modern business ecology such as innovation, products and markets diversification, product development, information technology, marketing and promotion, research, assessment, human resource development and quality, etc.

When considering Thailand tourism opportunities, it is found that all modes of transportation in Thailand such as road, rail, sea and air have potential to accommodate the increasing of tourist volume in the future. Under AEC agreement, it will enhance tourism dimension and diversification such as cultural, tradition and attraction diversity. From actively tourism promotion, Thailand’s government recognizes the importance of tourism development. Particularly, mutual cooperate amongst Tourism Authority of Thailand, Thai Hotel Association, Tourism Council of Thailand, related public and private sectors in order to build up tourism sector strength. It also increases competitiveness in ASEAN region.

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Considering weakness and threat of tourism in Thailand, it was found that lack of long term planning of product development and quality control are the main problems of Thailand tourism sector such as screening tourists, deceiving tourists and problem tracking and joint development of tourism systematically. This weakness has affected the discontinuous long term development, including not utilized tourism resources efficiency in short term. From these reasons, the long term goal of tourism development might not be accomplished. The main threats of tourism are the competitors in region such as Malaysia, Singapore and Vietnam. These countries have developed their tourism sector systematically. The declined of world economy also impacted to tourism industry, including political crisis in Thailand. Last but not least, the unstable of Thailand currency might be one of the risk factors which affected the tourist’s decision to travel in Thailand. The forecast of Tourist numbers in Thailand from 2015 and 2020 is based on the actual number of tourists in 2012. The calculation will include trend and seasonal factors in the forecasting model. However, this model will not take cyclical fluctuation and irregular fluctuation into account such as the impact of political crisis, natural disaster and economic situation of tourist’s countries. Table 3.3-2 shows forecasted tourists after the beginning of AEC in 2015 and 2020 as classified by modes and nationality.

Table 3.3-2 Forecasted tourists after the beginning of AEC in 2015 and 2020 as classified by modes and nationality Forecasted Foreign Tourists after the beginning of AEC in 2015 Mode of Transport Foreigner Thais Total AEC+China Non-AEC Total By Air Transport 6,802,175 20,212,470 27,014,645 6,354,572 33,369,219 By Border Passes 7,409,914 1,174,437 8,584,351 6,324,112 14,908,465 Total 14,212,089 21,386,907 35,598,996 12,678,684 48,277,684 Forecasted Foreign Tourists after the beginning of AEC in 2020 Mode of Transport Foreigner Thais Total AEC+China AEC+China AEC+China By Air Transport 8,949,302 26,592,598 35,541,900 8,379,347 43,921,250 By Border Passes 9,731,753 1,542,438 11,274,191 8,304,689 19,578,883 Total 18,681,055 28,135,036 46,816,091 16,684,036 63,500,133 Source: Analysis of data from the Bureau of Immigration and AOT by consultant.

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3.4 Future Transport Routes after the Beginning of AEC

The opening of Thai-Lao Friendship Bridge about 20 years ago was a turning point of dramatically increasing trade volumes at border pass. For example, the trade volume at Nong Khai border pass between 2001 (before bridge opened) and 2012 has surged up from 3,600 to 66,000 million bahts. This trend is still increasing because the twin city help promote trades to each other. The twin city usually locates within 100 kilometers from the border pass such as Nong Khai-Vientiane and Mae Sot-Myawaddy as shown in Figure 3.4-1.

Source: The consultant Figure 3.4-1 Border Trade of Twin City Concept

Nevertheless, the result of AEC integration in 2015 will be another turning point to closer international trading relationship among members. This is not only just for twin city, but also the connectivity of ASEAN Community will unite as an ASEAN nation. The aims of connectivity are economic mutual benefits and also create TTR with the total distance of 4,477 km in Thailand as shown in Figure 3.4-2.

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Source: ERIA Study Team (October 2010) ASEAN Strategic Transport Plan 2011-2015, Final Report Figure 3.4-2 Transit Transport Route: TTR In order to develop TTR to meet international standard and create the efficiency of facilitation of interstate transport of goods, this important strategic plan will connect ASEAN with Western China completely. In addition, China has the largest population in the world and the second largest in terms of economy size after USA. Chinese government policy toward Western China development equals to Eastern China development in which is the current hub of country development. In order to stimulate economic growth, China needs trading and investment with neighborhood countries. For example, the development of Guangxi (its capital is Nanning) as the gateway connects Western China with the open sea as well as other regions in Eastern China was connected by roads such as Yunnan (its capital is Kunming) and Sichuan (its capital is Chengdu). Guangxi and Yunnan are the most influence to ASEAN because they are the closest provinces in terms of distance, particularly Yunnan which also under GMS agreement as well. According to the Chinese policy, the ASEAN production base and economic nodes will be considered together in order to define route, goods transport and tourism destinations which can connect from Thailand as shown in Figure 3.4-3.

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Figure 3.4-3 Potential routes after beginning of AEC between Bangkok and main gateways

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The transport trend of Thailand and neighboring countries can be summarized as follows:

The transport trend of Thailand and Myanmar Myanmar is the first country in ASEAN that connect with India through a highway called AH-1 at Tamu in which located at Myanmar-India border pass. Most terrains of Myanmar are high mountains and vast areas of agricultural farming. It is expected that the goods transport between Thailand and Myanmar expected to use AH-1 as the main route passing through Mae Sot-Myawaddy border pass to Mawlamyine and Yangon by 2020. While trade at Mae Sai-Thachilek border pass will continue with the twin city concept.

The transport trend of Thailand and Lao PDR Lao PDR is the important chain for connecting trade route between Thailand and China. Goods can be delivered from Thailand by passing Lao PDR to Kunming, Yunnan via highway AH-3 in Thailand and highway R3A in Lao PDR by passing through Chiang Khong/Huay Xai at the third Mekong River Bridge. Another transport route is via highway AH-16 in Thailand then passing through Mukdahan-Savannakhet border pass to highway R9 in Lao PDR and connect to Da Nang port in Vietnam. Another alternative route is via highway AH-15 in Thailand then passing through Nakhon Phanom-Khammouan border pass to highway R12 in Lao PDR and connects to Vinh or Hanoi in Vietnam (proximity to Hai Phong port) for transit to Nanning, Guangxi.

The transport trend of Thailand and Vietnam Vietnam has special geographic characteristics which create good opportunity to develop deep sea ports along the coastal areas from North to South. With these ports, goods transport to American continent will be shortening compared with that from Singapore. Using short sea shipping concept, the route begins from AH-1 in Thailand passing through Aranyaphathet-Poi pet border pass to Cambodia and connects to Vung Tau deep sea port in the southern Vietnam. In addition, AH-15 and AH-16 can be another routes passing Lao PDR to Vietnam as well.

The transport trend of Thailand and Cambodia Due to the daily wage in Cambodia is quite low compared to the daily wage in Thailand, Malaysia and Singapore, the labor-intensive industries have been moved from Thailand, Malaysia and Singapore to Cambodia. Therefore, there will be more transportation of raw

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materials from these countries to Cambodia in the future. Cambodia might connect between Thailand and the southern Vietnam via ASEAN highways passing through Aranyaphathet-Poi pet border pass to Phnom Penh then passing through Bavet/Moc Bai border pass and connects to Vung Tau deep sea port in Ho Chi Minh City.

The transport trend of Thailand and Malaysia Malaysia has similar economic basis to Thailand and also has a large number of skilled labors that can produce advanced technology products. Therefore, there are industrial estate investments in the major cities of Malaysia. Malaysia has also put higher priority for trading at Thailand border passes. Malaysia has an advantage in which its location is closer to the world’s major shipping route. Thus, Malaysia always develops their ports to meet with international standards in order to compete with Singapore. Malaysians have the third highest average income after Singaporeans and Bruneians, with high purchasing power lead to high volume and value trading at border passes. In addition, Malaysia has encouraged the lower cost of sea freight compared with Thailand. Therefore, Thailand’s entrepreneurs have exported their products through Penang port, Port Klang and Port of Tanjung Pelepas in Malaysia instead of via Songkhla port. This problem still exists due to a legal loophole. As soon as the double-license registration of vehicle has been solved, the entrepreneurs could transport their products transit through Malaysia to Singapore directly.

3.5 Freight and Passenger Transport via Main Gateways and Major Transport Routes after the Beginning of AEC 3.5.1 Future Truck Volume via Main Gateways

This part shows the forecast of truck traffic volume by each neighboring country. The data from table shows truck volume from 9 main gateways. The data of transportation volume will show the number of trucks crossing border per year. This data was collected at the border passes in 2012 as base year. The forecasts use the rate of increasing in trading values from econometric model. The forecast model also concludes the volume of cross border trade and transit trade from Thailand to Vietnam and the Southern China as shown in Table 3.5-1.

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Table 3.5-1 Amount of freight trucks through main border passes in year 2012, 2015 and 2020 unit : vehicles per year 2012 2015 2020 Frontier Border pass In Out Total In Out Total In Out Total Chiang Khong 19,726 20,557 40,283 37,487 55,876 93,363 94,661 111,466 206,127 Thailand- Nong Khai 98,085 104,430 202,515 139,834 159,747 299,581 198,722 239,067 437,789 Lao PDR Mukdahan 35,466 39,409 74,875 50,562 60,284 110,846 71,855 90,217 162,072 Nakhon Phanom 4,518 13,285 17,803 9,512 30,010 39,522 13,517 44,911 58,428 Total Thailand-Lao 157,795 177,681 335,476 237,395 305,917 543,312 378,755 485,661 864,416 Thailand- Mae Sai 13,810 13,817 27,627 19,332 18,488 37,820 26,902 24,549 51,451 Myanmar Mae Sot 874* 18,549 19,423 20,592 25,168 26,042 35,187 43,006 43,880 Total Thailand-Myanmar 14,684 32,366 47,050 39,924 43,656 83,580 62,089 67,555 129,644 Thailand- Aranyaprathet 56,059 57,210 113,269 79,706 86,564 166,270 164,380 168,402 332,782 Cambodia Total Thailand-Cambodia 56,059 57,210 113,269 79,706 86,564 166,270 164,380 168,402 332,782 Thailand- Sadao 166,255 172,871 339,126 204,524 221,266 425,790 261,334 293,453 554,787 Malaysia Padang Besar 20,107 121,907 142,014 24,735 156,035 180,770 31,606 206,940 238,546 Total Thailand-Malaysia 186,362 294,778 481,140 229,259 377,301 606,560 292,940 500,393 793,333 Remark: * Mae Sot Customs have completed data of outgoing truck and uncompleted data of incoming trucks. Source: Data from the Department of Customs and analysis by the consultant

From the forecast in 2015 above, it is found that Thailand-Malaysia border pass has the highest number of trucks crossing border with 607,000 trucks per year. The second highest number of trucks crossing border is Thailand-Lao PDR border pass with 543,000 trucks per year. The most potential gateway is Sadao because it has the most trading volume and significantly impacted to Thailand economy. From the forecast in 2020 above, Thailand-Lao PDR border pass might have higher truck volumes than that of Thailand-Malaysia border pass. Thailand-Lao PDR border pass is expected to have about 864,000 imported and exported trucks in total. At the same time, Thailand-Malaysia border pass is expected to have about 793,000 imported and exported trucks in total. When considering forecasts in 2020, it is found that Sadao border pass will have the highest truck volume followed by border pass at Nong Khai, Aranyapratet, Padang Besar and Chiang Khong, respectively. Because there will be many imported and exported products between Vientiane and border areas of Nong Khai, Thailand.

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3.5.2 Future Passenger Volume via Main Gateways

The future passenger volumes via main gateways are from the expected number of inbound and outbound passengers in 2015 and 2020. The future passenger volumes are represented in terms of number of private vehicles per year. Therefore, the number of passengers per year was estimated first, and then the expected number of vehicles per year was obtained by using averaging number of passengers per vehicle. The number of vehicles used in this study was from data collection in 2012 (base year). And, the number of passengers per vehicle was assumed to be the same number from 2012 to 2020. Table 3.5-2 and Table 3.5-3 show the numbers of inbound and outbound passengers through the main gateways in year 2012, 2015 and 2020.

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Table 3.5-2 Total numbers of inbound and outbound passengers through the major gateways for AEC in year 2012, 2015 and 2020 the numbers of inbound and outbound passengers (person per year) Frontier Immigration Office 2012 2015 2020 In Out Total In Out Total In Out Total Thailand- Chiang Khong 178,113 227,440 405,553 261,835 334,349 596,184 350,395 447,434 797,828 Lao PDR Nong Khai 2,644,494 2,673,804 5,318,298 3,636,293 3,676,595 7,312,888 5,139,949 5,182,877 10,322,826

Mukdahan 1,325,709 1,355,971 2,681,680 1,783,136 1,823,839 3,606,975 2,475,394 2,531,900 5,007,295

Nakhon Phanom 268,894 247,038 515,932 362,347 332,895 695,243 484,903 445,489 930,392 Total Thailand-Lao (persons per year) 4,417,210 4,504,253 8,921,463 6,043,611 6,167,679 12,211,290 8,450,641 8,607,700 17,058,341 Thailand- Mae Sai 2,060,311 2,048,534 4,108,845 2,776,367 2,760,496 5,536,863 3,715,405 3,694,167 7,409,572 Myanmar Mae Sot 581,967 551,068 1,133,035 765,312 724,678 1,489,990 1,024,160 969,783 1,993,942 Total Thailand-Myanmar (persons per year) 2,642,278 2,599,602 5,241,880 3,541,678 3,485,175 7,026,853 4,739,564 4,663,950 9,403,514 Thailand- Sa Kaeo Cambodia 7,066,770 6,919,633 13,986,403 8,180,670 8,010,340 16,191,010 9,953,035 9,745,804 19,698,839 Total Thailand-Cambodia (persons per year) 7,066,770 6,919,633 13,986,403 8,180,670 8,010,340 16,191,010 9,953,035 9,745,804 19,698,839 Thailand- Sadao 2,170,225 2,151,684 4,321,909 2,698,390 2,676,584 5,374,974 3,643,234 3,614,788 7,258,022 Malaysia Padang Besar 433,708 447,411 881,119 610,873 599,890 1,210,763 817,486 802,788 1,620,274 Total Thailand-Malaysia (persons per year) 2,603,933 2,599,095 5,203,028 3,309,263 3,276,474 6,585,737 4,460,720 4,417,575 8,878,296 Grand Total 16,730,191 16,622,583 33,352,774 21,075,222 20,939,667 42,014,890 27,603,961 27,435,029 55,038,990 Source: Data from the Bureau of Immigration and analyzed by the consultant.

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Table 3.5-3 Expected number of buses and passenger cars through potential border passes for AEC in Year 2012, 2015 and 2020 Expected number of buses and passenger cars through the border pass with AEC 2012 2015 2020 Frontier Border pass Passenger cars Bus Passenger cars Bus Passenger cars Bus (vehicles) (vehicles) (vehicles) (vehicles) (vehicles) (vehicles) Chiang Khong 2,341 9 78,472 5,707 103,041 7,494 Nong Khai 738,255 7,800 1,037,195 11,100 1,323,753 14,576 Thailand-Lao PDR Mukdahan 239,206 10,793 340,419 15,360 447,002 20,169 Nakhon Phanom 49,719 5,085 77,832 7,960 102,201 10,453 Total Thailand-Lao PDR 1,029,521 23,687 1,533,917 40,127 1,975,996 52,691 Mae Sai 458,758 24,145 868,324 45,701 1,140,137 60,007 Thailand- Mae Sot 54,213 0 77,698 3,885 102,042 5,102 Myanmar Total Thailand-Myanmar 512,971 24,145 946,023 49,586 1,242,179 65,109 Aranyaprathet 246,815 0 382,860 34,318 502,731 45,063 Thai-Cambodia Total Thai-Cambodia 246,815 0 382,860 34,318 502,731 45,063 Sadao 365,974 40,926 520,825 58,243 752,282 84,126 Thailand-Malaysia Padang Besar 41,197 1,518 58,628 2,160 76,985 2,837 Total Thailand-Malaysia 407,171 42,444 579,453 60,403 829,266 86,963 Grand Total 2,196,478 90,276 3,442,253 184,434 4,550,173 249,826 Source: Data from the Department of Customs and analysis by the consultant.

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3.5.3 Future Number of Trucks and Passengers on Main Highways

The opening of AEC will lead to free trade, creating free movement of products and tourism, and also the labors passing through all gateways such as border pass checkpoints, airports and ports. Therefore, trucks and passengers from neighboring countries might travel to inner areas of Thailand. Table 3.5-4 shows that the opening of AEC has quite low impact on main highways of inner areas of Thailand. It is estimated that the opening of AEC will increase traffic volume on main highways by less than 5 % when compared to the current situation. Therefore, traffic congestions will be the results of domestic trips and will be remained at the same locations such as Bangkok Metropolitan Area, central region and eastern region of Thailand. The impacts of AEC opening will be at areas of border passes. For example the traffic on the friendship bridge at Nong Khai-Lao PDR border pass will increase about 14.8 % in 2015 and 16.2 % in 2020, and traffic on main highway linking Hat Yai and Sadao will increase about 10.5 % in 2015 and 10.9 % in 2020. Specifically, the opening of AEC will have direct impacts on the capacity and efficiency of border passes, airports, ports, distribution centers (DC) and intermodal facilities rather than on main highways.

