TASR – Teraz.sk, 11.7.2013 EN

Broad-gauge Railway May Bring More than 8,000 New Jobs to Slovakia

Bratislava, July 11 (TASR)

The extension of a broad-gauge railway line from Russia to Western Europe will affect the economies of the four countries through which it will probably be built (Austria, Slovakia, Ukraine and Russia) and could create more than 8,000 new jobs in Slovakia alone, TASR was told by advocate Jana Martinkova, who has been concerned with the project for years.
      "The freight terminal will be located not in Vienna, as often presented in the media, but most probably at the already existing industrial park in Kittsee or in Parndorf (both Burgenland state). This would be the cheapest option for Austria and the most favourable option for Slovakia in terms of economic, strategic and geo-political location," said Martinkova, citing Austrian sources.
      Martinkova observed that neither Vienna Airport nor the river harbour in the Austrian capital will be able to handle the mounting volume of haulage in 8-10 years.
      Placing the freight terminal in either Kittsee or in Parndorf will mean an easier link to the harbour and airport in Bratislava and to Slovakia's whole motorway and railway network. Such an economic area located between Bratislava and Vienna would serve as a centre for transport, know-how, technologies and co-operation between Europe, Russia and Asia.
      In addition, Martinkova denied claims that the broad-gauge railway could boost the unemployment rate in Slovakia and reduce Slovakia's economic potential. She argued that the project will help the country avoid economic isolation instead. If the railway weren't laid through Slovakia, the Russian and Asian market would find another route to Western Europe. Moreover, Slovakia can only benefit from the extent of the Russian and Asian markets in terms of its potential economic growth and the diversification of the country's production.
      "More than two-thirds of the added value in association with the planning, conception and the construction of the logistics centre will be passed on to Slovak entrepreneurs, not to mention the building of new terminals between Cierna nad Tisou (Kosice region) and Bratislava and new reloading sites in the border areas with the Czech Republic and with Hungary," said Martinkova.


Keywords: Exp-SR-Martinkova-broad-gauge-railway


P. Vinyaratn: Modern Railway Connection with Asia is Economic Opportunity for Europe
Hardly anyone can better fulfill the criteria for the title of gray eminence and visionary than 70-year old Thai economist, Pansak Vinyaratn. For more than a decade, he has been acting as the main advisor to the Thai prime ministers and is behind reforms and modernization of this Southeastern Asian country. In an exclusive interview with TASR as part of our multimedia series, Personalities: Faces, Ideas,  he said that he considers the key to be  small and mid-sized enterprises along with the construction of high-speed railways to connect this region with Central and Eastern Europe.
You have been the main advisor to the Thai prime ministers for more than a decade. How would you evaluate this period and how has the Thai economy reacted to the global economic crisis?
The most difficult challenge for me as an advisor to the government during the crisis was solving relationships with bureaucracy –how to convince the system and gain its trust for the implementation of reform policies. We are going through a period with lots of changes. Global pressure forces us to change our policies. Bureaucracy for us, and also everywhere else in the world, usually tries to grow and replicate itself. However, we need the system to be efficient. Concerning the situation in Thailand, we were lucky that during the last twenty years the situation in Europe and the USA was stable. Written on American banknotes are the words, “In God we trust. “  However, today it looks like God has abandoned them and the reference currency isn’t fulfilling the same function it did in the past. Therefore we have changed the structure of our currency reserves.
On behalf of the euro?
Yes, around of 15 to 20%. I believe that the euro is able to balance the decrease of value of our reserves in dollar.
Is the common currency currently fulfilling your expectations?
Unfortunately not and I´m sad about that. The problem with the banks in Europe has reduced the value of the euro.
Thailand  belongs to the world’s fast growing economies. What´s behind this development?
We import new technologies from Europe and from Japan and are able to produce more qualitative products. So we can react to demands from Europe and from fast-growing Asian economies.  Thanks to this, in the last period we have had an average of 6.8 percentage increases in gross domestic product (GDP) annually. We have 120 million USD on deposit in currency reserves. We have a reserve in the amount of 7 billion Baht in the commercial sphere, representing around 175 million Euros. Likewise, we have resources for liabilities and investments. Commercial banks in Thailand put these resources mostly in government bonds which have a better profit than bank deposits.

