Project Proposal

Feasibility Study For the Missing Links and Spur Lines of the

Singapore Kunming Rail Link Project in CLMV Countries

Revised June 28, 2002Project Proposal

(Final Draft)

Feasibility Study

For

the Missing Links and Spur Links of the

Singapore Kunming Rail Link Project in CLMV Countries

Project ID: TRN/02/005IAI Project Formulation Workshop

24-26 April 2002, Vientiane, Lao PDR1. Background of the Project

1.1 Introduction

The Singapore Kunming Rail Link (SKRL) Project was proposed at the Fifth ASEAN Summit in Bangkok in December 1995, with Malaysia as the project coordinator. The SKRL Project is the core agenda for action of the ASEAN Mekong Basin Development Cooperation (AMBDC) Program. At the Second ASEAN Informal Summit in Kuala Lumpur in December 1997, the ASEAN leaders agreed that the proposed rail link should be implemented by a consortium involving all ASEAN countries and that a decision be made about its implementation. The leaders also agreed that non-ASEAN countries, such as the United States, Japan and the European countries, would be invited to participate in its construction. The 1998 Hanoi Plan of Action again underscored the importance of the SKRL project.A team of Malaysian consultants commenced the feasibility study for the Singapore Kunming Rail Link Project in March 1997 and completed in August 1999. The study examined six routes to link Singapore with Kunming. All the six routes have a common sector from Singapore to Bangkok via Kuala Lumpur. The study results are briefly presented in Table 1.1 below:Table 1.1 Route Alternatives for SKRL Project

Study RouteTotal Capital Outlay (US$ Billion)Route Distance (km)Missing Links (km)Countries Involved

Route 11.85,382431Cambodia, Lao PDR, Vietnam

Route 26.04.5591,127Myanmar, Thailand, China

Route 31.14,259531Lao PDR, Vietnam

Route 45.74,1641,300Lao PDR, China

Route 51.14,481616Lao PDR, Vietnam, Thailand

Route 61.14,225589Lao PDR, Vietnam, Thailand

Source: Feasibility Study for the Singapore Kunming Rail Link, K.L. Consultant November 2000

Among the six routes, the Consultants recommended Route 1, as it has the highest social economic impact. The Consultants also recommended the development of part of Route 2 that would integrate Myanmar into the regional rail network. This overall route configuration covers seven ASEAN member countries and China.The sectors of proposed Route 1 from Bangkok to Kunming, spur links between Lao PDR and Vietnam; and missing links in Myanmar as well as Thailand are shown in Table 1.2 below.

Table 1.2 Route Compositions by Country of SKRL

CountryRouteLength

ThailandBangkok Aranyaprathet 200

CambodiaPoipet Sisophon Phnom Penh 48 + 352 = 400

CambodiaPhnom Penh Loc Ninh300

VietnamLoc Ninh Ho Chi Min Hanoi Lao Cai150 + 2000 = 2150

ChinaHekou Kunming350

Lao PDRVientiane Thakhek Mu Da- Tan Ap466 + 53 = 519

ThailandThree Pagoda Pass Nam Tok150

MyanmarThree Pagoda Pass Mawlamyine116

The ASEAN Transport Ministers (ATM) at their sixth meeting in October 2000 in Bandar Seri Begawan, Brunei Darussalam supported the above route recommendations. Subsequently, the ASEAN leaders at the Fourth ASEAN Informal Summit in Singapore in November 2000 endorsed the broad thrust of the feasibility study and directed that the project should be moved forward. The Seventh ATM in Kuala Lumpur reiterated the importance of the SKRL Project, as this will provide the link to Europe, through the Trans-Siberian railway network.

The ASEAN leaders at the Seventh ASEAN Summit in Brunei Darussalam in November 2001 reaffirmed the SKRL as a priority project, and endorsed the routes agreed by the transport ministers.