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Table 3.5-4 AADT on Main Highways in 2015 and 2020 after the opening of AEC

Section Name AADT Normal Growth from AADT AADT Change of Traffic (vehicle/day) NAM Model (vehicle/day) (vehicle/day) (%) Highway Highway Name ASEAN (with normal growth) (%) (Increments from (Including (Including Number Highway AEC effect) AEC effect) AEC effect) 2012 2015 2020 2011-2016 2016-2020 2015 2020 2015 2020 2015 2020 Northern region 1 Phahonyothin Nakhon Sawan-Kamphaeng Phet-Tak AH1, AH2 38,625 45,924 58,952 5.94 5.12 581 769 46,505 59,721 1.3 1.3 1 Phahonyothin Tak-Lampang-Phayao-Mae Chan-Chiang Rai AH2 29,101 32,890 39,302 4.16 3.63 1,008 1,553 33,898 40,856 3.1 4.0 1 Phahonyothin Mae Chan-Mae Sai AH2 9,353 10,552 12,454 4.10 3.37 2,608 3,429 13,160 15,883 24.7 27.5 1152, 1020 - Chiang Rai-Chiang Khong AH3 9,100 10,318 12,465 4.28 3.85 486 868 10,805 13,333 4.7 7.0 12 - Tak-Mae Sot AH1 8,538 10,054 12,792 5.60 4.94 296 417 10,350 13,210 2.9 3.3 117 - Nakhon Sawan-Pichit-Phitsanulok AH13 26,564 30,382 36,875 4.58 3.95 97 174 30,479 37,049 0.3 0.5 11 - Phitsanulok-Uttaradit-Phrae AH13 22,145 25,057 30,503 4.20 4.01 97 174 25,155 30,677 0.4 0.6 101 - Phrae-Rong Kwang AH13 13,007 14,729 17,785 4.23 3.84 97 174 14,826 17,959 0.7 1.0 101 - Rong Kwang-Nan (Huai Kon) AH13 5,682 6,387 7,573 3.98 3.46 13 17 6,400 7,590 0.2 0.2 Northeast region 1 Phahonyothin Bang Pa-in – Wangnoi - Saraburi AH1 107,514 123,947 157,887 4.86 4.96 2,661 3,824 126,608 161,712 2.1 2.4 2 Mittraphap Saraburi – Nakhon Ratchasima AH12 44,776 50,698 60,904 4.23 3.74 1,063 1,412 51,761 62,316 2.1 2.3 2 Mittraphap Nakhon Ratchasima – Khon Kaen AH12 104,174 118,534 139,696 4.40 3.34 5,315 7,059 123,849 146,755 4.5 5.1 2 Mittraphap Khon Kaen – Udon Thani AH12 30,216 34,000 42,218 4.01 4.43 4,252 5,335 38,251 47,553 12.5 12.6 2 Mittraphap Udon Thani – Nong Khai AH12 35,343 39,698 47,078 3.95 3.47 3,693 4,866 43,390 51,944 9.3 10.3 2 Mittraphap Nong Khai – Thai-Lao Friendship Bridge AH12 23,436 26,555 31,717 4.25 3.62 3,693 4,866 30,248 36,583 13.9 15.3 12 - Khon Kaen - Mukdahan AH16 21,290 24,528 30,938 4.83 4.75 1,063 1,724 25,590 32,662 4.3 5.6 22 - Udon Thani – Nakhon Phanom AH15 12,792 14,335 17,210 3.87 3.72 559 469 14,894 17,679 3.9 2.7 Source: The consultant

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Table 3.5-4 AADT on Major Highways in 2015 and 2020 after the beginning of AEC (Cont’d)

AADT Normal Growth from AADT AADT Change of Traffic (vehicle/day) NAM Model (vehicle/day) (vehicle/day) (%) Highway Highway Section Name ASEAN (with normal growth) (%) (Increments from (Including (Including Number Name Highway AEC effect) AEC effect) AEC effect) 2012 2015 2020 2011-2016 2016-2020 2015 2020 2015 2020 2015 2020 Southern region 4 Phetkasem Nakhon Pathom - Chumphon AH2 28,349 32,825 41,860 5.01 4.98 341 468 33,166 42,328 1.0 1.1 41 Phetkasem Chumphon - Phatthalung AH2 24,906 29,109 35,480 5.34 4.04 3,415 4,684 32,524 40,163 11.7 13.2 4 Phetkasem Phatthalung - Hat Yai AH2 30,931 36,187 44,150 5.37 4.06 3,415 4,684 39,602 48,833 9.4 10.6 4 Phetkasem Hat Yai - Sadao AH2 48,386 56,535 71,567 5.33 4.83 3,415 4,684 59,950 76,251 6.0 6.5 42, 43 - Hat Yai - Sungai Kolok AH2 17,317 20,563 26,145 5.89 4.92 300 380 20,863 26,525 1.5 1.5 Central region 32 Asian Highway Bang Pa-In - Ang Thong AH1, AH2 163,631 181,919 219,699 3.59 3.85 678 943 182,597 220,642 0.4 0.4 32 Asian Highway Ang Thong - Nakhon Sawan AH1, AH2 46,052 51,499 61,456 3.80 3.60 678 943 52,177 62,399 1.3 1.5 Eastern region 33 - Saraburi-Prachin Buri-Sa Kaeo AH1 16,812 20,858 30,623 7.45 7.98 1,598 2,413 22,457 33,035 7.7 7.9 33 - Sa Kaeo-Aranyaprathet AH1 12,995 16,150 23,616 7.52 7.90 1,598 2,413 17,749 26,028 9.9 10.2 7 - Motorway (Bangkok-Chachoengsao) AH19, AH123 81,572 96,110 128,018 5.62 5.90 668 953 96,778 128,972 0.7 0.7 7 - Motorway (Chachoengsao- 67,299 84,551 113,158 7.90 6.00 668 953 85,219 114,112 0.8 0.8 AH19, AH123 Laem Chabang Port) 36 - Chon Buri-Map Ta Phut Industrial Estate AH123 59,632 72,746 102,742 6.85 7.15 348 471 73,094 103,213 0.5 0.5 3 Sukhumvit Rayong-Chanthaburi-Trat AH123 18,648 22,436 30,992 6.36 6.67 8 10 22,444 31,002 0.0 0.0 3 Sukhumvit Trat-Khlong Yai (Ban Khlong Luek) AH123 11,271 13,581 18,847 6.41 6.77 8 10 13,589 18,857 0.1 0.1 Nakhon Ratchasima-Prachin Buri- 18,133 21,436 28,366 5.74 5.76 532 765 21,969 29,131 2.5 2.7 304 - AH19 Chachoengsao 331 - Chachoengsao-Chon Buri AH19 12,908 15,127 20,422 5.43 6.19 532 765 15,659 21,187 3.5 3.7 Source: The consultant

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Table 3.5-4 AADT on Major Highways in 2015 and 2020 after the Integration of AEC (Cont’d)

AADT Normal Growth from AADT AADT Change of Traffic (vehicle/day) NAM Model (vehicle/day) (vehicle/day) (%) Highway Highway Section Name ASEAN (with normal growth) (%) (Increments from (Including (Including Number Name Highway AEC effect) AEC effect) AEC effect) 2012 2015 2020 2011-2016 2016-2020 2015 2020 2015 2020 2015 2020 Bangkok Metropolitan and Its Vicinity 9 Kanchanapisek Eastern Bangkok Ring Road AH2 143,134 168,980 217,440 5.69 5.17 978 1,377 169,957 218,817 0.6 0.6 9 Kanchanapisek Western Bangkok Ring Road AH2 91,894 110,068 143,854 6.20 5.50 68 94 110,136 143,949 0.1 0.1 9 Kanchanapisek Southern Bangkok Ring Road AH2 143,134 174,440 233,760 6.82 6.03 68 94 174,507 233,854 0.0 0.0 1 Phahonyothin Pratunam-Bang Pa-In - 100,496 115,960 147,269 4.89 4.90 416 565 116,376 147,834 0.4 0.4 Source: The consultant

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3.6 Efficiency of Future Transport System under Existing Transport Plan

The consultant analyzed the efficiency of transport system with all committed projects. The consultant reviewed all plans and projects related to the development of transport system and its terminals. The information was then used in conjunction with transport demand of each mode in the future: 2015 (the beginning year of AEC) and 2020 (5 years after the beginning of AEC). Note that 2020 is the year in ASEAN Vision that all member countries of AEC fully participate with each other under AEC concept. Table 3.6-1 shows transport development plans and projects used in demand forecast in the future.

Table 3.6-1 Transport development plan used in the efficiency analysis of transport system and its terminals in the future Project Name Description Type of Plan Implementation Year Development of Don Muang Airport Improvement of passenger terminal with 2015 handling capacity of 30 million passengers per year (completed in 2015) Development of Phuket Airport -Construction of Terminal X with handling 2015 and 2020 capacity of 5 million passengers per year which can increase the total capacity to 10.5 million passengers per year Development (completed in 2014) Plan of Air -Construction of new international Transport passenger terminal with handling capacity of 12.5 million passengers per year (completed in 2017) Development of Suvarnabhumi Airport Improvement of passenger terminal with 2020 Phase 2 handling capacity of 60 million passengers per year (completed in 2020) Development of Laem Chabang Port Increase of port capacity to 18.8 million Development After 2020 Phase 3 TEUs per year (completed after 2020) Plan of Maritime Transport Source: The consultant

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Table 3.6-1 Transport development plan used in the efficiency analysis of transport system and its terminals in the future (Cont’d) Project Name Description Type of Plan Implementation Year Development of Double-Track Railway The construction of double track can 2020 Phase 1 (6 sections) increase handling capacity (year 2020) - Chachoengsao-Khlong Sib Kao-Kaeng Koi - Lop Buri-Nakhon Sawan-Paknampho Development - Map Kabao-Thanon Chira JCT Plan of - Thanon Chira JCT-Khon Kaen Railway - Nakhon Pathom-Nong Pla Duk-Hua Hin Transport - Prachuap Khiri Khan-Chumporn Purchase of 20 Diesel Locomotives Provide more locomotives for better 2015, 2020 operation Replacement of 56 locomotives Replace the old locomotives for better 2015, 2020 operation Construction of the Second Thai- The new river bridge will be located on Development 2020 Myanmar Friendship Bridge the north of the existing bridge Plan of Land Construction of the Fifth Thai-Lao The road R8 will be linked with the new Transport 2020 Friendship Bridge at Buengkan bridge Development of New Sadao Customs New Sadao customs house has total Development 2015, 2020 House area of 661 rais. Plan of Development of New Aranyaprathet Border Pass Customs House at Ban Nong Ian- New customs house for freight transport 2020 Stungbot Construction of Inter – City Motorway Increase the road transport efficiency Development 2020 and solve traffic problem on major Plan of highways ASEAN Construction of Four-Lane Highway Increase the highway capacity highway 2015, 2020 (Phase 2) Source: The consultant

From the efficiency analysis of transport system and its terminals under committed projects, it is found that Thailand will struggle with the transportation problems if there are no extra plans or projects for the surplus demand after the beginning of AEC in 2015. As a result, Thailand will lose the opportunity to develop country in the other dimensions. The problem of transport system can be summarized as follows:

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1. Traffic congestion on ASEAN Highway The beginning of AEC will lead to economic expansion, especially in industrial sector, trade and tourism. Such expansion will create congestion in some ASEAN highway such as AH1, AH2 (eastern circle), AH2 Hat Yai-Sadao, AH2 (Ang Thong-Bang Pa-in), AH12 (Udon Thani-Khon Kaen) as shown in Figure 3.6-1.

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,AH

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AH AH AH Figure 3.6-1 The forecast of traffic congestion on ASEAN Highway 2. Traffic congestion at border-pass areas  Traffic congestion at border pass The border pass in which traffic volumes exceed the capacity of related highways is Sadao border pass. The situation will occur since 2015.  Traffic congestion within parking lots The border passes in which their demand for parking is more the capacities of the related parking lots are Aranyaprathet, Sadao, Nong Khai and Padang Besar. Especially, Nong Khai and Padang Besar is now (2012) are already congested as shown in Figure 3.6-2.

500% 450% 400% 400% 350% 300% 300% 2012 250% 2012 200% 200% 2015 150% 2015 100% 100% 2020 50% 2020

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Nakornpanom Aranyaprathet Nakornpanom The traffic volume at border pass The capacity of parking lots Figure 3.6-2 The forecast of traffic at border pass

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3. Traffic congestion at some sections of railway system The study shows that many sections of railways will have no reserved capacity from 2015, such as Kaeng Khoi junction-Khlong Sib Kao, Chachoengsao junction-Prachin Buri and Bann ChongTai-Lum Narai. The demand of those sections was operated over the capacities of trains by 62.21%, 29.82% and 5.78%, respectively. The top three congested sections are Chachoengsao junction-Prachin Buri, Bann ChongTai-Lum Narai and Denchai-Lampang. These sections as shown in Figure 3.6-3 were operated over the capacities of trains by 75.25%, 42.8% and 16.84%, respectively. 40% 20% 0% -20% 2011 -40% -60% 2015 -80% -100% 2020 Kaeng Khoi J.- Chachoeangsao J.- Ban Chong Tai- Denchai-Lampang Khlong Sib Kao Prachin Buri Lam Narai Figure 3.6-3 The forecast of reserved capacity of railway sections

4. Congestion of ports Without any future development plan, the demand for ports will over the capacity of some ports such as Songkhla port, Map Ta Phut port and Bangkok port. Particularly, Laem Chabang port will meet 80 percent of its capacity within 2020. So that the third- phase expansion of the port should be upgraded to its capacity of 18.8 million TEU in 2020. Figure 3.6-4 shows the forecasted density of the ports.

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Songkla Songkla

Bangkok Chabang Chabang Maptaphut Maptaphut Figure 3.6-4 The forecasted density of the ports

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5. Congestion of airport The efficiency of passenger service and plane service of the airport can be determined by 3 factors: (1) capacity of Passenger Terminal (2) capacity of Runway (3) capacity of Parking Bay. The analysis results show that the airports, in which passenger terminals are over their capacities from 2015, are Suvarnabhumi airport, Hat Yai airport and Phuket airport. Moreover, the airports that will over their capacities from 2020, are Chiang Mai airport and Krabi airport. As for the runway analysis, the airports, in which their runways are over capacities from 2015, are Don Muang airport and Phuket airport. Moreover, the airports that will over their runway capacities from 2020, are Suvarnabhumi airport, Chiang Mai airport and Udon Thani airport. As for parking bay analysis, the airports, in which their parking bays are over capacities from 2015, are Hat Yai airport, Udon Thani airport and Phuket airport. Moreover, all of airports will over capacities of their parking bays from 2020. Figure 3.6-5 shows the expected density of airport capacity. However, the situation of over capacities of airports as mentioned above may come sooner once Lion Air provides service at Hat Yai and other airports in Thailand.

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Figure 3.6-5 The forecasted density of airport capacity

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4. Analysis of Transport Standards and Facilities for ASEAN Economic Community

The development of logistics standards in recent decades was driven by innovation and expansion of free trade. Transport logistics is one of the key success factors of free trading due to sophisticated supply chain of modern logistics ecosystem. The modern logistics consists of hard components and soft components, for example, transportation system, warehouse, border pass procedure, and payment system, etc. The development of logistics standard cannot complete by one side development, for example, developing only transport system would not be able to enhance Thailand logistics standard effectively. Moreover, the logistics developments will not successful without policy and investment from government.

4.1 Standards of Transport and Logistics Services at Border Passes

In the developed countries, the policy and investment from government contributed significantly to logistics system performance and also sustainably support economic growth. ASEAN and GMS have been formed from countries with different background in economic, social and political system. Therefore, different countries have different standards of logistics system. From the analysis, this report suggests the development plan for improving Thailand logistics system to meet international standard.

4.1.1 Performance of Transport Logistics System of Country Members of ASEAN and GMS Members

World Bank ranking has been ranking the efficiency of logistics system from 155 countries for every 2 years using Logistics Performance Index (LPI). LPI consists of 6 importance elements, which are customs system, infrastructure, services quality, international transport, tracking system and reliability. The country with the highest LPI score in 2012 was Singapore, which is one of ASEAN members. Thailand was ranked at 38th by World ranking and third by ASEAN ranking. The first and second rank of ASEAN were Singapore and Malaysia, respectively. On the other hands, consider among GMS members, country with the highest LPI score was China, Thailand and Vietnam respectively.

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There were 2 elements that Thailand was scores less than 3 which consider as Logistics Unfriendly. The elements were customs system and services quality. Particularly, the customs system doesn’t conclude only the customs procedure, but also authorized process and importance data links from related organizations. Put in this way, the development of customs department cannot be efficiency without parallel development of related organizations. The score of customs system were always under expected level. To promote trading and investments, these weaknesses of Thailand logistics system need to be solve urgently if Thailand aim to be a hub of region. The suggestion for developing customs system is integrated all organizations which associated to border pass together in order to enhance convenience, simplicity, standard and to reduce redundant work. Moreover, the parallel development of all organization associated to border pass will guarantee success. The suggestion for development of services quality is developing the quality of logistics providers and human resource of all organization associated to border pass for code of conduct and responsibility.

4.1.2 Standards of Transport Logistics System of ASEAN and GMS Country Members

As the secondary data from the Word Bank research, the supply chains of shipping and air transport of Thailand have low competitiveness compared to overall ASEAN and GMS countries. Because the transport cost is at the highest level in term of export and the second highest level in term of import. However, Thailand has the competitive advantage in terms of road transport because the cost of road transport is the second lowest cost compared to that of rivals. To be a hub of region, Thailand has to develop all transport modes not just only focusing on road transport. The success of regional integration cannot be completed by just developing the hard infrastructure. The soft infrastructure is also essential. The soft infrastructure consists of the transport agreement and border pass procedure. The use of electronic system such as X-ray instead of physical inspection and the collaboration of officers from 2 countries (Single Window Inspection and Single Stop Inspection) as well as the standard of assessment and documentation have to be similar standards. The processing time at border pass will be the indicator. Table 4.1-1 shows processing time at border pass among ASEAN and GMS member countries. However, there are some products have to get permission from the Minister of Commerce in order to import/export. In such case, the product will take longer time in ceremonies across the region.