Other possibilities for increasing capital aren´t interesting?
Currently the most interesting is to invest in Thai government bonds. After all, investment bankers from Europe and the USA are also doing so.  Likewise, some Asian countries are holding on to their currency reserves. However, we don´t like to see this because the pressure on our currency is increasing this way. On the domestic market, domestic demand isn´t enough to keep the currency stable under this pressure. When the currency becomes stronger, export income decreases.
How do you compensate this?
With increasing investments in infrastructure, with reconstruction of existing structures and building new infrastructure. No one invested in it for decades. We have problems with traffic flow and this increases domestic economic costs.
Which part of the infrastructure do you concentrate on?
Mostly on reconstruction and building of new railways. We want to invest around 20 million USD in it, as well as a further million USD in reconstruction of old colonial railways and improvement of gauge railways, in order to use these railways for high-speed trains. Connections head from Bangkok towards the south, towards the border with Malaysia where they come together with railways heading towards Singapore. To the north is Laos where the tracks connect to the Chinese railway system. We are in talks with the Chinese about further use. Possibilities are great because the Chinese railway system is connected to Kazakhstan. Local railways connect to Russian, Belorussian and Ukrainian railways. And from there it’s only a jump to Central and Eastern Europe. These countries could have direct links for trade and contact with Thailand and Southeastern Asia. It also opens up possibilities for Slovakia to diversify its production, and its exports which might be interesting for the Asian market.
Isn´t it easier to transport these exports via sea or air freight?
For Central Europe surely not because it is landlocked. Thus naval transport is no option. The one option is rail and therefore it´s enough to build a broad-gauge railway which connects to the Russian railway system. Railway transport to Southeastern Asia might be a third faster than naval transport. If the Slovakian and Austrian railway system connects to the Russian one during the next seven years, it will become competitive and cheaper than air transport, particularly in case of transportation of small freight from smaller producers. It’s also a way to support exports of small- and middle-sized companies. The time of big producers is heading towards an end.
What is the public debt of Slovakia, for example?
More than 50% of GDP…
See and this is our common interest. To increase state’s incomes in order to decrease debt. New sources of incomes are in investments into railway infrastructure and into support of export.
The Slovakian economy is very open and export-oriented. However more than 85% of all exports are targeting the countries of the European Union. Exporters are searching for possibilities to enter other markets in order to decrease dependency. What are the perspectives for Southeastern Asia?
Railway connection between Central Europe and Bangkok will bring not only new export possibilities but also develop associate services. The youth and middle-aged generation of Southeastern Asia has a big interest in high-quality products from Europe, purchasing these mostly through the internet. It´s creating a strong demand and the route and speed of product delivery becomes an important question. This demand is a chance for small- and mid-sized exporters. I personally don´t believe in the future of big branches and huge companies.
Slovakia is currently battling high unemployment, around 14%. Which recipe would you recommend to the Slovakian government? Would it be investment in the infrastructure of highways and railways?
Railways surely yes, but not highways.
Highways promote uncontrollable consumption of energy and in turn, an increase in costs. High energy prices then weigh heavily on the economic “spine“ of the country -- the small and middle-sized enterprises. These comprise the nation’s future and their support, using the Thai economy as an example, is very important for the future. Small and mid-sized enterprises are able to create original products and brands and reduce dependence of global companies and global markets instead interface with global-local markets. This is also my recommendation for the Slovakian government. Develop small and mid-sized enterprises to brace against the failure of big companies and industries.

Which risks do you see in the project to construct a railway connection between Southeastern Asia and Central Europe?
There are none and do you know why? Because it´s about a long-lasting project with benefits lasting more than 40 years. However it will be important for Europe to invest in railways.  In contrast, Japan, China  and Russia, which are  key markets size-wise, have broad-gauged railway system.
Our interview with Pansak Vinyaratn is part of a multimedia series entitled Personalities: Faces, Ideas, brought to you by TASR every week in the form of interviews, photographs and videos of interesting people from Slovakia, Europe and the world, involved in the political, social, economic, sport and cultural life.