1.2 Need of Preparation Studies

Consultancy services will be required for the conduct of feasibility study which will lead to conduct the detailed feasibility studies and subsequent engineering studies for the missing sections and spur lines as well as improvement and upgrading works for the SKRL priority network consisting of Route 1 and part of Route 2, which covers Cambodia, Lao PDR, Vietnam, Thailand, and Myanmar. Some 1,265 km of missing links and spur lines in these five countries are identified in Table 1.3 below: Table 1.3 Missing Links and Spur Lines of Selected SKRL Route Configuration

Missing and Spur LinesCountry InvolvedDistance (km)

Poipet - SisophonCambodia48

Phnom Penh Loc NinhCambodia286

Loc Ninh Ho Chi MinhVietnam149

Ho Chi Minh Vung TauVietnam75

Three Pagoda Pass Mawlamyine Myanmar116

Nam Tok Three Pagoda PassThailand153

Vientiane Thakkek Mu DaLao PDR466

Mu Da Tan ApVietnam53

Source: Feasibility Study for the Singapore Kunming Rail Link, K.L. Consultant November 2000.

The route selected at present for SKRL project is illustrated as shown in Figure 1 below.

Figure 1 Singapore Kunming Rail Link Route

The numbers are to be referred with the above table.

The present status of the implementation progress of the SKRL Project as of April 2002 is tabulated in Table 1.4 below.

Table 1.4 Present Status of Missing Links and Spur Lines of SKRLMissing Links and Spur LinesPresent Status and Notes

Poipet - SisophonChina, Japan, Germany and Thailand conducted preparatory studies on various levels. ADB included this rail link project (US$ 22 million estimated by Thai Study) for T/A for project preparation in 2002 and expects its implementation from 2004.

Cambodia Thailand Rail Restoration ProjectThe SKRL Project has been included in Cambodias National Development Plan. ADB confirmed its financial assistance for the implementation for 2002 2004.

Phnom Penh Loc NinhStudy is expected to be started from 2003 - 2004 but depend on above PPT/A. Estimated cost is US$ 500 million based on estimates by K.L. Consultant including bridges over the Mekong River (L= 2000m) and the Sap River (L=1800m). No study has been done yet.

Sisophon Phnom PenhRehabilitation work is needed especially for bridges. China, Japan and Germany conducted various studies in the past 5 years. No concrete rehabilitation plan prepared yet.

Rolling stocks for Cambodia11 locomotives needed. French government indicated interest but pending. In 2002, Cambodia Railway Company reformed its operation structure.

Loc Ninh Ho Chi MinhRailway track built by French around 70 years ago exists but destroyed by war. Pre-F/S have been done in 2001 by Vietnamese consultant attached to the Vietnam Railway. No base exists along major portion of planned track.

Ho Chi Min Vung TauLarge-scale container port in Cai Mep or Vung Tau has been under planning.

Thakhek Mu Da (Spur Line)Included in the Vietnam National Railways Master Plan 2020. Pre-F/S has been completed in 2001

Nong Khai - VientianeRailway of Thailand extended to the middle of the Friendship Bridge over the Mekong River in Thailand side. Detailed study for Lao PDRs portion (3.5 km) completed. The estimated cost of this portion is US$7.0 million, but no financial arrangement started yet. The total length of planned railway in Lao PDR side is 14 km.

Vientiane - KunmingThis 700 km length railway was studied by China in 1999

Mu Da Tan ApPre-F/S completed in 2001.

Nam Tok Three Pagoda Pass (Thailand)

Three Pagoda Pass Mawlamyine (Myanmar)Three Pagoda Pass to Thanbuzayat, a distance of 100 km railway track in Myanmar was built during WW II and its alignment exists. This line needs to be newly constructed and the Thanbyuzayat-Mawlamyine, 56 km of existing track is required to be upgraded. The spur line is to be redesignated as Three Pagoda- Mawlamyine. External financial assistance is required to construct the missing link between Three Pagoda Pass- Thnabyuzayat. The Thanbyuzayat-Mawlamyine line will be upgraded with internal funding. To link Mawlamyine to the main network, a rail-cum-bridge on Thanlwin River is under construction and expected to be completed in 2003.