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Table 4.1-1 Processing Time at Border Pass Processing Time at Border Pass (days) Physical Inspection Multiple Inspection Country Without Physical With Physical % Import % Shipments Inspection Inspection Shipments Physically Inspected Singapore* 0 1 1 1 China*** 2 4 17 5 Malaysia* 1 1 6 3 Thailand** 1 1 5 2 Philippines* 2 4 6 2 Vietnam** 1 2 8 8 Indonesia* 1 4 31 18 Cambodia** 1 1 11 3 Myanmar** 2 3 75 75 Lao PDR** 3 2 75 75 Remark : Brunei is excluded in the ranking *Only Asean member countries **Both GMS and Asean member countries ***Only GMS member countries Source : Logistics Performance Index 2012, The World bank

Data from surveys shows that the international logistics system of Thailand will not fully developed if the standards of ceremonies across Myanmar and Lao PDR are no developing along with Thailand’s system which uses less time. Furthermore, the standard of transport regulation for crossing border between Thailand and neighborhood countries is quite different due to long time used in ceremonies across border. Therefore, using the same standard to manage border is needed to guarantee the successful integration of ASEAN with transportation system leading such integration. Besides new technologies to control freight transportation, such as X-ray, e-Seal, GPS and RFID, should be implemented in ASEAN and GMS country members before the beginning of free trade.

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4.1.3 Logistics Standard Problems in ASEAN and GMS Country Members

The weakness of Thailand transportation infrastructures network are railway system, port, airport, road and distribution center. Particularly railway system, it was the lowest score and need urgent improvement. Due to transport trend of the world, transport by container become more popular and ports developing countries are reaching their limitation. These might be threat to logistics connectivity to the rest of the world supply chain. So that it is important to invest to expand or build new ports to support the increasing demands. The service standard of Thailand is consistent with its infrastructure standard: the satisfaction level of the rail service is at the lowest level when compared to that of the other modes. The study shows that it is urgent to develop rail network system infrastructure and the management of border pass. The first cause of delay occurs when transferring goods from ships to other modes. The second cause of delay occurs when inspecting goods before transport. The third cause of delay occurs is the corruption problem. The reliability can indicate from punctuality. The study found that export is more reliable rather than import. This might be because import process is take long procedure and more complicate than export. For example, the customs department will not do export inspection (except some necessary cases), which is opposite for import.

4.2 Exchange of Traffic Rights, Safety Standard of Freight, Requirements for the Admittance of Road Vehicles and Market Access and Licensing

The ASEAN Framework Agreement on the Facilitation of Goods in Transit (AFAFGIT) consist of 9 protocols. 7 protocols have been implemented. The other two protocols have not been implemented, which are the second protocol (designation of frontier posts) and the seventh protocol (customs transit system). For the already implemented 7 protocols, 6 protocols have been ratified by all country members. Except for the ninth protocol (dangerous goods), Thailand and Malaysia have not ratified the protocol yet. Table 4.2-1 shows the progress of the agreement under the ASEAN framework.

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Table 4.2-1 The progress of the agreement under the ASEAN framework Framework Agreement Objectives/Descriptionห Current Status of Thailand 1. ASEAN Framework  To facilitate goods in transit between and - Signed on February 17th, 1999 Agreement on the among the Contracting Parties, to support the - Ratified for protocols 1, 3, 4, 5, 6 and Facilitation of Goods implementation of the ASEAN Free Trade Area 8. Protocol 2 and 7 were under in Transit (AFAFGIT) and to further integrate the region’s economies; edited by ASEAN members. Protocol  To simplify and harmonize transport, trade and 7 was signed for content verification customs regulation and requirements for the by Philippines except Thailand. purpose of facilitation of goods in transit; and - Protocol 9 (Dangerous goods) is not  To establish an effective, efficient, integrated ready since Malaysia and Thailand and harmonized transit transport system in have not ratified this protocol. ASEAN. Thailand is under process of There are 9 protocols in this agreement. improving the domestic laws. th 2. ASEAN Framework  To facilitate inter-state of goods between and - Signed on December 10 , 2009 Agreement on the among the Contracting Parties, to support the and ratified on November 30th, Facilitation of Inter- implementation of the ASEAN Free Trade Area 2011. State Transport and to further integrate the region’s economies; - Five countries, i.e., Thailand, Lao, (AFAFIST)  To simplify and harmonize transport, trade and Vietnam, Philippines and Cambodia, customs regulation and requirements for the already ratified this agreement. purpose of facilitation of interstate transport of goods; and  To work in concert towards establishing an effective, efficient, integrated and harmonized regional transport system that addresses all aspects of inter-state transport. There are 7 protocols in this agreement in similar to AFAFGIT consisting of protocol 1, 2, 3, 4, 5, 8 and 9. 3. ASEAN Framework To facilitate the interstate transport and transit in - The expert group of this agreement Agreement on the line with the guidelines of Brunei Action Plan are under process of drafting the Facilitation of Inter- (BAP) and Master Plan on ASEAN Connectivity initial agreement. In Thailand, State Transport of (MPAC). Department of Land Transport is Passenger responsible for the draft preparation. 4. Agreement on the To facilitate the movement of citizens of the ASEAN - Signed on July 9th, 1985 Recognition of countries by recognizing the domestic driving - Ratified on July 1st, 2007 and has Domestic Driving licenses issued by the respective countries. entered into force. Licenses Issued by ASEAN Countries

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Table 4.2-1 The progress of the agreement under the framework of ASEAN (Cont’d) Framework Agreement Objectives/Description Current Status of Thailand 5. Agreement on the To facilitate the cross-border movement of - Signed on September 10th, 1998 Recognition of commercial vehicles with regard to goods vehicles - Ratified on July 1st, 2007 and has Commercial Vehicle and public services vehicles, among Contracting entered into force. Inspection Certificates Parties by recognizing commercial vehicle for Goods Vehicles inspection certificates issued by the respective and Public Service Contracting Parties. Vehicles issued by ASEAN Member Countries 6. ASEAN Framework To facilitate the expansion of international trade - Signed on November 17th, 2005 Agreement on among ASEAN countries by developing the most - Ratified on July 11th, 2008 Multimodal Transport cost-saving and efficient multimodal transport - Thailand, Cambodia, Philippines (AFAMT) services. and Vietnam already ratified this agreement. Other countries are under process of improving the domestic laws. Source : Implementation Status of Brunei Action Plan (Scorecard), November 28th, 2012

As for the readiness of Thailand under AEC agreement, there are 2 issues which might cause problems to Thailand from the exchange of Traffic Right, Safety Standard of Freight, Requirements for the Admittance of Road Vehicles and Market Access and Licensing. The 2 issues are the standards of vehicles for transporting passengers and freight and the transportation of hazardous materials. (1) The standard of vehicle The fourth protocol, which is about technical requirements of vehicles, claims that the vehicle has to pass the standard under the fourth protocol in order to get exchange of Traffic Right in ASEAN country members. The technical standard can be divided into 3 groups, which are the standard on vehicle efficiency, the standard on vehicle dimension and the standard on maximum weight of vehicle as shown in Table 4.2-2 to Table 4.2-4..

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Table 4.2-2 Comparison of standards on vehicle efficiency Standard Checklist Technical requirements of Inspection Standard in Thailand ¹ ASEAN (Protocol 4) Truck Bus Exhaust Emission 50% (Opacity or Bosch unit) Not over 45% (Opacity unit) Not over 45% (Opacity unit) (smoke) or 50 HSU 50% of the axle weight Not less than 50% of the axle Not less than 50% of the axle Brake efficiency weight weight Side Slip +/- 5 meter/kilometer Not over +/- 5 meter/kilometer Not over +/- 5 meter/kilometer Remark : ¹ Inspection guidelines of vehicles under the Transport Law 2007, the Department of Land Transport

Table 4.2-3 Comparison of standard on vehicle dimension Technical requirements of ASEAN Checklist Standard trucks of Thailand ¹ (Protocol 4) length of the truck 12.2 meter Not over 12 meter width for all kinds of trucks 2.5 meter Not over 2.55 meter Height for all kinds of trucks 4.2 meter Not over 4.2 meter Rear overhang 60% of wheel base Not over 66% of wheel base for trucks with solid container Remark: Land Transport Act 1979 rectified according to the ministerial regulation no. 60

Table 4.2-4 Comparison of standard on maximum weight Weight (Tons) Type of Trucks Protocol 4 technical requirements of ASEAN Standard trucks of Thailand Rigid Motor Vehicle 3 axle 21 25 Rigid Motor Vehicle 4 axle 25 30 Articulated 4 axle 32 35 Articulated 5 axle 36 45 Articulated 6 axle 38 50.5

As for the 3 groups of the technical standard, the study found that Thai trucks have passed the standard on vehicle efficiency. However, some dimensions of Thai trucks: the width and rear overhang are longer than that specified in the fourth protocol. The maximum weight of trucks are also over the limitation in the fourth protocol. These issues may cause Thai trucks cannot get exchange of Traffic Right among ASEAN country members. The solution for this matter is to inform the logistics providers before using trucks to cross border.

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(2) Transport of the dangerous goods Thailand and Malaysia have not yet ratified the ninth protocol which is about transport of hazard material. However, the other 8 ASEAN country members have already ratify the protocol. This reflected that Thailand was lack readiness to control the transport of hazard material, which can divide into 3 factors: responsible agency, human resource and related laws.  Responsible agency : in the ninth protocol, topic 5 (5) claims that every country member has to form the responsible agency to authorize permission for transport hazard material crossing border. Thailand has not officially formed the responsible agency. But Department of Land Transport is currently in charge in this issue.  Human resource : after the end of the German assistance through GTZ in 2002, the development of hazard material transport under ADR guideline has been slow in its progress. The well trained staffs from GTZ moved to other jobs, which lead to discontinuous improvement and lacked of well-trained staffs.  Laws : In order to control the transport of hazard material cross border under ASEAN and GMS CBTA agreement, it abides by the UN ADR guideline and ADR reviewed version. Thailand has only Land Transport Act since 1979, which claim only 4 types of dangerous goods. This old school law is not accord with the UN ADR guideline and ADR reviewed version. Table 4.2-5 shows detailed of the development plan of dangerous goods transport system by road during 2010-2019. Table 4.2-5 Development plan of Dangerous Goods transport system by road during 2010-2019 Guideline for development of dangerous goods transport system by road Integration of agencies Capacity building of Modification of laws/ Integration with other within the Department officials in Department of regulations government agencies of Land Transport Land Transport - Classify the core body, - Train the officials about - Rectify or legislate the - Reduce the duplication supporting body and formulation of action plan regulations related to vehicles of agencies in the same other bodies clearly - Produce the operation - Rectify or legislate the duties - Establish the working manual for relevant officials regulations related to - Complete the transport group for formulating - Held the training and operation conditions system for dangerous the action plan in seminar for transport service - Rectify or legislate the goods accordance with ADR providers and drivers regulations related to drivers Source: Department of Land Transport

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As the improvement plan for control the dangerous goods transport, the aims are creating the readiness into 3 main factors related to transport of dangerous goods: vehicle, human and equipment. This plan accords with the UN ADR guideline and ADR reviewed version on transport of dangerous goods, which agreed with the ninth protocol of ASEAN and Appendix 1 of GMS CBTA agreement.

4.3 Possibility of Road Surcharges Collection from Foreign Vehicles Using vehicle causes social costs in many ways such as road damages, air pollution and accidents, etc. Therefore, road users should be responsible for those social impacts. Road surcharges collection is one of the effective tools to control vehicle usages. Due to its direct burden to the users, they will plan their routes and make the driving become the most efficient. The road surcharges should reflect social costs as well because the income from road surcharges can contribute back to the society without any budgets from the government. As under GMS CBTA agreement, the agreement has categorized road surcharges into 6 types. The only external costs taking account for road surcharges is the highway maintenance cost. On the other hands, ASEAN agreement has only stated that all costs should make it simple and combine as a single rate without any limitation. Therefore, the road surcharges can include three kinds of external costs under ASEAN agreement, i.e., road damages, air pollution and road accidents. This report calculates the cost from only two sources, which are highway maintenance costs and environmental impact costs. Because of uncertainty of accidental costs, the cost estimation will be inaccurate and depended on calculation methods. If the accidental costs are included in the road surcharge, it will become too high fee which is unpractical.

4.3.1 Road Maintenance Costs For estimation of road maintenance costs, the model from Austria is selected among many from models from EU because the model can reflect real world situation and also most practical to apply. According to Austrian model, the maintenance costs depend on traffic volume and vehicle type. Because high traffic volume leads to high road damage and high maintenance costs. A bigger vehicle will cause more damage to road than a smaller vehicle. In addition, the data needed for the model is the one that systematically collected by Department of Highways. The model can be represented with the following equation.

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where C = Average Maintenance Cost per kilometer-day (Baht) = Annual Average Daily Traffic of private car (in PCU) = Annual Average Daily Traffic of bus (in PCU) = Annual Average Daily Traffic of truck (in PCU)

EViews 5 software was used to estimate the parameters of the model and the results are shown below.

The equation shows that vehicle usage on AH1 will cause road damage costs about 0.7468, 1.3383, and 1.725 baht per kilometer for private car, bus, and truck, respectively. For example, road surcharges on AH1 route from Mae Sot to Ban Klong Luek with distance of 702 kilometer by vehicle types can be estimated as shown in Table 4.3-1.

Table 4.3-1 Road Surcharges on AH1 route from Mae Sot to Ban Klong Luek by Type of Vehicle Type Surcharge Rate (Baht/vehicle-km) Total Surcharge (Baht/vehicle)¹ 1. Private car 0.7468 524 2. Bus 1.3383 939 3. Truck 1.7250 1,211 Remark : ¹ Distance along the route is 702 kilometer Source: Consultant (2013)

4.3.2 Environmental Cost

Environmental cost from using vehicle is another social costs. It should be included in road surcharges. The details of environmental cost calculation, which includes global warming cost and air pollution Cost, has shown as below. (1) Global Warming Cost Green house gases (GHGs) leading to global warming problem consist of three types of

gases, which are CO2, CH4 and N2O. The calculation of global warming costs for each vehicle type will be estimated from transferring all of GHGs into CO2-Equivalent per unit, and then multiplied by emission cost (baht per gram) as shown in Table 4.3-2.

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Table 4.3-2 Global warming cost of each vehicle type Global warming cost (Baht/veh-km) Type Shadow price 1 2 Disposal costs of CO2 Market Value of CO2 1. Private car 0.1308 0.0577 2. Bus 0.1388 0.0613 3. Truck 0.1428 0.0631

Remark : ¹ Disposal cost for 1 ton of CO2 is 615 Baht ² The Market value for 1 ton of CO2 is 9.05 dollars or 271.5 Baht Source: Consultant (2013) (2) Air Pollution Cost The air pollution from exhaust gas can impact human health. These exhaust gases

consist of three gases, which are VOC, NOx and PM10. The calculation of air pollution cost of each vehicle type will be estimated from the emission of VOC, NOx and PM10 by 1 kilometer, and then multiplied by emission cost baht per gram as shown in Table 4.3-3. Table 4.3-3 Air pollution costs of each vehicle type Pollutant Costs (Baht/veh-km) Vehicle Type Fuel Type VOC NOx PM10 Total Benzene 0.0013 0.0013 0.0005 1.Private Car 0.0058¹ Diesel 0.0003 0.0013 0.0069 2.Bus Diesel 0.0047 0.1563 0.0434 0.2044 3.Truck Diesel 0.0047 0.1563 0.0434 0.2044 Remark : ¹The consumption of benzene and diesel is assumed at equal proportion. Source : The Costs and Benefits of Electric Vehicles, Frederik Carlsson and Olof Johansson –Stenman, Goteborg University, 2000 4.3.3 Guideline for Collection of Road surcharges from Foreign Vehicles The total road surcharges will be a sum of road maintenance costs and environmental impacted costs, which can be categorized as shown in the Table 4.3-4. Table 4.3-4 Estimation of Road Fee Collection Road Maintenance Cost Environmental Cost Total Cost Vehicle Type (baht/vehicle-km) (baht/ vehicle-km) (baht/ vehicle-km) 1.Private Car 0.7468 0.1366 0.8834 2.Bus 1.3383 0.3432 1.6815 3.Truck 1.725 0.3472 2.0722 Source: Consultant (2013)

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According to the result from this study, the surcharge can be collected under ASEAN framework agreement at 0.8834 baht/kilometer for private car, 1.6815 baht/kilometer for bus and 2.0722 baht/kilometer for truck. However, the environmental impact cost cannot be included under GMS CBTA agreement.  Types of vehicle to be charged In the first stage, truck is proposed for charging due to causing the most damage to pavement. However, the charge rate for private car and bus are proposed in case they will be considered in the future.  Proposed scheme for road surcharges collection The distance-based scheme is recommended for road surcharge collection in Thailand. This is since it is fair for the road users who pay for the surcharge according to the distance they travelled which can be tracked by GPS device. Under the proposed strategies in this study, the GPS device will be mandatorily installed on every transit trucks and buses.  Regulating authority Department of Highways (DOH) is recommended in charge of road surcharges collection since they are currently responsible for regular maintenance of national highways. Moreover, DOH has experienced in collecting toll at the international friendship bridges between Thailand and neighborhood countries.  Revising domestic law involving road surcharge collection. It is difficult to collect road surcharges from all vehicles from all neighboring countries because international agreements, including GMS and ASEAN agreements, state that vehicles from aboard must be treated under the same norms applied to domestic vehicles. Now, Thailand has no law concerning the collection of road surcharges from domestic vehicles. Therefore, it is recommended to revise the domestic law by including the purpose of road surcharge for maintaining roads and/or mitigating environmental impact. If the domestic law cannot be revised, the Ministry of Transport might have agreement with neighborhood country to allow mutual collection of road surcharges at the border passes.

