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World Bank Document Document of The World Bank FOR OFFICIAL USE ONLY Public Disclosure Authorized ReportNo. 2070a-TH THAILAND STAFF APPRAISAL REPORT Public Disclosure Authorized OF A FIFTH RAILWAY PROJECT Public Disclosure Authorized December 26, 1978 Transportation Division Public Disclosure Authorized Project Department East Asia and Pacific Regional Office This documenthas a restricteddistribution and may be used by recipientsonly in the performanceof their official duties. Its contentsmay not otherwisebe disclosed withoutWorld Bank authorization. CURRENCY EQUIVALENTS Currency Unit Baht (B) (1 Baht = 100 Satangs) US$0.0490 = B 1.00 US$1.00 = B 20.45 US$49,020 = B 1 million SYSTEM OF WEIGHTS AND MEASURES Metric British/US 1 centimeter (cm) 0.033 feet (ft) 1 meter (m) = 3.2808 feet (ft) 1.0939 yard (y) L, kilometer (km) = 0.6214 miles (mi) i metric ton (ton) 0.9841 British long tons (lg tons) 1 kilogram (kg) = 2.2 pounds (lb) ABBREVIATIONS AND ACRONYMS A - Ampere c.i.f. - Cost, insurance, freight CPCS - Canadian Pacific Consulting Services hp - Horsepower ICB - International Competitive Bidding KV - Kilovolt KW - Kilowatt p.a. - per annum SRT - State Railway of Thailand V - Volt FISCAL YEAR October 1 to September 30 FOR OFFICIAL USE ONLY THAILAND STAFF APPRAISAL REPORT OF A FIFTH RAILWAY PROJECT Table of Contents Page No. I. TRANSPORT SECTOR .... 1 A. Transport System .... 1 B. Transport Demand .... 3 C. Transport Policy, Coordination and Investment. 4 II. RAILWAY SUBSECTOR .... .. 5 A. Background and Past Bank Group Assistance to the Railways .... .. 5 B. SRT Organization .... .. 6 C. Facilities .... .. 7 D. Traffic . ... 9 E. Operations .... ...... 12 F. Tariffs and Costs .... ...... 12 G. Budget, Accounting and Audit . 13 H. Revaluation of Assets .... ...... 14 I. Uneconomic Lines and Services . 14 III. INVESTMENT PLAN AND PROJECT ... 16 A. Investment Plan .... ...... 16 B. Project Definition and Loan . 17 C. Project Description .... ....... 18 D. Cost Estimates .... ...... 20 E. Financing Plan . ........ .. 21 F. Project Implementation ... ...... 21 G. Action Plan .... ....... 21 H. Procurement .... *. ...... 23 I. Disbursements . ... 23 IV. ECONOMIC EVALUATION .C.E.A.T.O.N.. ............ 24 A. SRT's'Transport Role . .... 24 B. Evaluation Summary .... ..... 24 C. Evaluation Details .... ..... 25 D. Sensitivity Analysis and Project Risks . 26 This report was prepared by Messrs. C. Buratti (Engineer), 0. Murthy (Consultant), L. Seigel (Financial Analyst) and A. Weckerle (Economist). rThis documenthas a restricteddistribution and maybe usedby recipientsonly in the performance of their official duties. Its contents may not otherwise be disclosedwithout World Bank authorization. Page No. V. FINANCIAL EVALUATION . 27 A. General. 27 B. Past Financial Performance . 28 C. Assumptions for Financial Projections. 31 D. Forecast Financial Performance . 33 E. Sensitivity Analysis and Financial Risks . 36 VI. AGREEMENTS AND RECOMMENDATIONS . 37 ANNEXES 1. Past Bank Group-Financed Transport Projects 38 2. Selected Documents and Data Available in the Project File 40 TABLES 1. Estimated and Projected Public Passenger Traffic for 1976-91 2. Estimated and Projected Freight Traffic by Modes for 1968-91 3. Public Transport Investments during the Third and Fourth Five-Year Development Plans 4. Estimated Investment Requirements for Transport Infrastructure in 1977-91 5. SRT Track and Infrastructure - Details as on September 30, 1977 6. Rails in Meter Gauge Line Tracks 7. Inventory of SRT Motive Power and Rolling Stock as of September 30, 1977 8. SRT Passenger Traffic from 1967-81 9. SRT Freight Traffic (CL) by Commodities for 1972-81 10. Selected Operating Statistics 1972-77 11. SRT Passenger Tariffs 12. SRT Freight Tariffs (Car-Load Rates) 13. SRT Income Accounts: 1974-82 14A. SRT Investment Plan, 1977-81 14B. SRT Investment Plan: Cash Requirements 15. Project Composition and Cost 16. Physical Content of the Project 17. Acquisition of New Diesel Locomotives for Freight Service in 1977-81 18. Replacement of Hitachi Locomotives with "Other" Diesel Locomotives 19. Diesel Locomotive Utilization 20. Passenger Car Acquisition in 1977-81 21 Requirements of Additional Passenger Cars in 1977-81 22. Requirements of Freight Cars 1977-81 23. Track and Bridge Rehabilitation Program, 1977-81 24. Makkasan and Districts Workshops: Machinery and Equipment Financed by the Loan 25. Implementation Schedule, 1977-81 26. Procurement Schedule for Bank-financedItems 27. Estimated DisbursementSchedule 28. Economic Returns on 1979-81 Investments 29. SRT Cash Flow Data: 1974-82 30. Operating Revenues and Costs: Effects of Inflation, 1972-1977 31. SRT Balance Sheets: 1974-82 32. Long-term Debt as of September 30, 1977 CHART Chart No. 18916 - OrganizationChart of State