Rehabilitation of Railway Network in MyanmarRehabilitation work on existing line is also needed as construction of SKRLs missing lines in Myanmar.

The detailed design study of Poipet Sisophon is under discussion with ADB for its implementation in 2003.

2. Outline of the Project

The Project principally aims to complete feasibility studies for the missing links and spur lines of SLRL. As no study taken place for the Route 1 and a part of Route 2 after these were selected among alternative routes, the economic and financial viability of SKRL will be studied further in depth.

The Project is composed of the following three (3) feasibility studies:

A. Study of the economic and financial viability of the agreed SKRL route;

B. Study of the missing links and spur lines of SKRL; and

C. Study of the harmonization of railway standards

A. Study of the economic and financial viability of the SKRL agreed route

This study will lead to the completion of the railway track between Singapore and Kunming of China and allow the world-famous tourism train, Eastern Orient Express, to transport tourists not only from Singapore to Bangkok, but up to China. Further, this railway link is planned to be connected with the Siberian Railway, which will make railway travel possible between Singapore and Europe via Malaysia, Thailand, Cambodia, Vietnam, and China.

K. L. Consultant conducted study for the financial viability of the SKRL in 2000. The result of this study led to the selection of Route 1 and part of Route 2 as the preferred railway route configuration of the SKRL Project. More in depth financial viability study specifically for Route 1 is needed at present.

The share of financial risk should meet the share of expected economic benefit or financial revenue from the operation of the SKRL. The equitable sharing of the financial burden and benefits may be realized by establishing a multinational freight and passenger transport entity, which would be the lessee of the railway link and operate the rolling stocks. The Study therefore will seek the effective and possible means of establishing this private, public or public-private company to operate and manage the SKRL. However, the study for the formulation of programs for the operation and management of the SKRL will be conducted after the economic and financial viability of the SKRL has been established. This additional study will include the possible schedule of fees and charges to be collected by the railway operation entity.

B. Study of the SKRL missing links and spur lines

The following SKRL rail sections would be addressed by the feasibility study.

(1) Phnom Penh Loc Ninh in Cambodia (286 km);

(2) Loc Ninh Ho Chi Minh Vung Tau in Vietnam (224 km);

(3) Vientiane Mu Da in Lao PDR (466 km)

(4) Mu Da Tan Ap in Vietnam (53 km); and

(5) Three Pagoda Pass Thanbyuzayat in Myanmar (110 km)

The study will include the rehabilitation plan of the existing railway line in Cambodia.

In the Third Meeting of the Special Working Group on the SKRL Project in Yangon, Myanmar on 14-15 May 2002, Thailand and Viet Nam requested that the Feasibility Study includes the route connection from Nam Tok to Three Pagoda Pass under part of Route 2 and Tan Ap to Vung Ang rail line, respectively.

C. Study of the harmonization of railway standards, traffic control and signaling system

The railway design standards and criteria differ by each country in ASEAN, especially in CLMV due to the historical background of the railway system of each member country. The harmonization of design standard not only for railway design but also traffic control and signaling system is needed to ensure safety and efficient railway operation. The harmonization of traffic control and signaling system is needed not only regional level but also domestic level in each member country. The study envisages the standardization or harmonization of railway design and traffic control as well as signaling system In order to make SKRL as a safe and efficient inter-state railway link.

3. Project Justification

The completion of the railway link between Singapore and Kunming in China via four ASEAN member countries, namely: Malaysia, Thailand, Cambodia, Lao PDR, Myanmar and Vietnam, is symbol of the close economic cooperation of ASEAN.

The missing links and spur lines along this important railway should be constructed to make the SKRL operational.

Through this Project, member countries have to equitably share the cost and benefit of the SKRL. It should also enable one or more entities to operate and manage the entire or a major part of the railway system. The managerial plan should prepared based on demand forecast, economic and financial viability studies.4. Implementation Modality

Consultancy services will be required for the Project. In line with the above specific goals, the Project will cover the consultancy services for the preparatory study to conduct necessary feasibility studies for each component of the Project. The consultancy services will also take into account the progress of implementation of the Asian Development Banks (ADB) priority projects concerned with railway transport development in the Greater Mekong Sub-region and CLMV. The Consultant is required to work closely with the ASEAN Mekong Basin Development Cooperation (AMBDC) Special Working Group for SKRL (Lead country is Myanmar in 2002) and the AMBDC Financial Expert Group (Lead country is Vietnam in 2002).