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4.4 Possibility of Intermodal Facilities Establishment and their Functional Layout

As the beginning of AEC in 2015, the truck terminal and intermodal facilities will be more important role from the reasons below.  The truck terminals will be public convenience for convert foreigner truck to Thai truck  The truck terminals help to reduce accident rate on road.  The truck terminals help to manage the empty backhaul transport more efficiency  The truck terminals can develop to be intermodal transport facilities such as road to railway, which improving energy efficiency in the long term.

The truck terminal at border passes will be the single mode function whereas the intermodal facilities will be multi-mode such as between road and railway, etc. The proposed truck terminals and intermodal facilities will be located at the border area. Some of them have feasibility studies already whereas some of them lack of detailed study. Therefore, the Bureau of Freight Transport, Department of Land Transport should conduct the feasibility study and detailed design for the rest of them. The Table 4.4-1 summarizes the proposed truck terminals and intermodal facilities at border passes in the future. The functional layout of proposed truck terminals and intermodal facilities can be shown in Figures 4.4-1 and 4.4-2, respectively.

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Table 4.4-1 Recommendation of Truck Terminals and Intermodal Facilities Development at Border Area in the Future Border Pass 2015-2020 2020-2025 Recommended Location 1. Chiang Khong Intermodal Facilities Intermodal Facilities Adjacent to Chiang Khong pass and railway station (planned) 2. Nong Khai Intermodal Facilities Intermodal Facilities Natha railway station, Nong Khai 3. Nakhon Phanom Border Transport Center Intermodal Facilities Adjacent to Nakhon Phanom pass (inbound) and Nakhon Phanom railway station (planned) 4. Mukdahan Large Truck Terminal Intermodal Facilities Adjacent to Mukdahan pass and Mukdahan railway station (as planned) 5. Mae Sai Small Truck Terminal Small Truck Terminal Adjacent to Mae Sai pass (inbound) 6. Mae Sot Small Truck Terminal Small Truck Terminal Within construction area of Mae Sot industrial state or along bypass of Mae Sot 7. Aranyaprathet Large Truck Terminal Intermodal Facilities Opposite Aranyaprathet municipal school 8. Sadao - Large Truck Terminal Along highway number 4 (inbound) at less than 5 km far from new Sadao customs house 9. Padang Besar - Small Truck Terminal Padang Besar customs house

Source: The Feasibility Study of Truck Terminal in the Major and Border Cities of Thailand, Department of Land Transport (2008) Figure 4.4-1 Functional Layout of Truck Terminal

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Source: The Study of the Detailed Design and Operation and Management of Intermodal Facilities at Chiang Saen – Chiang Khong, Chiang Rai Province (2010) Figure 4.4-2 Functional Layout of Intermodal Facilities

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4.5 Possibility of Rest Area Establishment

Thailand has not established rest area along main highways. There are no laws against rest schedule of driver. In fact, driver should take a break for at least 30 minutes in every 4 driving hours in order to reduce risk of accident from fatigueless. In this study, two types of rest area are specified. (1) Parking Area: PA Located in every 30-50 kilometers along ASEAN highway, the parking area consists of parking lot, petrol station and automatic vending machine. This type of rest area is not compulsory to stop, but to facilitate for the drivers. It requires minimal area between 1,000-3,000 square meters. The staff from the government to administrate the parking area is not necessary. Only staff for maintaining the toilets safe and ready to use is needed. (2) Service Area: SA Located in every 250 kilometers along ASEAN highway, the service area is the compulsory stops for every driver in order to monitor the travel profiles and record them in the logbook. In the first phase, the transit trucks will be examined. All foreigner vehicles will be monitored in later time. This type of rest area requires more space between 12,000-20,000 square meters (8-12 rais).

The service area consists of two parts as shown below: The first part is the regulation zone managed by the government including one stop service center, travel record check point, vehicle maintenance inspection, driver’s health check point, etc. The second part is the commercial zone managed by the private sector including passenger car parking lots, truck parking lots, restaurant, supermarket, toilet, petrol station, leisure area, etc.

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Both Department of Highways (DOH) and Department of Land Transport (DLT) are the proper agencies for management of rest area. DOH can be responsible for design and construction. DLT can be in charge of regulation and selection of private firm to concessionaire the commercial zone. The location of the rest area can be specified under the study conducted by the Office of Transport and Traffic Policy and Planning (OTP). As a result, 41 locations for rest area are selected dividing into 28 parking areas (PA) and 13 service areas (SA). Figure 4.5-1 shows the location of rest area which the parking area is represented by “S” sign whereas the service area is represented by “L” sign. In addition, those location are classified into three phases, i.e., short term, medium term and long term phases represented by red, yellow and green color, respectively. In the long term, some of rest areas may be upgraded to be Intra-ASEAN interchange center. The area development with logistics facilitation is in need. Logistics park and special economic zone are the examples of value creation for the rest area. However, such developments must be studied in details in order to identify appropriate locations and details of the development.

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Source: Detailed Design Study of Truck Rest Area along the Major Transport Network (2014), OTP

Figure 4.5-1 Recommended Location for Truck Rest Area in Thailand during short term, medium term and long term phase

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4.6 Analysis of Private Sector Capacity in Providing Transport and Logistics Services

As the analysis of the competitiveness in term of transport and logistics, the study found that there are main problems of Thailand logistics providers as follow; 1. Thailand logistics providers are lack of funds to develop human resource and technology, in order to enhance the competitiveness. Moreover, there are demands from entrepreneurs to set up a fund to promote Thailand logistics provider in every modes. 2. Thailand logistics providers do not have multimodal transport network and there are demands from entrepreneurs to introduce law for promote the establishment of network and the integration of entrepreneurs. 3. Thailand SMEs still lack of competitiveness in many ways such as funds, technology and service standard, in order to expand the business. The suggestion is terminated BOI of foreigner logistics providers, as well as provided tax benefit to Thai entrepreneurs. Furthermore, there are demands from entrepreneurs to introduce law for promote the development of service standards to meet international standard. 4. The competition among Thai entrepreneurs, some of they are cutting price in order to survive in the market. In addition, they cannot compete with foreigner logistics providers due to lack of competiveness. Moreover, there are no rules and regulations designed to control the number of trucks lead to oversupply.

From the analysis of impacts after the success of AEC integration, the consultant has collected data from many sources such as logistics associations of all transport modes, Thailand logistics federation, logistics SMEs and brainstorming ideas thru seminars. As a result, the consultant suggest government policy and also the adaptation of Thailand logistics providers as follow; 1) Establishing the main agency in order to develop and support Thailand logistics service providers. This agency will also responsible for creating a road map for long term planning as well as operation plan and guideline to promote Thailand logistics service providers. 2) Introducing the laws that promote entrepreneurs in Thailand such as pushing act of Thai logistics service providers and act of international transport agreement, including amend the existing laws to create better and practical operation of logistics service providers and enforce the law equally.

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3) Terminating special BOI tariff for logistics business, distribution center and silo owned by foreigners. Because such benefit from BOI can promote major international companies have competitive advantages in providing logistics service to Thai SMEs. Or introducing the government should establish preventive measures to protect Thai logistics SMEs. 4) Thai government should create standard of logistics service, particularly land and rail transport, and also introduce standard price for transporting goods through gateways of each country once FTA applied, issue of left-right driving, issue of usage of related equipments, issue of drivers permission to drive in every country within ASEAN, and issue of vehicle standard as well as insurance that should be applied in all ASEAN country members once registered. 5) Thai government must create a well-established energy development plan. Therefore, entrepreneurs can plan for short and long term operation effectively. 6) Thailand logistics entrepreneurs demand government to promote matching or a joint venture between Thailand logistics service providers and that of neighbored countries in order to increase the competitiveness. 7) Establishing centre for consultation of logistics service and for promoting related aspects as follow.  Long term financial and funding with low interest.  Supporting knowledge and advice for logistics business and service, especially SMEs in term of investment, business planning, laws and tax; including developing innovation and related technology relating to logistics service.  Developing competitiveness and create network of logistics service provider, including establishing database for logistics entrepreneurs used in their decision making. For example, data of product categories and transport route, demand of various transport routes, cost structure of business operation, regulations and procedure of logistics service in neighbored countries.

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5. Transport Infrastructure and Management Ready Plan for ASEAN Economic Community

5.1 Transport Strategies for the AEC

Based on the analysis of Thailand’s transport issues and their trends when it becomes part of the ASEAN Economic Community (the AEC) in 2015, as well as a SWOT analysis and TOWS Strategic Alternatives Matrix, the vision, missions and objectives of the development of transport infrastructure to prepare the country for the AEC have been formulated, as follows:

Vision To allow Thailand to serve as the ASEAN’s transport hub that links trade and services that are convenient, safe, reliable, and environmentally-friendly. Mission To develop systems, mechanisms and personnel for logistics and traffic systems; and to formulate policies towards the development, regulation and integration of logistics and traffic systems of the country in order to achieve thorough, adequate and efficient logistics and traffic systems with international-standard efficiency for linking the ASEAN to the global community; and to support green logistics. Objectives 1. To optimize the connectivity among the production bases, major economic cities and gateways within the country and link them to the ASEAN and global markets in order to support the status of a single market and production base. 2. To improve the availability of transport systems to meet the demand for freight and passenger transport. 3. To develop transport systems to achieve efficiency, convenience, time saving, safety, reliability, and environmentally-friendliness.

Based upon the vision, missions and objectives, the strategies for the preparation for transport infrastructure, systems and management for the AEC can be divided into four groups, which can be outlined as follows: 1) Enhancement of gateway capacity 2) Development of transport infrastructure and facilities 3) Regulation and management of cross-border transport 4) Facilitation of cross-border transport for logistics service providers The concept of these strategies is illustrated in Figures 5.1-1 and 5.1-2 below.

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Vision: To allow Thailand to serve as the ASEAN’s transport hub that links trade and services that are convenient, safe, reliable, and environmentally-friendly.

Mission: To develop systems, mechanisms and personnel for logistics and traffic systems; and to formulate policies towards the development, regulation and integration of logistics and traffic systems of the country in order to achieve thorough, adequate and efficient logistics and traffic systems with international-standard efficiency for linking the ASEAN to the global community; and to support green logistics.

1. To optimize the connectivity among the production 2. To improve the availability of transport 3. To develop transport systems to achieve bases, major economic cities and gateways within systems to meet the demand for freight efficiency, convenience, time saving, safety, the country and link them to the ASEAN and global and passenger transport reliability, and environmentally-friendliness markets in order to support the status of a single market and production base.

Strategy 1: Strategy 2: Strategy 3: Strategy 4: Enhancement of gateway capacity Development of transport Regulation and management of Facilitation of cross border infrastructure and facilities cross border transport transport for logistics service providers

Figure 5.1-1 Transport Strategies for the AEC

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Strategy 1: Strategy 2: Strategy 3: Strategy 4: Enhancement of gateway capacity Development of transport Regulation and management of Facilitation of cross-border infrastructure and facilities cross-border transport transport for logistics service providers • Tactic 1.1: Enhancement of the • Tactic 2.1: Enhancement of the • Tactic 3.1: Regulation of cross- • Tactic 4.1: Facilitation of capacity of land border pass to capacity of the highway network border transport to control operating logistics services in ensure international standards and land transport facilities vehicles passing through Thailand ASEAN member countries • Tactic 1.2: Enhancement of the • Tactic 2.2: Enhancement of the • Tactic 3.2: Management of • Tactic 4.2: Promotion and capacity of international ports capacity of the railway network transport to facilitate cross-border development of logistics • Tactic 1.3: Enhancement of the linking to gateways and transport providers in Thailand capacity of international airports production bases • Tactic 4.3: Facilitation of • Tactic 2.3: Enhancement of the insurance for international capacity of the river and coastal transport network • Tactic 4.4: Training for logistics personnel for the AEC • Tactic 4.5: Development of the ASEAN transport data center for logistics providers in Thailand Figure 5.1-2 Transport Strategies and Tactics

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Strategy 1: Enhancement of gateway capacity Tactic 1.1: Enhancement of the capacity of land border pass to ensure international standards  Plan 1.1.1: Reservation of areas and planning for the development of other facilities in the future  Project (1) Reservation of areas and planning for facility development at Nakhon Phanom border pass  Project (2) Reservation of areas and planning for facility development at Mukdahan border pass  Project (3) Reservation of areas and planning for facility development at Chiang Khong border pass  Plan 1.1.2: Improvement of existing border pass and construction of new border pass for separation of people and freight inspection  Project (1) Construction of more truck parking areas and the Second Aranyaprathet border pass at Ban Nong Ian - Strung Bot for freight inspection  Project (2) Promotion of the utilization of the new Mae Sai border pass for freight inspection  Project (3) Construction of new Mae Sot border pass for freight inspection  Project (4) Construction of more truck parking areas for Padang Besar border pass  Project (5) Improvement and widening of Nong Khai border pass  Plan 1.1.3: Construction of new border pass to replace existing one that cannot be expanded  Project (1) Construction of new Sadao border pass Tactic 1.2: Enhancement of the capacity and efficiency of existing international ports  Plan 1.2.1: Enhancement of the capacity of Laem Chabang Port  Project (1) Development of Laem Chabang Port Phase III  Project (2) Development of single rail transfer operator (SRTO)  Plan 1.2.2: Enhancement of the efficiency of Bangkok Port  Project (1) Development of vertical warehouses  Plan 1.2.3: Enhancement of Map Ta Phut Port to accommodate liquid cargo, bulk goods, petrochemical products, and consumer products  Project (1) Expansion of Map Ta Phut Port area to increase the port capacity  Plan 1.2.4: Promote the utilization of the Second Chiang Saen Port  Project (1) Development of facilities at the Second Chiang Saen Port  Plan 1.2.5: Development of the Second Songkhla Deep Sea Port to support international freight transport on the Gulf of Thailand  Project (1) Construction of the Second Songkhla Port Phase I  Plan 1.2.6: Development of Pakbara Deep Sea Port to support transport on the Andaman Sea  Project (1) Development of Pakbara Port Phase I  Project (2) Construction of a railway connecting to Pakbara Port

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Strategy 1: Enhancement of gateway capacity (Cont’d) Tactic 1.3: Enhancement of the capacity of existing international airports  Plan 1.3.1: Enhancement of the capacity of Suvarnabhumi Airport  Project (1) Development of Suvarnabhumi Airport Phase II  Project (2) Construction of the third runway of Suvarnabhumi Airport and compensation for noise impact (in addition to the second phase plan)  Project (3) Construction of a new domestic terminal in the north, monorail system and car park building (in addition to the second phase plan)  Plan 1.3.2: Enhancement of the capacity of Phuket Airport  Project (1) Improvement of passenger terminals at Phuket Airport  Project (2) Management of transport to reduce the runway congestion at Phuket Airport  Project (3) Construction of more parking bays within Phuket Airport  Plan 1.3.3: Enhancement of the capacity of Don Muang Airport  Project (1) Development of the second phase at Don Muang Airport  Project (2) Improvement of passenger terminal at Don Muang Airport (the third phase of Don Muang Airport)  Project (3) Expansion of the passenger terminal, office building and non-aero service area in Don Muang Airport to serve the Red Line mass transit  Plan 1.3.4: Enhancement of the capacity of Chiang Mai Airport  Project (1) Construction of aircraft bays for general aviation at Chiang Mai Airport  Project (2) Increase the runway length of Chiang Mai Airport  Project (3) Expansion of the terminal area of Chiang Mai Airport  Project (4) Construction of more parking bays within Chiang Mai Airport  Plan 1.3.5: Enhancement of the capacity of Hat Yai Airport  Project (1) Expansion of the terminal area of Hat Yai Airport  Project (2) Construction of more parking bays within Hat Yai Airport  Plan 1.3.6: Development of Udon Thani Airport to be the hub of the intra-ASEAN air route  Project (1) Enhancement of landside facilities at Udon Thani Airport to handle number of passengers during peak period at 1,776 passengers per hour within 2023  Project (2) Enhancement of airside facilities at Udon Thani Airport to handle number of aircraft movement during peak period at 15 aircrafts per hour within 2023  Plan 1.3.7: Development of Krabi Airport as the combined airport with Phuket Airport  Project (1) Enhancement of landside facilities at Krabi Airport to handle number of passengers during peak period at 2,200 passengers per hour within 2018  Project (2) Enhancement of airside facilities at Krabi Airport to handle number of aircraft movement during peak period at 12 aircrafts per hour within 2018 and at 15 aircrafts per hour within 2023