Railway of Thailand MAPS IBRD 13621 - Transport System IBRD 13622 - Track Rehabilitationand Signalling ImprovementSchemes I. TRANSPORT SECTOR A. Transport System General 1.01 Thailand'stransport system is a mix of traditionaland modern modes, principally(in order of importance)roads, the railways and inland waterways. The highest concentrationof traffic is over the main arteries constituted by national roads, railways and river navigation. National roads generally run in close proximity to railway lines and, in the Chao Phya basin extendingnorth from Bangkok, all three principalmodes are represented. Total length of the transportnetwork is adequate for the next decade, but its quality, in particularthat of secondaryand tertiary roads, needs sub- stantial upgrading. Roads 1.02 By traffic volume, network length and value of sunk investments, roads are the most important transport infrastructure. National highways, the primary road system, total nearly 13,000 km which is more than three times the length of the railways (about 3,800 km). Like the railway lines, they radiate from Bangkok to the national borders. More than 90% of national roads are paved. 1.03 Provincialroads, the secondaryroad system connectingprovincial towns and other major populationcenters with national roads, total more than 22,000 km. Despite increasingtraffic requirements,most provincial roads are in very poor condition. About 60% (13,000 km) are unimprovedand often not passable in rainy weather. Of the remaining 40% (9,000 km), half are paved and half have graveled surfaces. National highways and provincial roads primarily serve the rural population,as do inland waterways and the railways. The responsibilityfor constructionand maintenance of the national and provincialroad systems is vested in the Departmentof Highways in the Ministry of Communications. A program for upgrading secondary roads is underway. 1.04 Tertiary roads are defined as roads not classified as national, provincialor urban. They include cycle tracks and, in some cases, even footpaths. Estimates place their length at between 40,000-60,000km, but inventorydata are incompleteand sketchy. Although a few thousand km of these roads have been improved in recent years, maintenance has been limited. Regional coverage of these roads is not balanced. Tertiary roads connect villages and hamlets with the primary and secondaryroad systems, railways and inland waterways. They are administeredby a number of over-lapping national, provincialand local agencies - a system which needs rationalizing. Appropriate steps for improving tertiary roads are under study (para. 1.14). Inland Waterways 1.05 The inland waterways system consists of the rivers and canals in the central plains and some sections of the Mekong river. Navigable waterways in the central plains comprise about 1,600 km in the rainy season and 1,100 km -2- in the dry season. During the rainy season (July to December), barges up to 80 tons and two meters draft can negotiate the waterways from the gulf of Thailand to Uttaradit (about 700 km). In the dry season (January to June), navigation is restricted to the section from Bangkok to Nakhon Sawan, halfway between the capital and Uttaradit. The principal rivers in the waterways system are the Chao Phya, which is navigable up to Nakhon Sawan; the Nan River, linking Uttaradit to Nakhon Sawan; and the Pa Sak River between Ayutthia (on the Chao Phya) and the Rama VI dam. Apart from a string of landing places, built mainly for private use, no river port facilities exist. The fleet of mostly wooden barges numbers about 7,000, of which about 50% exceed 40 tons and 10% (steel barges) have a dead weight range of 100-300 metric tons. Most of the fleet is privately owned. Public investment in waterways transporthas been very limited in the past; a project to improve the system is currently under preparation (para. 1.14). Sea Ports 1.06 There are some 35 sea ports in Thailand, which can be broadly divided into two groups according to location, size and function. The first group includes Bangkok, Si Racha and Sattahip - all of which are within 200 km of the capital and serve as Thailand's principal external trade outlets. Bangkok, the country's most important port, dominates internationalwaterborne traffic, accounting for 90% of dry cargo imports and exports except bulk agriculturalexports handled at deep water anchorage off Si Racha. Si Racha is the port of discharge for most oil imports, and Sattahip, built as a military facility, handles some containerizedcommercial cargo at present. However, the Government has decided to develop Sattahip as a major commercial deep sea port, and the first investments are scheduled for the early eighties. The second group consists of the southern ports, which are scattered
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