The preliminary Terms of Reference for the consulting services required for the Project is prepared as shown in Appendix 1.

5. Output of the Project

The primary output of the Project is the phased implementation program of the SKRL Project in CLMV. The implementation program will report on the technical, economic and financial feasibility of the entire route of the SKRL project, the recommended financing options, as well as the recommended implementation schedule, among others.

The Consultants will submit regular progress reports to the Special Working Group on the SKRL Project and STOM/ATM through the ASEAN Secretariat. A Final Report of the Project will be published after CLMV and concerned member countries have endorsed the Draft Final Report.

6. Implementation Arrangement

Each CLMV country will designate a team of key official(s) to work with the Consultants throughout the studies. The ASEAN Secretariat and the Special Working Group on the SKRL Project will coordinate the organization of relevant activities between CLMVs team and the Consultants. Such designated key official(s) will assist and work with the Consultants on railway transport in their respective jurisdictions. The Consultants shall submit to the ASEAN Secretariat regular progress reports for each phase, as well as the Draft Final Report and Final Report, for circulation to the member countries.

The Special Working Group on the SKRL Project will serve as the project management organization to conduct the feasibility study of the Project in coordination with the ASEAN Secretariat.

7. Budget Requirements

The estimated total cost for the Project is US$ 830,000, which should essentially cover the cost of consultancy services, data collection, field surveys, and the regional workshop as well as meetings. Each study will be conducted for six to nine months period. The breakdown of the cost is shown below.

A. Study of the economic and financial viability of the agreed SKRL route (US$ 387,000)

B. Study of the SKRL missing links and spur lines

(US$ 350,000)

C. Study of the harmonization of railway standards and traffic control system (US$ 93,000)

8. Risks

The cooperation and active participation of CLMV and related member countries will be essential.

TERMS OF REFERENCE

FORFeasibility Study

for the

SKRL Missing Links and Spur Lines

1. INTRODUCTION

Consultancy services will be required for the conduct of feasibility and engineering studies for the missing links and spur lines as well as improvement and upgrading works for the SKRL priority network consisting of Route 1 and part of Route 2, which covers Cambodia, Lao PDR, Myanmar, Vietnam and Thailand. Some 1,292 km of missing links and spur lines in these five countries will be subjected to further detailed studies, as follows:

Missing Links and Spur LinesCountry InvolvedDistance (km)

Phnom Penh Loc NinhCambodia286

Loc Ninh Ho Chi MinhVietnam149

Vientiane Thakkek Mu DaLao PDR466

Mu Da Tan ApVietnam53

Nam Tok Three Pagoda PassThailand153

Three Pagoda Pass - ThanbyuzayatMyanmar110

2. OBJECTIVES OF THE STUDY

The Project principally aims to complete feasibility studies for the missing links and spur lines of SLRL. As no study taken place for the Route 1 and a part of Route 2 after these were selected among alternative routes, the economic and financial viability of SKRL will be studied further in depth.

The objectives of the three study components are as follows:

A. Study of the economic and financial viability of agreed SKRL route

A-1To review and update all available existing studies concerned to SKRL project

A-2To conduct demand forecast for SKRL project

A-3To conduct economic and financial study on SKRL project

A-4To formulate implementation program of SKRL project

A-5To formulate operation plan including financial mechanism of SKRL project

B. Study of the SKRL missing links and spur lines

B-1To review all available existing studies concerned to SKRL project;

B-2To formulate indicative implementation program for the phased or staged construction of missing links and spur lines of SKRL project;

B-3 To formulate an indicative development program of SKRL project;

C. Study of the harmonization of railway standards

C-1To review all available existing studies concerned to SKRL project;

C-2To formulate program for the harmonization of design standards and traffic management system applied for the railway development and improvement project in CLMV; and

C-3To prepare the detailed Terms of Reference for the implementation of the harmonization program for the railway standards in CLMV countries.