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Strategy 2: Development of transport infrastructure and facilities Tactic 2.1: Enhancement of the capacity of the highway network and land transport facilities  Plan 2.1.1: Widening of the main highways to accommodate the AEC  Project (1) Widening of all ASEAN highways into four lanes  Project (2) Widening of main highways linking to inner areas  Plan 2.1.2: Development of motorways  Project (1) Development of motorways from Bangkok and its vicinity to other regions  Project (2) Development of motorways, from major cities in border areas to major border pass  Plan 2.1.3: Construction of New Highway  Project (1) Construction of new highway Aranyaprathet-Thailand-Cambodia border (Nong Ian-Stungbot)  Plan 2.1.4: Development of the safe road system  Project (1) Improvement of road hazardous locations on the existing main road network  Project (2) Inspection of safety of the existing main road network  Plan 2.1.5: Development of roadside rest areas to promote road safety  Project (1) Development of 28 truck parking areas  Project (2) Development of 13 truck service areas  Plan 2.1.6: Development of truck terminals and intermodal facilities at the border pass to accommodate international freight transport  Project (1) Development of the intermodal facilities at Chiang Khong, Chiang Rai province  Project (2) Development of truck terminal at Nong Khai province  Project (3) Development of border transport center at Nakhon Phanom province  Project (4) Development of truck terminal at Mukdahan province  Project (5) Development of truck terminal at Chiang Rai province  Project (6) Development of truck terminal at Tak province  Project (7) Development of truck terminal at Sa Kaeo province  Project (8) Development of truck terminal at Songkhla province Tactic 2.2: Enhancement of the capacity of the railway network linking to gateways and production bases  Plan 2.2.1: Development of double-track railways  Project (1) Construction of double-track railways, short term (2015-2020)  Project (2) Construction of double-track railways, medium term (2020-2025)  Plan 2.2.2: Development of double-track railways with standard gauge  Project (1) Development of Bangkok-Nong Khai double-track railway with standard gauge in the medium-term phase (2021-2025)  Project (2) Development of three double-track railways with standard gauge in the long-term phase (2026-2035), i.e., Bangkok-Chiang Mai; Suvarnabhumi Airport Rail Link-Chon Buri-Pattaya- Rayong; and Bangkok-Padang Besar  Plan 2.2.3: Development of dry ports to support development of networks along the areas  Project (1) Conduct the development plan of dry port to enhance the connectivity of domestic and regional network of the logistics system

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Strategy 2: Development of transport infrastructure and facilities (Cont’d) Tactic 2.3: Enhancement of the capacity of the river and coastal network  Plan 2.3.1: Development of the embankment to enhance inland waterway freight transport  Project (1) Construction and supervision of the embankment in Pasak River  Plan 2.3.2: Development of new coastal ports to support coastal feeder transport  Project (1) Development of Port A of Laem Chabang Port to serve as a public coastal port

Strategy 3: Regulation and management of cross-border transport Tactic 3.1: Regulation of cross-border transport to control vehicles passing through Thailand  Plan 3.1.1: Regulation of border-crossing vehicles to ensure security  Project (1) Installation of travel counters for border-crossing vehicles to optimize the transport system  Plan 3.1.2: Regulation of border-crossing vehicles to ensure safety  Project (1) Establishment of a safety administrative center in each region  Plan 3.1.3: Regulation of border-crossing vehicles to ensure equity  Project (1) Collection of road surcharges Tactic 3.2: Management of transport to facilitate cross-border transport  Plan 3.2.1: Management of agencies of the border pass to ensure their efficiency  Project (1) Establishment of the Border Administration Authority  Plan 3.2.2: Extension of service hours for some border pass  Project (1) Operating of 24-hour services a day for Sadao border pass  Plan 3.2.3: Collection of terminal charges at the border pass  Project (1) Collection of terminal charges  Plan 3.2.4: Development of traffic signs for the AEC  Project (1) Development of trilingual traffic signs  Plan 3.2.5: Negotiation over new routes for international transport  Project (1) Development of AH 15 and R12 as international transport routes  Project (2) Development of R8 as an international transport route

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Strategy 4: Facilitation of cross-border transport for logistics providers Tactic 4.1: Facilitation of operating logistics services in ASEAN member countries  Plan 4.1.1: Government agencies facilitate business negotiation  Project (1) Government agencies lead negotiations over business matching with ASEAN member countries  Plan 4.1.2: Support for research on logistics business in the ASEAN  Project (1) Provision of financial support for research on logistics business in the ASEAN to create business opportunities for Thai logistics providers Tactic 4.2: Promotion and development of Thailand’s local logistics providers  Plan 4.2.1: Encourage of the private sector to enter into joint ventures with the government business  Project (1) Encouragement of Thai logistics providers to enter joint ventures in truck terminals and intermodal facilities at border areas  Plan 4.2.2: Amendment of regulations to support logistics business of Thailand  Project (1) Pushing of the Logistics Business Promotion and Development Act  Project (2) Customs facilitation for cross-border transport of logistics providers Tactic 4.3: Facilitation of insurance for international transport  Plan 4.3.1: Development of IT systems to facilitate insurance  Project (1) Development of IT systems that link data within ASEAN member countries to facilitate advance policy purchase in their own countries  Plan 4.3.2: Establishment of high-standard insurance companies in ASEAN member countries  Project (1) Encouragement of Thailand’s major insurance companies to enter into joint ventures in insurance business in the ASEAN  Plan 4.3.3: Facilitation of coordination of insurance systems  Project (1) Establishment of the Insurance Call Center Tactic 4.4: Training for logistics personnel for the AEC  Plan 4.4.1: Encouragement of academic institutions and the private sector to produce logistics personnel  Project (1) Training for logistics personnel to meet the market needs  Plan 4.4.2: Increase in the number of professional truck drivers  Project (1): Training of professional truck drivers Tactic 4.5: Development of the ASEAN transport data center for logistics providers in Thailand  Plan 4.5.1: Development of databases to support logistics providers  Project (1) Development of databases on transport of ASEAN member countries  Plan 4.5.2: Development of a handbook on the preparation for operating transport and logistics business  Project (1) Preparation of a handbook on the preparation for operating transport and logistics business in the ASEAN

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5.2 Transport Infrastructure and Management Ready Plan for ASEAN Economic Community

The transport strategies comprise of plans and projects that are important and consistent with the vision, mission and objectives. To implement these plans and projects, Thailand needs to have clear and efficient implementation plans consisting of the rationale, implementation periods, budgets, and Responsible Agencies, which will be described below.  Rationale – This shows the principle and objective of the plans/projects and response to existing issues or potential issues after the AEC is launched.  Period – This show the implementation time frame for plans/projects according to their priority and consistency with development plans of concerned agencies. In some cases, some plans/projects need to be implemented first so that others can be implemented efficiently. The implementation periods can be divided into: o Short-term (2014-2020) Short-term plans/projects are those with a top priority, or those that can be implemented immediately, or those with a completed feasibility study and detailed design, or those with short implementation periods. Delaying or omitting them will impact the preparation of infrastructure, transport systems, and management of Thailand. This is because transport-related problems are happening and tend to be more severe. o Medium-term (2020-2025) Medium-term plans/projects are those that need longer implementation periods or those expected to yield outcomes 3-5 years after the implementation. Their implementation is expected to alleviate potential problems. Medium-term plans/projects are continuous from short-term plans/projects. o Long-term (2025-2035) Long-term plans/projects are essential for sustainable transport development, which aim to ensure comprehensive, sufficient, and efficient transport networks and facilities. Integrating planning and transport in a dynamic manner, long-term plans/projects prepare Thailand for transport and the status as the transport hub for the ASEAN in the long term.

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 Budget – This will represent the investment for project preparation and implementation. Each shown budget is estimated either from the existing responsible agencies or from the previous projects with similar size and pattern. In some cases, they are set as preliminary budget that does not exceed 50 million baht for conducting the feasibility studies and other additional details.  Responsible Agencies – This will represent the host agencies for planning and monitoring the plans/projects. Assigning a single or many agencies in each project depends on the seriousness of problems and project features. If many agencies are involved, the first one is the main agency and the others are supporting agencies.

The transport infrastructure and management ready plan for AEC is summarized in Table 5.2-1. As for the Plan for the development of gateways, transport infrastructure, and transport facilities, it is illustrated from Figures 5.2-1 to 5.2-4, by northern, central (including eastern and western), northeast and southern regions. In summary, the total budget under this plan is 2,446,430.29 million baht which can be categorized into four strategies as follows: 1) Under Strategy 1: 334,665.09 million baht 2) Under Strategy 2: 2,140,630.20 million baht 3) Under Strategy 3: 680.00 million baht 4) Under Strategy 4: 455.00 million baht In another side, this budget can be expressed in terms of implementation period as follows:  Short-term plan 840,132.34 million baht It can be separated as the hardware infrastructure at 838,997.34 million baht and as the software infrastructure at 1,135.00 million baht  Medium-term plan 514,198.45 million baht  Long-term plan 1,092,099.50 million baht

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Table 5.2-1 Transport Infrastructure and Management Ready Plan for AEC, 2014-2035 Plans/projects Period Responsible Budget Rationale Agencies (million baht) Strategy 1: Enhancement of gateway capacity Tactic 1.1: Enhancement of the capacity of land border pass to ensure international standards.  Plan 1.1.1: Reservation of areas and planning This concept deals with planning the development of well-designed for the development of other border pass, while reserving areas for border pass that tend to have facilities in the future congestion in the future, and planning the development of other facilities to accommodate development in the future.  Project (1) Reservation of areas and planning Medium-term DOH/TCD 25.00 Currently, Nakhon Phanom border pass is not experiencing congestion for facility development at Nakhon because it was opened in 2011. In the future, this border pass will Phanom border pass become a major gateway, which links to Hanoi in Vietnam and Nanning in southern China via R12.  Project (2) Reservation of areas and planning Medium-term DOH/TCD 25.00 Currently, Mukdahan border pass is sufficiently spacious for travel and for facility development at Mukdahan transport but lacks parking areas for trucks or rest areas. In the future, border pass this border pass will become a major gateway, which links to Vietnam via R9.  Project (3) Reservation of areas and planning Medium-term DOH/TCD 25.00 The Chiang Khong border pass was opened in 2013, and it is sufficiently for facility development at Chiang large for travel and transport. In the future, this border pass will Khong border pass become a major gateway, which links to Kunming in southern China via R3A.

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Table 5.2-1 Transport Infrastructure and Management Ready Plan for AEC, 2014-2035 (Cont’d) Plans/projects Period Responsibl Budget Rationale e Agencies (million baht)  Plan 1.1.2: Improvement of existing border pass and construction of new border pass for separation of people and freight inspection  Project (1) Construction of more truck Short-term DOH/TCD 1,065.00 Aranyaprathet Custom’s border pass and Aranyaprathet border pass (Ban parking areas and the Second Khlong Luek Permanent Border Crossing Point) have no parking space, which Aranyaprathet border pass at results in traffic jam at Aranyaprathet border pass. Therefore, a new border pass Ban Nong Ian-Strung Bot for should be constructed, i.e., at Ban Nong Ian border pass. Ban Nong Ian border freight inspection pass will be functioned for trucks and Aranyaprathet border pass (Ban Khlong Luek Permanent Border Crossing Point) is for passengers and personal cars.  Project (2) Promotion of the utilization of Short-term TCD - Freight transit transport through Mae Sai border pass, Chiang Rai province is the new Mae Sai border pass inconvenient, so passenger and freight inspection should be separated. Trucks for freight inspection must pass the customs procedure at Mae Sai border pass 2; the passengers and personal cars must pass the immigration procedure at the existing Mae Sai border pass.  Project (3) Construction of a new Mae Medium-term DOH/TCD 1,500.00 The friendship bridge at Mae Sot border pass has a limited freight loading capacity, Sot border pass for freight and its operating area is very narrow but cannot be widened. As a result, freight inspection transport is inconvenient, and a lot of goods have to rely on river transport. It has been recommended to develop the Second Mae Sot border pass and the Second Bridge Crossing the Moei River (for a better freight loading capacity) and shift to the second Mae Sot border pass for freight transit transport.

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Table 5.2-1 Transport Infrastructure and Management Ready Plan for AEC, 2014-2035 (Cont’d) Plans/projects Period Responsible Budget Rationale Agencies (million baht)  Project (4) Construction of more truck Short-term TCD/SRT 10.00 Currently, Padang Besar border pass has insufficient truck parking areas, so parking areas for Padang Besar some trucks park on the roadside. If this problem is not resolved, it has been border pass forecasted that the truck density in front of the border pass, compared with parking areas, will be 93 and 123 percent of the capacity in 2015 and 2020 respectively. Accordingly, more parking areas should be built.  Project (5) Improvement and widening of Short-term TCD/DOH 383.00 The Nong Khai border pass has limited truck parking areas (currently, the density Nong Khai border pass of the truck parking areas represents 78 of its capacity in 2012 and is expected to be 115 percent in 2015 and 169 percent in 2020). A forecast has shown that the traffic volume during peak hours at the border pass will account for 62 and 85 percent in 2015 and 2020 respectively.  Plan 1.1.3 Construction of new border pass to replace existing ones that cannot be expanded  Project (1) Construction of a new Sadao Short-term TCD 1,937.00 The Sadao border pass, Songkhla province, is the border pass with the highest border pass number of trucks in Thailand. Today, it is experiencing congestion and cannot be widened. In addition, it has limited truck parking areas (in 2012, the density of the truck parking areas at this border pass exceeded its capacity – almost 124 percent, and the density is expected to be 156 and 203 percent in 2015 and 2020 respectively). Some trucks have to park on the roadside. It has been forecasted that traffic volume at Sadao border pass will exceed its capacity during peak hours – 114 and 154 percent in 2015 and 2020 respectively. It has been recommended to develop a new Sadao Customs border pass in the eastern part, which is located 600 m away from the existing Sadao border pass (outside). Based on the study of TCD, it covers 723 rai.

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Table 5.2-1 Transport Infrastructure and Management Ready Plan for AEC, 2014-2035 (Cont’d) Plans/projects Period Responsible Budget Rationale Agencies (million baht) Tactic 1.2: Enhancement of the capacity and efficiency of existing international ports  Plan 1.2.1: Enhancement of the capacity of Laem Chabang Port  Project (1) Development of Laem Medium-term PAT Investment A forecast has shown that the number of containers passing through Laem Chabang Port Phase III by the Chabang Port will represent 63 and 80 percent of the port capacity in 2015 government and 2020 respectively. For this reason, development of Laem Chabang Port, sector is phase III, to accommodate 18.8 million containers per year, needs to 34,982.00 continue. It is expected that within 2017-2020, this port has to accommodate million baht; 10.5 million containers, which exceed the port capacity. and by the private sector, 53,174.00 million baht.  Project (2) Development of single rail Short-term PAT 2,944.43 The construction of a rail cargo terminal at Laem Chabang is intended to transfer operator (SRTO) SRT support cargo transport by rail. This can optimize management of rail transport within the port, which will promote the policy towards shifting from road transport to rail transport. The rail system will be designed to have six tracks between the berth, Phase I and Phase II. It will stop while waiting for goods handling to the ship. It can accommodate up to 2 million containers per year.

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Table 5.2-1 Transport Infrastructure and Management Ready Plan for AEC, 2014-2035 (Cont’d) Plans/projects Period Responsible Budget Rationale Agencies (million baht)  Plan 1.2.2: Enhancement of the efficiency of Bangkok Port  Project (1) Development of vertical Short-term PAT 2,723.40 Due to Bangkok Port’s area limitations, vertical warehouses should be warehouses developed in the way that trucks can keep and load goods on high buildings to increase warehouse areas. The vertical warehouses must be designed to ensure safety.  Plan 1.2.3: Enhancement of Map Ta Phut Port to accommodate liquid cargo, bulk goods, petrochemical products, and consumer products  Project 1: Expansion of Map Ta Phut Short-term IEAT 6,000.00 The Map Ta Phut Port is an international port that services local operators. Port area to increase the port With 12 ports, it has a capacity to transport raw materials and liquid cargo. In capacity 2012, the density of Map Ta Phut Port was 81 percent of its capacity. A forecast has shown that the density will represent 110 and 162 percent of the capacity in 2015 and 2020 respectively. For this reason, Map Ta Phut Port area should be expanded to increase the freight loading capacity and diversify transport freight transport services.

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Table 5.2-1 Transport Infrastructure and Management Ready Plan for AEC, 2014-2035 (Cont’d) Plans/projects Period Responsible Budget Rationale Agencies (million baht)  Plan 1.2.4: Promotion of the utilization of the Second Chiang Saen Port  Project (1) Development of facilities at Short-term PAT 4.78 Freight transit from southern China to Thailand partly relies in the Mekong the Second Chiang Saen Port River. The Second Chiang Saen Port, Chiang rai province, was opened in April 2012. Its capacity to support freight transported in the Mekong River is approximately six million tons per year; however, the port is currently served by less than 300,000 tons of freight per year. It can receive more freight as a result of the AEC. Optimization of the transit transport routes into the port and control of water levels in the Mekong River to achieve all-year-round shipping will be a significant factor in the increased freight volume through Chiang Saen Port in the future. In addition, other facilities without a lot of investment should be developed, such as the lighting system in the north of the port, additional electric plugs for containers in chill rooms for fresh vegetables, fresh fruits, chilled meat, etc.

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Table 5.2-1 Transport Infrastructure and Management Ready Plan for AEC, 2014-2035 (Cont’d) Plans/projects Period Responsible Budget Rationale Agencies (million baht)  Plan 1.2.5: Development of the Second Songkhla Deep Sea Port to support international freight transport on the Gulf of Thailand  Project (1) Construction of the Second Short-term MD 13,940.00 The Second Songkhla Port is needed to support the AEC. Currently, the Songkhla Port Phase I existing Songkhla Port is in the list of the ASEAN’s 47 main ports, and it is facing of the problem of congestion but cannot be expanded for better capacity. Accordingly, the Second Songkhla Port will be a modern container port on the side of Gulf of Thailand, which will relieve the burden of the First Songkhla Port. In addition, the Second Songkhla Port can be an alternative in the event that Laem Chabang Port is not in service. Development of the Second Songkhla Port can support sea freight transport with the Philippines and Indonesia because this port is located nearer these two countries than Laem Chabang Port.

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Table 5.2-1 Transport Infrastructure and Management Ready Plan for AEC, 2014-2035 (Cont’d) Plans/projects Period Responsible Budget Rationale Agencies (million baht)  Plan 1.2.6: Development of Pakbara Pakbara Port, Satun province, is the strategic port on the Andaman side. Deep Sea Port to support Ports on the Andaman Sea side have not been developed seriously. Each transport on the Andaman year, Thai transport operators ship cargo approximately 1 million containers Sea through Sadao border pass to the Penang Port. That is, they have to rely on ports in Malaysia. The development of Pakbara Port will provide them a new channel for exporting and importing and reduce the dependence on ports in Malaysia. This will support transport business of Thai operators and reduce freight costs.  Project (1) Development of Pakbara Port Short-term MD 17,744.26 The phase I of Pakbara Port consists of a 750-m long cargo berth. Each time, Phase I it can accommodate two 180-m long and 11.0-m deep vessels (about 30,000 DWT) and a 280-m long vessel (about 70,000 DWT); or two 70,000 DWT vessels. Also, it can accommodate containers of 825,000 TEUs.  Project (2) Construction of a railway Medium-term SRT 10,000.00 The construction of the railway Trang - Pakbara to connect to the port connecting to Pakbara Port directly will help stimulate multimodal freight transport that is efficient, reliable and economical and reduces environmental impacts, because it generates much less pollution than trucks.

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Table 5.2-1 Transport Infrastructure and Management Ready Plan for AEC, 2014-2035 (Cont’d) Plans/projects Period Responsible Budget Rationale Agencies (million baht) Tactic 1.3: Enhancement of the capacity of existing international airports  Plan 1.3.1: Enhancement of the capacity of Suvarnabhumi Airport  Project (1) Development of Suvarnabhumi Short-term AOT 62,503.21 The runway density at Suvarnabhumi Airport during peak hours will Airport Phase II represent approximately 92 and 105 percent in 2015 and 2020 respectively. The density of bays during peak hours will account for 81 and 103 percent of the capacity in 2015 and 2020 respectively. The Suvarnabhumi Airport Development Project consists of three work groups: 1) First secondary concourse, 2) Terminal, and 3) Design and construction of infrastructure and project management consultant (PMC).  Project (2) Construction of the third Short-term AOT 19,000.00 To cope with the traffic congestion of the runways, it is necessary to runway of Suvarnabhumi Airport build the third runway as soon as possible to allow Suvarnabhumi and compensation for noise Airport to accommodate increasing air traffic demand in the future. If impact (in addition to the the construction has to be delayed as a result of environmental issues, second phase plan) a 2,900-m long secondary runway for small aircrafts (A330 and A320) may be an option in the case of emergency on the main runways or temporary closing for maintenance.

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Table 5.2-1 Transport Infrastructure and Management Ready Plan for AEC, 2014-2035 (Cont’d) Plans/projects Period Responsible Budget Rationale Agencies (million baht)  Project (3) Construction of a new domestic Short-term AOT 29,000.00 Suvarnabhumi Airport Development Plan, Phase II, which prepares the terminal in the north, monorail construction area for the new eastern terminal, requires at least 5-7 years system and car park building (in before the service. Therefore, it has been proposed to construct a new addition to the second phase domestic terminal for passengers to change their tickets. The construction plan) can be completed within a couple years. In addition, the development of either monorail connecting between passenger terminals or car park building is recommended to increase airport efficiency.  Plan 1.3.2: Enhancement of the capacity of Phuket Airport  Project (1) Improvement of passenger Short-term AOT 5,791.12 The existing terminal should be improved to be a domestic terminal, and the terminals at Phuket Airport existing office building of Phuket Airport should be demolished to construct another new international terminal. In the future, the passenger density is expected to reach 132 percent in 2020.  Project (2) Management of transport to Short-term AOT 200.00 It has been forecasted that the runway density of Phuket Airport during peak hours reduce the runway congestion will represent 103 and 128 percent of the capacity in 2015 and 2020 respectively. at Phuket Airport However, construction of the second runway is impossible as a result of limited space, so management is needed. For example, there may be distribution of the quota of flight slots outside peak hours, encouragement of the use of nearby airports and airport public transport links, etc.  Project (3) Construction of more parking Short-term AOT 500.00 It has been forecasted that the bay density of Phuket Airport during peak hours will bays within Phuket Airport represent 120 and 171 percent of the capacity in 2015 and 2020 respectively. In the AOT plan, by 2014, there will be 25 bays at Phuket Airport.

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Table 5.2-1 Transport Infrastructure and Management Ready Plan for AEC, 2014-2035 (Cont’d) Plans/projects Period Responsible Budget Rationale Agencies (million baht)  Plan 1.3.3: Enhancement of the capacity of Presently, Don Muang airport is the hub for low-cost airlines, with a fast-growing Don Muang Airport growth. It has been forecasted that the runway density will exceed the terminal density. The runway density during peak hours is expected to be 164 and 203 percent of the capacity in 2015 and 2020 respectively; the bay density is expected to be 97 percent in 2020.  Project (1) Development of the second phase Short-term AOT 2,934.19 Details of Don Muang Airport Development Plan, Phase II, can be outlined as at Don Muang Airport follows: (1) Renovation of Terminal 2. (2) Renovation of the South Corridor. (3) Restoration of Concourse 5. (4) Renovation of the 7-storey parking building. This is expected to serve a maximum of 30 million passengers a year.  Project (2) Improvement of passenger terminal Short-term AOT 7,304.00 The implementation of the third phase of Don Muang Airport will increase at Don Muang Airport (the third airport capacity up to 40 million passengers per year and be able to serve phase of Don Muang Airport) the expansion of the long-distance low cost airline. The details are, e.g., increase the contact gates from 27 gates to 38 gates, improve the passenger terminals, concourses and the western runway.  Project (3) Expansion of the passenger terminal, Short-term AOT 23,400.00 In the future, the non-aero commercial activities will be included in order office building and non-aero service to serve the expansion of Don Muang Airport. It is forecasted that the area in Don Muang Airport to serve number of aircraft movement at Don Muang Airport will be as high as 60 the Red Line mass transit aircrafts per hour and it needs the connection with the Red Line mass transit as well.

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Table 5.2-1 Transport Infrastructure and Management Ready Plan for AEC, 2014-2035 (Cont’d) Plans/projects Period Responsible Budget Rationale Agencies (million baht)  Plan 1.3.4: Enhancement of the capacity of Chiang Mai Airport  Project (1) Construction of aircraft bays for Short-term AOT 64.20.00 The additional aircraft bays will become necessary in the future for Chiang Mai general aviation at Chiang Mai Airport to serve the general aviation. As a result, the airport will be less Airport congested. This is because the number of tourists coming to Chiang Mai, normally via small aircraft, is rapidly rising since 2011 especially from China.  Project (2) Increase the runway length of Short-term AOT 200.00 Currently, Chiang Mai Airport has only one runway, which is 3,100 m long, Chiang Mai Airport and its capacity is 33 flights per hour. It has been forecasted that during peak hours the runway density will represent 92 and 111 percent of its capacity in 2015 and 2020 respectively. Therefore, the existing runway needs to be lengthened by 2015-2017.  Project (3) Expansion of the terminal area Short-term AOT 1,500.00 It has been forecasted that the terminal density at Chiang Mai Airport will of Chiang Mai Airport represent 76 and 99 percent of its capacity in 2015 and 2020 respectively. Therefore, the construction of more terminals needs to be completed by 2020.  Project (4) Construction of more parking Short-term AOT 500.00 It has been forecasted that the bay density at Chiang Mai Airport will bays within Chiang Mai Airport represent 66 and 100 percent of its capacity in 2015 and 2020 respectively. Therefore, the construction of more parking bays needs to be completed by 2020.

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Table 5.2-1 Transport Infrastructure and Management Ready Plan for AEC, 2014-2035 (Cont’d) Plans/projects Period Responsible Budget Rationale Agencies (million baht)  Plan 1.3.5: Enhancement of the capacity of Hat Yai Airport  Project (1) Expansion of the terminal area Short-term AOT 1,500.00 It has been forecasted that the terminal density at Hat Yai Airport during peak of Hat Yai Airport hours will represent 132 and 164 percent of its capacity in 2015 and 2020 respectively. Therefore, the terminal area expansion needs to be completed by 2015.  Project (2) Construction of more parking Short-term AOT 500.00 It has been forecasted that the bay density at Hat Yai Airport during peak bays within Hat Yai Airport hours will represent 102 and 145 percent of its capacity in 2015 and 2020 respectively. Therefore, the construction of additional bays needs to be completed by 2020.  Plan 1.3.6: Development of Udon Thani Airport to be the hub of the intra-ASEAN air route  Project (1) Enhancement of landside Medium-term DCA 240.00 It has been forecasted that the terminal density at Udon Thani Airport during facilities at Udon Thani Airport peak hours will represent 91 percent of its capacity in 2020. Therefore, the to handle number of passengers landside facilities needs to be improved within 2023 so that it can serve the during peak period at 1,776 number of passenger up to 1,776 passengers per hour during the peak passengers per hour within period. 2023

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Table 5.2-1 Transport Infrastructure and Management Ready Plan for AEC, 2014-2035 (Cont’d) Plans/projects Period Responsible Budget Rationale Agencies (million baht)  Project (2) Enhancement of airside facilities Medium-term DCA 200.00 It has been forecasted that the runway density at Udon Thani Airport during at Udon Thani Airport to handle peak hours will represent 76 and 109 percent of its capacity in 2015 and 2020 number of aircraft movement respectively. While, the bay density during peak hours will represent 106 and during peak period at 15 aircrafts 200 percent of its capacity in 2015 and 2020 respectively. Therefore, the per hour within 2023 airside facilities needs to be improved within 2023 so that it can serve the number of aircraft up to 15 aircrafts per hour during the peak period.  Plan 1.3.7: Development of Krabi Airport as the combined airport with Phuket Airport  Project (1) Enhancement of landside Short-term DCA 790.00 It has been forecasted that the terminal density at Krabi Airport during peak facilities at Krabi Airport to hours will represent 97 and 122 percent of its capacity in 2015 and 2020 handle number of passengers respectively. Therefore, the landside facilities needs to be improved within during peak period at 2,200 2018 so that it can serve the number of passenger up to 2,200 passengers per passengers per hour within 2018 hour during the peak period.  Project (2) Enhancement of airside facilities Short-term DCA 1,155.00 It has been forecasted that the bay density at Krabi Airport during peak hours at Krabi Airport to handle Medium-term DCA 900.00 will represent 79 and 130 percent of its capacity in 2015 and 2020 number of aircraft movement respectively. during peak period at 12 aircrafts While, the runway density at Krabi Airport during peak hours will represent 66 per hour within 2018 and at 15 and 87 percent of its capacity in 2015 and 2020 respectively. Therefore, the aircrafts per hour within 2023 airside facilities needs to be improved so that it can serve the number of aircraft up to 12 and 15 aircrafts per hour during the peak period in 2018 and 2023, respectively.

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Table 5.2-1 Transport Infrastructure and Management Ready Plan for AEC, 2014-2035 (Cont’d) Plans/projects Period Responsible Budget Rationale Agencies (million baht) Strategy 2: Development of transport infrastructure and facilities Tactic 2.1: Enhancement of the capacity of the highway network and land transport facilities  Plan 2.1.1: Widening of the main highways to accommodate the AEC  Project (1) Widening of All ASEAN highways Short-term DOH 27,197.50 Currently, most ASEAN highways in Thailand have four lanes or more. Due into four lanes to physical limitation, eleven routes cannot be widened into four lanes. - Project 1.1: Highway 3: Trat - Hat Lek, Short-term DOH 1,100.00 This highway is part of AH 123 to support the linkage to the Khlong Yai Section 2 border pass, Trat province, and to support the Southern Economic Corridor (SEC). - Project 1.2: Highway 12: Kalasin - Na Khrai Short-term DOH 4,850.00 This highway is part of AH 16 to support the linkage to Mukdahan - Kham Cha-i district border pass and to support the East-West Economic Corridor (EWEC). - Project 1.3: Highway 12: Kalasin - Somdet Short-term DOH 860.00 This highway is part of AH 16 to support the linkage to Mukdahan district, Section 2 border pass and to support the East-West Economic Corridor (EWEC). - Project 1.4: Highway 12: Tak - Mae Sot Short-term DOH 2,850.00 This highway is part of AH 16 to support the linkage to Mae Sot border pass, Tak province, and to support the East-West Economic Corridor (EWEC).

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Table 5.2-1 Transport Infrastructure and Management Ready Plan for AEC, 2014-2035 (Cont’d) Plans/projects Period Responsible Budget Rationale Agencies (million baht) - Project 1.5: Highway 12: Lom Sak - Nam Short-term DOH 5,400.00 This highway is part of AH 16 to support the linkage to the East-West Nao, Section 2 Economic Corridor (EWEC). - Project 1.6: Highway 22: Nong Han district Short-term DOH 2,000.00 This highway is part of AH 15 to support the linkage to Nakhon Phanom - Phanna Nikhom district border pass. - Project 1.7: Highway 22: Sakon Nakhon - Short-term DOH 1,720.00 This highway is part of AH 15 to support the linkage to Nakhon Phanom Nakhon Phanom border pass. - Project 1.8: Highway 33: Prachin Buri - Short-term DOH 1,400.00 This highway is part of AH 1 to support the linkage to Aranyaprathet border Kabin Buri district pass, Sa Kaeo province. - Project 1.9: Highway 101; Rong Kwang Short-term DOH 2,300.00 This highway is part of AH 13 to support the linkage to the Huai Kon district - Wiang Sa district, Section 1-2 border pass, Nan province. - Project 1.10: Highway 202: Yasothon - Short-term DOH 1,720.00 This highway is part of AH 121 to support the linkage to Mukdahan border Amnat Charoen pass. - Project 1.11: Highway 304: Kabin Buri - Short-term DOH 2,997.50 This highway is part of AH 19 to support the linkage to Nong Khai and Pak Thong Chai (linking to forests) and Mukdahan border pass. Kabin Buri-Wang Nam Khiao (Section 3)

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Table 5.2-1 Transport Infrastructure and Management Ready Plan for AEC, 2014-2035 (Cont’d) Plans/projects Period Responsible Budget Rationale Agencies (million baht)  Project (2): Widening of main highways Short-term DOH 7,900.00 Currently, Thailand’s ASEAN highways are located in inner areas, most of which linking to inner areas have four lanes or more. An analysis of the volume of traffic on the ASEAN highways after the AEC starts reveals that some ASEAN highways will have a low service level. Therefore, they should be widened into six lanes or more. - Project 2.1: Widening Highway 36: Kating Short-term DOH 2,200.00 This highway is part of AH 123. An analysis reveals that its service level will Lai – Rayong (Section 1-2) be at F in 2020, so its capacity should be enhanced by widening it from four lanes to six lanes. - Project 2.2: Widening Highway 323, Short-term DOH 1,600.00 This highway is part of AH 123. An analysis reveals that its service level will (Section 101): Krachap Junction - starting be at F in 2020, so its capacity should be enhanced by widening it from point of the Ban Pong Bypass, Ratchaburi four lanes to six lanes. province - Project 2.3: Widening Highway 323 Short-term DOH 1,500.00 This highway is part of AH 123. An analysis reveals that its service level will (Section 202): Phra Thaen Dong Rang be at F in 2020, so its capacity should be enhanced by widening it from Junction - the Kanchanaburi Municipality, four lanes to six lanes. Kanchanaburi province - Project 2.4: Widening Highway 344 Chon Short-term DOH 2,600.00 This highway is part of AH 19. An analysis reveals that its service level will Buri - Ban Bueng and Ban Bueng – Klaeng be at F in 2020, so its capacity should be enhanced by widening it from (Section 1-4) four lanes to six lanes.

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Table 5.2-1 Transport Infrastructure and Management Ready Plan for AEC, 2014-2035 (Cont’d) Plans/projects Period Responsible Budget Rationale Agencies (million baht)  Plan 2.1.2: Development of motorways  Project (1) Development of motorways from Bangkok and its vicinity to other regions - Project 1.1: Motorway: Bang Yai - Short-term DOH 55,600.00 This motorway can support traffic between Bangkok and the western region Kanchanaburi on Highway 4 (Phetkasem Road) and Highway 338 (Borommaratchachonnani Road), which have a high traffic volume. It can increase the flow of travel and freight transport to achieve greater fastness and convenience. - Project 1.2: Motorway: Bang Pa-in - Short-term DOH 84,600.00 This motorway links Bangkok and its vicinity to the northeastern region. It is Nakhon Ratchasima the gateway to the northeastern region and serves as the country’s major agricultural production base. Also, it allows faster transport of goods from Laem Chabang Port to foreign countries. - Project 1.3: Motorway: Pattaya - Map Ta Short-term DOH 16,700.00 This motorway can support the traffic between Bangkok and the eastern Phut region on Highway 3 (Sukhumvit Road), which has a high traffic volume. It can increase the flow of travel and freight transport to achieve greater convenience and safety. It connects the country to Cambodia and other countries in the Economic Quadrangle, helps distribute development into the region, and links Map Ta Phut Industrial Estate to Laem Chabang Port.