3. STUDY LINESThe study lines are the agreed routes of SKRL project including the following missing links and spur lines:(1) Phnom Penh Ho Chi Minh via Loc Ninh in Cambodia and Vietnam;

(2) Ho Chi Minh Vung Tau in Vietnam;

(3) Vientiane Thakkek Mu Da Tan Ap in Lao PDR and Vietnam; and

(4) Three Pagoda Pass Thanbyuzayat in Myanmar

4. SCOPE OF WORKS

4.1 Review of Existing StudiesReview the feasibility study of SKRL project including its methodology; approach and basic assumptions used in these various available studies for the study lines

4.2 Demand Forecast

Conduct traffic projection on both freight and passengers on the section of SKRL.

4.3 Formulation of Rehabilitation Plan

Formulate rehabilitation plan of the existing lines to be connected by construction of the missing links and spur lines.

4.4 Supplemental SurveyUndertake necessary supplemental surveys and investigations for the conduct of a preliminary study on the construction of missing links and spur lines, rehabilitation of existing lines and prepare the operation as well as management plan.4.5 Alignment Study

Conduct alignment study on planned lines to eliminate missing lines taking into consideration such factors as costs, economic, social and environment impacts.

4.6 Evaluation

Conduct economic and financial studies on the construction of missing links and spur lines and rehabilitation of existing lines on preliminary feasibility basis.

4.7 Development Program

Prepare indicative development program for the phased or staged implementation for the construction of missing links and spur lines as well as the rehabilitation of existing lines including institutional development plans, as appropriate.

5. TIME SCHEDULE

5.1 Inception Report

Inception Report shall be prepared and submitted to the ASEAN Secretariat within one (1) month from the effective date of contract in Jakarta.

5.2 Interim Report

Interim Report, which presents the traffic forecast and preliminary engineering study as well as cost estimates, shall be submitted within two (2) months from the commencement of the Study.

5.3 Draft Final Report

Draft Final Report, which presents the result of the Study including the recommended technical details and preliminary cost estimates concerning the construction of missing links and spur lines as well as rehabilitation of existing lines shall be submitted within four (4) months from the date of notification by the ASEAN Secretariat of approval of Interim Report.

5.4 Final Report

Final Report shall be submitted within one (1) month after receipt of the comment on the Draft Final Report from the ASEAN Secretariat.6. Staffing Requirement

The expertise required for the Study and man-months for each expert for the Study are as follows:

A. Study of the economic and financial viability of agreed SKRL route;

1Railway Transport Planner4

2Demand Forecast Specialist4

3Railway Operation Analyst4

4Cost Estimator2

5Economic and Financial Analyst2

6Management Expert2

Total18

B. Study of the SKRL missing links and spur lines;

1Railway Engineer6

2Structural Design Engineer4

3Traffic Control System Expert4

4Cost Estimator2

Total16

C. Study of the harmonization of railway standards and traffic control system

1Railway Engineer2

2Traffic Control System Expert 2

Total4

7. Indicative Budget

(A) Study on the economic and financial viability of agreed SKRL route

ItemUnit PriceUnit (Month, Trip)Amount in US$

Consultants20,00018360,000

Air Freight1,2001012,000

Local Transport5,000

Other Expenses10,000

TotalUS$ 387,000

(A) Study on the SKRL missing links and spur lines

ItemUnit PriceUnit (Month, Trip)Amount in US$

Consultants20,00016320,000

Air Freight1,20067,200

Local Transport5,000

Other Expenses17,800

TotalUS$ 350,000

(C) Study on the harmonization of railway standards and traffic control system

ItemUnit PriceUnit (Month, Trip)Amount in US$

Consultants20,000480,000

Air Freight1,20044,800

Local Transport3,000

Other Expenses5,200

TotalUS$ 93,000

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