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Table 5.2-1 Transport Infrastructure and Management Ready Plan for AEC, 2014-2035 (Cont’d) Plans/projects Period Responsible Budget Rationale Agencies (million baht)  Project (2): Development of motorways, from major cities in border areas to major border pass - Project 2.1: Motorway: Nong Khai - Udon Long-term DOH 25,500.00 It links Laos’ Vientiane with Thailand’s Udon Thani because there are a lot of Thani tourists travelling from Vientiane to Udon Thani (proposed by Consultants). The traffic volume on the main highway: Nong Khai - Udon Thani during peak hours is projected to be 28-62 and 38-85 percent of the capacity in 2015 and 2020 respectively. This existing 4-lane highway can support the traffic volume. If the volume increases in the future, the construction of a motorway may be considered in the long term. - Project 2.2: Motorway: Kanchanaburi – Medium-term DOH 14,100.00 It is a new link between Thailand and Myanmar and Dawei Deep Seaport Ban Phunamron to support the AEC in 2015. - Project 2.3: Motorway: Hat Yai - Sadao Short-term DOH 23,900.00 It will alleviate the traffic congestion on Highway 4 (Phetkasem) from Hat Yai to Sadao border pass, in Songkhla province. Dense communities are located in parallel with Highway 4, and the highway right-of-way is too narrow to widen its lanes. The traffic volume on the main highway: Hat Yai - Sadao during peak hours is expected to exceed the highway capacity. The projected traffic volume is 114 and 154 percent of the capacity in 2015 and 2020 respectively, so it is needed to formulate the most efficient highway plan to maintain the service levels of the main roads that support cars internationally to ensure better traffic flows.

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Table 5.2-1 Transport Infrastructure and Management Ready Plan for AEC, 2014-2035 (Cont’d) Plans/projects Period Responsible Budget Rationale Agencies (million baht) - Project 2.4: Motorway: Chiang Mai - Medium-term DOH 20,000.00 Currently, the route: Chiang Mai - Chiang Rai relies on Highway 118 via Doi Lampang - Chiang Rai – Mae Sai and Long-term Saket, Wiang Pa Pao, and Mae Suai districts, Chiang Mai province to Mae Chan Motorway: Chiang Rai - Chiang Khong (Chiang Rai - 13,000.00 district, Chiang Rai province. The topography in the area is high mountains, Chiang Khong) where vehicles cannot use high speed, so traffic jam is not too serious. During the phase I, the route: Chiang Mai - Lampang - Chiang Rai should be developed to link Chiang Rai’s Mae Sai district to the main city of Chiang Mai for tourism. In the next phase, the route that connects Chiang Rai’s main city to Chiang Khong district should be developed to boost tourism through Chiang Khong border pass. - Project 2.5: Motorway: Prachin Buri - Long-term DOH 25,000.00 The traffic volume on the main highway: Bangkok - Aranyaprathet during peak Aranyaprathet and Bang Pakong - (Prachin Buri - hours is forecast to be 33 percent in 2015 and 53 percent in 2020. The traffic Prachin Buri Aranyaprathet) volume is not high, although there are many trucks on this route, and a lot of Long-term 35,000.00 industrial estates are located along the route. However, this 4-lane highway (Bang Pakong - can support them. If the traffic volume increases in the future, the construction Prachin Buri) of a motorway may be considered in the long term. The construction should be divided into two phases. The phase I should aim to develop the route: Prachin Buri - Aranyaprathet to relieve traffic congestion and optimize freight transport and tourism at Aranyaprathet border pass, Sa Kaeo province. The next phase may deal with the development of the route: Bang Pakong - Chachoengsao - Prachin Buri to support transport of freight into industrial estates in the central and eastern regions.

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Table 5.2-1 Transport Infrastructure and Management Ready Plan for AEC, 2014-2035 (Cont’d) Plans/projects Period Responsible Budget Rationale Agencies (million baht)  Plan 2.1.3: Construction of New Highway  Project (1) Construction of new highway Short-term DOH 2,600.00 Ban Nong Ian border pass is the new gateway of Thailand-Cambodia border Aranyaprathet-Thailand- around Sa Kaeo province which is positioned as the new freight channel. However, Cambodia border (Nong Ian- Highway no. 3366 and 3367 are the small road with some sharp curves. These Stungbot) roads are thus not suitable for trucks. Therefore, the new four-lane highway connecting between Highway no. 33 and Ban Nong Ian border pass is proposed. This can enhance the freight transport between Thailand and Cambodia.  Plan 2.1.4: Development of the safe road system The ASEAN highway network in Thailand is quite long compared to other countries and will be served as the main line among country members in the future. The higher accident rate, therefore, will become more likely. The development of safe road under the human capability constraint is the fundamental principle for safety purpose.  Project (1) Improvement of road hazardous Short-term DOH 2,500.00 The guideline is requesting all relevant authorities to review data on locations on the existing main accidents on the roads that are identified as the AEC’s travel routes and road network freight transit routes that are available now. After reviewing the data, they must specify locations where accidents occur frequently – road hazardous locations. From the tables and maps, they have to survey road hazardous locations to identify safety issues and develop suggestions for improving all hazardous locations identified as the AEC’s travel routes and freight transit routes. Budgets will be allocated for 250 road hazardous locations.

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Table 5.2-1 Transport Infrastructure and Management Ready Plan for AEC, 2014-2035 (Cont’d) Plans/projects Period Responsibl Budget Rationale e Agencies (million baht)  Project (2) Inspection of safety of the Short-term DOH 160.00 The guideline is requesting all relevant authorities to apply the road safety existing main road network method as a tool for detecting safety problems and solving the problems accordingly. For example, the problems are incomplete traffic signs or unidentified road hazardous locations. Budgets will be allocated for inspecting road safety and improving roads based on inspection.  Plan 2.1.5: Development of roadside rest areas to promote road safety Highway service points or rest areas are basic facilities that are suitable and necessary for transit travel and transport. Particularly, after the AEC operates, they can facilitate and enhance the safety of truck drivers. Also, they can promote safety of road transport by reducing accidents from road freight transport, and they will optimize the management of Thailand’s land freight transport.  Project (1) Development of 28 truck parking Short-term DOH 1,300.00 Truck parking areas are for trucks to park which they are not forced to stop areas Medium-term DOH 1,100.00 here. They can be categorized into 3 phases as follows: Long-term DOH 1,000.00 . 9 areas in the short-term: Non Soong (Nakhon Ratchasima), Muang (Surin), Nang Rong (Buri Ram), Phanom Sarakhram (Chachoengsao), Bang Bo (Samut Prakarn), Sopprab (Lampang), Inburi (Sing Buri), Hua Hin (Prachuab Khiri Khan), Bang Saphan (Prachuab Khiri Khan) . 10 areas in the medium-term: Chum Phae (Khon Kaen), Khukhan (Si Sa Ket), Muang (Udon Thani), Muang (Sa Kaeo), Klaeng (Rayong), Ngao (Lampang), Muang (Kamphaeng Phet), Muang (Samut Sakhon), Sichon (Nakhon Si Thammarat), Muang (Krabi) . 9 areas in the long-term: Somdet (Kalasin), Kham Cha Ey (Mukdahan), Sawang Weerawong (Ubon Ratchathani), Khao Saming (Trat), Denchai (Phrae), Lomsak (Phetchabun), Huay Yod (Trang), Nong Chik (Pattani), Kuraburi (Phang Nga)

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Table 5.2-1 Transport Infrastructure and Management Ready Plan for AEC, 2014-2035 (Cont’d) Plans/projects Period Responsible Budget Rationale Agencies (million baht)  Project (2) Development of 13 truck service Short-term DOH 1,400.00 As for truck service areas, all trucks are forced to stop here. They serve as the areas Medium-term DOH 1,400.00 centers for controlling and managing vehicles using ASEAN highways in Thailand. They Long-term DOH 2,400.00 consist of facilities, fuel stations, weighing stations (if any), maintenance centers, driver record stations, etc. They can be categorized into 3 phases as follows: . 4 areas in the short-term: Pak Chong (Nakhon Ratchasima), Kabinburi (Prachin Buri), Phayuha Khiri (Nakhon Sawan), Rattaphum (Songkhla) . 4 areas in the medium-term: Wangnoi (Phra Nakhon Si Ayutthaya), Muang (Tak), Thasae (Chumporn), Thungsong (Nakhon Si Thammarat) . 5 areas in the long-term: Muang Khon Kaen, Sri Racha (Chon Buri), Muang (Phitsanulok), Tha Chang (Surat Thani), Pak Tho (Ratchaburi)  Plan 2.1.6: Development of truck terminals and intermodal facilities at the border pass to The analysis of Thailand’s status for the development of intermodal facilities accommodate international freight transport reveals that Thailand is not prepared for facilitating cross-border freight transport. This is because no truck terminals and intermodal facilities have been developed at the border-crossing points. The opening of the AEC in 2015 will increase the need for truck terminals and intermodal facilities at the border pass in the future. Truck terminals will facilitate unloading goods from trucks from neighboring countries to trucks in Thailand and the linkage to the rail freight transport. This will save transport costs and energy consumption in a long run.

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Table 5.2-1 Transport Infrastructure and Management Ready Plan for AEC, 2014-2035 (Cont’d) Plans/projects Period Responsible Budget Rationale Agencies (million baht)  Project (1) Development of the intermodal Short-term DLT/DOH/ 2,047.21 Intermodal facilities should be developed at proposed locations – areas facilities at Chiang Khong border (Phase 1) TCD situated near Chiang Khong Customs border pass and Chiang Khong railway pass, Chiang Rai province Medium-term DLT/DOH/ 745.45 station (in the future). (Phase 2) TCD/SRT  Project (2) Development of truck terminal at Short-term DLT 966.25 Intermodal facilities should be developed at a proposed location – Nong Khai province the Na Tha railway station, Nong Khai province.  Project (3) Development of border transport It has been proposed to develop the border-crossing point in Nakhon center at Nakhon Phanom Phanom to be a border terminal for both passengers and freight. As for province freight transport, the terminal will be equipped with functions of a freight - Border freight terminal Short-term DLT/DOH/ 1,111.25 terminal and covers about 174 rai. The activities will include: (1) general - Intermodal facilities (Phase 1) TCD transport services and bulk cargo storages, (2) goods aggregation and Long-term DLT/DOH/ 199.50 distribution, (3) customs procedures and common control areas (CCA), (4) (Phase 2) TCD/SRT commerce and trade, and (5) rail transport and multimodal transport. The recommended locations are areas adjacent to Nakhon Phanom Customs border pass (inbound) and Nakhon Phanom railway station (future). When the railway: Ban Phai - Maha Sarakham - Mukdahan - Nakhon Phanom is completed, it will be developed to be intermodal facilities.

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Table 5.2-1 Transport Infrastructure and Management Ready Plan for AEC, 2014-2035 (Cont’d) Plans/projects Period Responsible Budget Rationale Agencies (million baht)  Project (4) Development of a truck terminal Short-term DLT 517.67 Initially, it has been proposed to establish a large truck terminal and at Mukdahan province develop it to be intermodal facilities, phase II, by 2020-2025. The proposed - Large truck terminals locations are the areas next to Mukdahan Custom’s border pass and - Intermodal facilities Mukdahan railway station (in the future).  Project (5) Development of truck terminal at Short-term DLT 966.25 Initially, it has been proposed to establish a small truck terminal. The Chiang Rai province proposed location is the area next to Mae Sai Customs border pass (arrival).  Project (6) Development of truck terminal at Short-term DLT 467.49 Initially, it has been proposed to establish a small truck terminal. The Tak province proposed location is the area for the construction of Mae Sot Industrial Estate/Mae Sot Bypass.  Project (7) Development of truck terminal at Short-term DLT 510.22 Initially, it has been proposed to establish a large truck terminal and Sa Kaeo province develop it to be intermodal facilities, phase II, by 2020-2025. The proposed location is the area opposite Aranyaprathet Municipality School.  Project (8) Development of truck terminal at Short-term DLT 958.32 It has been proposed to establish a large truck terminal, and the proposed Songkhla province location is the inbound on Highway 4, which is not over 5 km from the new Sadao Customs border pass.

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Table 5.2-1 Transport Infrastructure and Management Ready Plan for AEC, 2014-2035 (Cont’d) Plans/projects Period Responsible Budget Rationale Agencies (million baht) Tactic 2.2: Enhancement of the capacity of the railway network linking to gateways and production bases  Plan 2.2.1: Development of double-track railways  Project (1) Construction of double-track Short-term SRT 398,640.00 It has been proposed to develop main double-track railways across the country railways, short term (2015- by 2020 and build new major double-track railways which include: 2020)  Lop Buri - Pak Nam Pho (within a budget of 24,800 million baht)  Map Kabao - Chira Junction (within a budget of 29,800 million baht)  Chira Junction - Khon Kaen (within a budget of 26,000 million baht)  Nakhon Pathom - Hua Hin (within a budget of 20,000 million baht)  Prachuap Khiri Khan - Chumphon (within a budget of 17,200 million baht)  Hua Hin - Prachuap Khiri Khan (within a budget of 9,400 million baht)  Chumphon - Surat Thani (within a budget of 17,500 million baht)  Surat Thani - Hat Yai - Su-ngai Kolok (within a budget of 35,500 million baht)  Hat Yai - Padang Besar (within a budget of 40 million baht for the feasibility study and detailed design)  Pak Nam Pho - Den Chai (within a budget of 29,900 million baht)  Khon Kaen - Nong Khai (within a budget of 18,200 million baht)  Chira Junction - Ubon Ratchathani (within a budget of 32,400 million baht)  Den Chai - Chiang Rai - Chiang Khong (new double-track railway) (within a budget of 77,400 million baht)  Ban Phai - Maha Sarakham - Roi Et – Mukdahan - Nakhon Phanom (new double-track railway) (within a budget of 60,500 million baht)

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Table 5.2-1 Transport Infrastructure and Management Ready Plan for AEC, 2014-2035 (Cont’d) Plans/projects Period Responsible Budget Rationale Agencies (million baht) Tactic 2.2: Enhancement of the capacity of the railway network linking to gateways and production bases  Plan 2.2.1: Development of double-track railways  Project (2) Construction of double-track Medium-term SRT 11,400.00 This focuses on the rail network that connects to piers to support multimodal railways, medium term (2020- and energy-saving transport and the linkage to border pass that will be 2025) important in the future:  Ban Pha Chi - Nakhon Luang district (new double-track railway) (within a budget of 2,900 million baht)  Khon Kaen - Phetchabun - Phitsanulok - Tak (new double-track railway) (within a budget of 6,300 million baht)  Ubon Ratchathani - Chong Mek (new double-track railway) (within a budget of 2,200 million baht)  Plan 2.2.2: Development of double-track railways with standard gauge Development of the high speed train aims to spread prosperity from the center to other regions, to facilitate inter-city travel, and to connect travel of tourists who travel through gateways by land, water and air.  Project (1) Development of Bangkok- Medium-term OTP/SRT 353,000.00 It has been forecasted that after the AEC, the growth of trade and transport at the Nong Khai double-track border pass between Thailand and Lao PDR is dominant, as a result of railway with standard gauge multi-channels to China. Therefore, in the medium-term, Bangkok - Nong Khai in the medium-term phase high-speed train line is essential as it is consistent with the direction of future (2021-2025) growth between Thailand and the ASEAN.

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Table 5.2-1 Transport Infrastructure and Management Ready Plan for AEC, 2014-2035 (Cont’d) Plans/projects Period Responsible Budget Rationale Agencies (million baht)  Project (2) Development of three Long-term OTP/SRT 990,000.00 In the long term, high-speed train development will focus on routes that link the double-track railways with center to other regions and expansion of production bases along the railways. This standard gauge in the long- will facilitate employees’ access to industrial estates that are located far from term phase (2026-2035), i.e., their housing and production as a result of suppliers’ more convenient travel. This Bangkok-Chiang Mai; is essential transport infrastructure development – it will build the country’s Suvarnabhumi Airport Rail capacity, upgrade the population’s quality of life, and drive the country to Link-Chon Buri-Pattaya-Rayong; become the regional transport hub in the future. There will be three high-speed and Bangkok-Padang Besar rail routes to be developed, as follows.  High-speed train: Bangkok - Chiang Mai (390,000.0 million baht);  Airport rail link from Suvarnabhumi Airport - Chon Buri - Pattaya - Rayong (100,000.0 million baht); and  High-speed train: Bangkok - Padang Besar (500,000.0 million baht).  Plan 2.2.3: Development of dry ports to support development of networks along the areas  Project (1) Conduct the development Short-term OTP 40.00 The dry port is similar to a coastal port that is a network of Laem Chabang plan of dry port to enhance Port. It serves as an inland container depot (ICD) with a customs procedure the connectivity of domestic because it has to support exports and imports rather than goods produced for and regional network of the domestic consumption. An inland port needs to be equipped with freight logistics system transport facilities that are similar to those in Bangkok Port or Laem Chabang Port. More importantly, it needs to have a railway network directly connecting the inland port to Laem Chabang Port.

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Table 5.2-1 Transport Infrastructure and Management Ready Plan for AEC, 2014-2035 (Cont’d) Plans/projects Period Responsible Budget Rationale Agencies (million baht)  Plan 2.3.1: Development of the embankment to enhance inland waterway freight

transport  Project (1) Construction and supervision of Short-term MD 2,070.00 The river bank erosion is another major problem which has an direct effect to many (Phase 1) the embankment in Pasak River ports located along both side of Pasak River. The new embankment in the short, Short-term 1,386.90 medium and long term period is recommended which can enhance the river and (Phase 1) coastal freight transport. Medium-term 11,382.00 (Phase 3)  Plan 2.3.2: Development of new coastal ports to support coastal feeder transport

 Project (1) Development of Port A of Laem Short-term PAT 1,864.19 Currently, Laem Chabang Port is the origin and destination of containers transported Chabang Port to serve as a via coastal feeders from other ports along the Gulf of Thailand. However, at Laem public coastal port Chabang, there are not terminals for coastal feeders. In addition, docking has high costs, because local operators have additional costs for handling containers to other piers. Physically, Laem Chabang Port’s waterfront area near the bottom of the first basin between Pier A1 and Pier A0 is 150 m long, so it has the potential to be developed into a coastal terminal.

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Table 5.2-1 Transport Infrastructure and Management Ready Plan for AEC, 2014-2035 (Cont’d) Plans/projects Period Responsible Budget Rationale Agencies (million baht) Strategy 3: Regulation and management of cross-border transport Tactic 3.1: Regulation of cross-border transport to control vehicles passing through Thailand

 Plan 3.1.1: Regulation of border-crossing vehicles to ensure security  Project (1) Installation of travel counters for Short-term DLT 50.00 If trucks from other ASEAN member countries are allowed to run on Thailand’s main border-crossing vehicles to highway network without inspection, they may run out of the route, which will affect optimize the transport system the security of life and property of the general public. If the MOT cannot force the trucks to unload goods to Thai trucks, the measure is GPS installation; the DLT must monitor the trucks and allow the private companies to bid for GPS rental management. The GPS may be installed on trucks with hazardous goods first.  Plan 3.1.2: Regulation of border-crossing vehicles to ensure safety  Project (1) Establishment of a safety Short-term DLT/DOH/ 50.00 The establishment of the Safety Administrative Center in each region (each per administrative center in each HPD region) aims to coordinate work among the DLT, DOH, and HPD during emergencies. region DOH officers and highway police who supervise the centers in different regions shall be authorized to access databases or link important databases of respective agencies.

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Table 5.2-1 Transport Infrastructure and Management Ready Plan for AEC, 2014-2035 (Cont’d) Plans/projects Period Responsible Budget Rationale Agencies (million baht)  Plan 3.1.3: Regulation of border-crossing vehicles to ensure equity  Project (1) Collection of road surcharges Short-term DOH 30.00 Infrastructure charge collection is based on the user-pay concept, whereby people who have an impact on society should take responsibility. It is difficult to collect road surcharges from all vehicles from all neighboring countries because international agreements, including GMS and ASEAN agreements, state that vehicles from aboard must be treated under the same norms applied to domestic vehicles. Now, Thailand has no law concerning the collection of road surcharges from domestic vehicles. Therefore, during the phase I of the AEC, the road surcharge collected should cover only road maintenance costs to minimize the burden on drivers transiting via the border. The charge rates will be multiplied by the distance for which individual trucks run across the border, which can be checked from the GPS installed on them. Tactic 3.2: Management of transport to facilitate cross-border transport  Plan 3.2.1: Management of agencies of the border pass to ensure their efficiency  Project (1) Establishment of the Border Short-term OTP 20.00 The border pass involve many agencies, so the AEC opening will result in increased Administration Authority international freight transport through border pass across the country. This will be followed by many activities, and the lack of efficient integration among the agencies will cause problems. Therefore, it has been recommended to establish the Border Administration Authority in the form of enterprise or public organization to manage activities taking place in front of the border pass. Organizational structures, missions, and organizational establishment should be studied.

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Table 5.2-1 Transport Infrastructure and Management Ready Plan for AEC, 2014-2035 (Cont’d) Plans/projects Period Responsible Budget Rationale Agencies (million baht)  Plan 3.2.2: Extension of service hours for some border pass  Project (1) Operating of 24-hour services Short-term TCD 20.00 For border pass with a high volume of passengers, trucks, personal vehicles, and buses, a day for Sadao border pass they should be open 24 hours a day to facilitate passenger and freight transport. In a short term, Sadao border pass is the readiest to be open 24 hours a day. For large border pass, e.g. Nong Khai, Aranyaprathet, Mukdahan and Nakhon Phanom border pass, they should be open 24 hours a day on trial for a certain period for assessment first.  Plan 3.2.3: Collection of terminal charges at the border pass  Project (1) Collection of terminal charges Short-term DOH/TCD 10.00 The opening of the AEC will increase traffic congestion at the border pass, which will be followed by the need for more facilities, infrastructure maintenance, and staff. All these require disbursement from regular national budget monies, which usually takes a long time. Sometimes, a long disbursement process obstructs timely problem- solving. Therefore, it has been proposed to collect terminal charges for management of the border pass areas and timely infrastructure maintenance in order to facilitate service users. Appropriate charge rates should be studied.  Plan 3.2.4: Development of traffic signs for the AEC  Project (1) Development of trilingual traffic Short-term DOH 500.0 Traffic signs, including warning and guiding signs, to accommodate the traffic volume signs of ASEAN should be in at least in Thai and English. For some main highways, languages of neighboring countries should be added because truck drivers from neighboring countries may not understand English.

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Table 5.2-1 Transport Infrastructure and Management Ready Plan for AEC, 2014-2035 (Cont’d) Plans/projects Period Responsible Budget Rationale Agencies (million baht)  Plan 3.2.5: Negotiation over new routes for international transport  Project (1) Development of AH 15 and R12 Short-term DOH - Highway AH 15 is a major route that links Udon Thani to Nakhon Phanom provinces, as international transport routes and can serve as a transit transport route (TTR) via R12 in Lao PDR and to Hanoi in Vietnam and Nanning in Guangxi in China, the distance of which is shorter than that of Mukdahan border pass. This route has not been fixed as a TTR under Protocol 1 of the AFAFGIT Agreement.  Project (2) Development of R8 as an Short-term DOH - Being a road in Lao PDR, R8 connects to Bueng Kan province in Thailand and can be international transport route connected to Vietnam’s Vinh and Vung Ang Port. The DOH has a plan to construct the fifth bridge across the Mekong River in Bueng Kan province in order to facilitate the shipping from upper northeastern Thailand to Vinh and Hanoi. Currently, the route is not an ASEAN highway or an international freight transport route.

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Table 5.2-1 Transport Infrastructure and Management Ready Plan for AEC, 2014-2035 (Cont’d) Plans/projects Period Responsible Budget Rationale Agencies (million baht) Strategy 4: Facilitation of cross-border transport for logistics providers Tactic 4.1: Facilitation of operating logistics services in ASEAN member countries

 Plan 4.1.1: Government agencies facilitate business negotiation

 Project (1) Government agencies lead Short-term MOC 20.00 There should be meetings for business matching between operators from Thailand negotiations over business and those from neighboring countries. A government agency may lead the matching with ASEAN member negotiations, and a Memorandum of Cooperation may be signed to allow Thai countries private operators to share ideas with all stakeholders to reduce obstacles to international trade. As for business discussions, they may present market channels and introduce new products to open international markets, which will facilitate Thai logistics providers’ expansion of their services to member countries.  Plan 4.1.2: Support for research on logistics business in the ASEAN

 Project (1) Provision of financial Support for Short-term MOC/OTP 100.00 The MOC and MOT should provide funding support for research related to logistics research on logistics business in business in the ASEAN to create opportunities for Thai logistics providers. They can the ASEAN to create business survey the needs of clients in other countries and analyze the development opportunities for Thai logistics directions, strengths and weaknesses of markets in those countries. providers

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Table 5.2-1 Transport Infrastructure and Management Ready Plan for AEC, 2014-2035 (Cont’d) Plans/projects Period Responsible Budget Rationale Agencies (million baht) Tactic 4.2: Promotion and development of Thailand’s local logistics providers  Plan 4.2.1: Encourage of the private sector to enter into joint ventures with the government business  Project (1) Encouragement of Thai logistics Short-term/ DLT - It has been proposed that the MOT provide support for Thai operators with providers to enter joint ventures Medium- potential, in terms of finance, personnel, technology and public private participation in truck terminals and term (PPP) in truck terminals and intermodal facilities in the border areas in the future. intermodal facilities at border This aims to increase the competitiveness of Thai operators on a par with leading countries in the region. areas  Plan 4.2.2: Amendment of regulations to support logistics business of Thailand

 Project (1) Pushing of the Logistics Business Short-term MOC - The intention of this Act is: (1) to improve build the competitiveness of Thai logistics Promotion and Development providers by setting service standards, and (2) to develop logistics business in Thailand in Act line with customers’ demand and economic circumstances in response to free trade and to achieve standard and reliable logistics business with competitive capacity. The essence of this Act is to establish the committee on promotion and development of logistics business, the committee on service standards, and office of the committee on promotion and development of logistics business, with staff. These bodies will serve as law enforcement organizations, which will set standards of logistics services and promote logistics business in the form of tax incentives.

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Table 5.2-1 Transport Infrastructure and Management Ready Plan for AEC, 2014-2035 (Cont’d) Plans/projects Period Responsible Budget Rationale Agencies (million baht)  Project (2) Customs facilitation for cross- Short-term TCD/MOC - The TCD has no system to certify existing logistics providers as the shippers, so they border transport of logistics have to request a certificate from the container liners that are real shippers to providers declare to customs officials for transit cargo through Lao PDR to export to Laem Chabang Port. This costs them money and time for customs procedures. If the Logistics Business Promotion and Development Act is effective, the Customs Act should be amended – to certify logistics providers as shippers and to facilitate transit cargo and transshipment cargo according to the rights provided under the Barcelona Convention Act, 1921. If the Logistics Business Promotion and Development Act is not effective, the TCD should guarantee time for transit cargo inspection to shorten transit transport and customs procedures. Tactic 4.3: Facilitation of insurance for international transport  Plan 4.3.1: Development of IT systems to facilitate insurance  Project (1) Development of IT systems that Short-term OIC/DLT - There should be support for the IT system development to allow transport link data within ASEAN member operators to buy an advance insurance policy in their own countries and use them in countries to facilitate advance neighboring countries, including Vietnam and Singapore. This can reduce transport policy purchase in their own time significantly, compared when they stop to buy insurance at the border before crossing the border to another country. The ten member countries should seek ways countries to expand cooperation across all of them in order to allow the AEC to result in real and sustainable benefits to all member countries.

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Table 5.2-1 Transport Infrastructure and Management Ready Plan for AEC, 2014-2035 (Cont’d) Plans/projects Period Responsible Budget Rationale Agencies (million baht)  Plan 4.3.2: Establishment of high-standard insurance companies in ASEAN member countries  Project (1) Encouragement of Thailand’s Short-term OIC/MOC - Thai insurance companies equipped with an international standard management major insurance companies to system should be encouraged to enter into joint ventures with companies in enter into joint ventures in neighboring countries through cooperation mechanisms under the ASEAN Insurance Council. Also, they should be encouraged to present high standard insurance insurance business in the ASEAN schemes on international freight transit routes, as good-quality service alternatives for operators in Thailand and neighboring countries. Apart from giving direct benefits to Thai operators, this will improve the standards of insurance business in the ASEAN.  Plan 4.3.3: Facilitation of coordination of insurance systems  Project (1) Establishment of the Insurance Short-term OIC 5.00 The Call Center should be established to receive information about incidents, Call Center coordinate with insurance companies, and monitor international insurance claims. The Call Center must be located in the member countries too, and Thai-speaking officers should be provided to accelerate work coordination. The Center may be located at the rest areas where all trucks and buses must stop. The policies for transit transport should be available at the rest areas too to facilitate users of transit transport routes.

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Table 5.2-1 Transport Infrastructure and Management Ready Plan for AEC, 2014-2035 (Cont’d) Plans/projects Period Responsible Budget Rationale Agencies (million baht) Tactic 4.4: Training for logistics personnel for the AEC  Plan 4.4.1: Encouragement of academic institutions and the private sector to produce logistics personnel  Project (1) Training for logistics personnel Short-term DLT/TIFFA 200.00 It has been proposed that DLT and the Ministry of Education (MOE) should provide to meet the market needs budget monies for producing logistics and transport personnel continually. Also, the DLT and MOE should encourage private operators that are capable of providing short course training for frontline officers to join the DLT for the training. Requirements stated in the advance transport quality standards can be also applied. Topic in the raining may include:  Rules and agreements on cross-border transport and transit.  Basic and advance knowledge on international freight transport.  Procedures for border crossing for people and vehicles.  English communication in transport business.  Use of geo-informatics to support freight transport.  Plan 4.4.2: Increase in the number of professional truck drivers  Project (1) Training of professional truck Short-term DLT 50.00 Government agencies must be encouraged to build confidence for professional truck drivers drivers that they will earn a good income and have a stable job. This will attract the general public into this career. The DOT may oversee their welfare seriously, such as income guarantee, on-duty protection, family care, and additional benefits for truck drivers with professional practice. Also, the DOT should provide training for truck drivers, such as:  Safe driving.  Basic vehicle inspection and maintenance.  ASEAN traffic rules and traffic signs.

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Table 5.2-1 Transport Infrastructure and Management Ready Plan for AEC, 2014-2035 (Cont’d) Plans/projects Period Responsible Budget Rationale Agencies (million baht) Tactic 4.5: Development of the ASEAN transport data center for logistics providers in Thailand  Plan 4.5.1: Development of databases to support logistics providers  Project (1) Development of databases on Short-term DLT 50.00 It has been recommended to develop additional databases in the website: transport of ASEAN member www.thaitruckcenter.com, for example: countries  Land, rail, water and air transport routes and their conditions.  Transport facilities.  Plans on the development of transport systems and facilities of all ASEAN member countries.  Plan 4.5.2: Development of a handbook on the preparation for operating transport and logistics business  Project (1) Preparation of a handbook on Short-term DLT 30.00 It has been recommended to prepare a Thai handbook to prepare Thai operators for the preparation for operating operating logistics business in ASEAN member countries. This aims to boost their transport and logistics business understanding and makes it possible to assess their opportunity to open markets in the ASEAN abroad. Details in the manual should include:  Regulations and guidelines for running logistics business in neighboring countries.  Thai databases of the list of transport operators in ASEAN member countries, which identify their transport and logistics branches.

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Abbreviation of the agencies: DLT: Department of Land Transport DOH: Department of Highways SRT: State Railway of Thailand MD: Marine Department TCD: The Customs Department PAT: Port Authority of Thailand DCA: Department of Civil Aviation AOT: Airports of Thailand OTP: Office of Transport and Traffic Policy and Planning HPD: Highway Patrol Division IEAT: Industrial Estate Authority of Thailand MOC: Ministry of Commerce TIFFA: Thai International Freight Forwarders Association OIC: Office of Insurance Commission

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Figure 5.2-1 Location of the Project under the Transport Infrastructure and Facilities Preparation Plan for the Northern Region

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Figure 5.2-2 Location of the Project under the Transport Infrastructure and Facilities Preparation Plan for the Central, Eastern and Western Regions

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Figure 5.2-3 Location of the Project under the Plan for the Preparation of Infrastructure and Facilities for Northeastern Thailand

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Figure 5.2-4 Location of the Project under the Transport Infrastructure and Facilities Preparation Plan for the Southern Region

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5.3 Impacts of the Implementation of the Preparation Plan for AEC

Expected benefits of the plan implementation are divided into direct and indirect benefits. There are two groups that will receive the direct benefits: 1) operators for target industries – production and services, and 2) tourists. The indirect benefits will go to: 1) local operators, and 2) local people, and 3) the government sector. Directs benefits for the operators: The target industries include agriculture (rubber rubbers, rice, sugar, cassava, and fresh, chilled, frozen and dried fruit); and industry (automotive and parts, chemical products, oil products, plastic pellets, and computers and their parts and accessories). As for the agricultural sector, the benefit it will receive from the Project will have significant contribution to the development of transport infrastructure and facilities, such as widening of the main highways linking to border pass into four lanes or development of motorways linking to land border pass. This is because the target agricultural industries transport goods from the production base through the central markets, processing plants, and exporters’ plants that are situated in industrial estates in Bangkok and its vicinity, the eastern region, and other industrial estates near major gateways, such as Laem Chabang Port and border trade posts. The development of the network system along the freight transport routes as proposed in the Project will provide a highly-efficient, fast, and safe transport system that helps with scheduling. Apart from keeping the transport costs low, it can increase the export volume while the target industries are concentrated in the country’s major industrial estates, from which most freight is transported to major gateways, e.g. Laem Chabang Port, to destination countries. It is noted that both agricultural and industrial products are exported to major gateways, especially Laem Chabang Port. Accordingly, the plan for the development of a dry port in Nakhon Ratchasima province is an important alternative for the development of the transport network along the routes in this study. Direct benefits to tourists: The benefits for tourists include those travel for pleasure or commute via Thailand’s gateways (land border pass, airports, and ports) using public transport systems or personal cars. For these groups, the Consultants conducted simple estimation based on the projected number of people crossing Thailand’s border pass. The estimation revealed that the revenue from their spending will increase by 1.33 and 1.69 times in 2015 and 2020 respectively. However, this estimate does not reflect the scale of the transport efficiency improvement. If the gateway capacity is enhanced, especially for

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existing international airports, e.g. Suvarnabhumi Airport, phase II (construction of additional runways), tourists will experience more convenience. This will increase the travel frequency and increase tourism revenue to the country. Indirect benefit to local operators, local people, and the government sector: The enhancement of the efficiency and capacity of the transport network development plays an important role in stimulating economic growth. It will enable operators in other industries to earn benefits from business along the Economic Corridor in provinces linked to the transport system as indicated in the implementation plans. This includes tourism and souvenir business in provinces with tourist attractions, gas stations on the main roads, truck transport between train stations, ports, airports, advertising on trains, car rental, and restaurants. This will accommodate urban growth, as well as consumption and economic growth in the local areas.

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