Deteriorating relations between Thailand and Cambodia have brought the fate of the eastern line of the proposed Trans-Asian railway which would link Kunming with Singapore into doubt, according to a Phnom Penh Post report citing Thai and Cambodian sources.

A six-kilometer section of track that would link Aranyaphrathet in Thailand with Sisophon in Cambodia may not be built, which would be a major blow to the 5,300 kilometer regional rail network. It is this section that would act as a linchpin, connecting all existing railway networks in the vicinity.

The never-easy relationship between Thailand and Cambodia has become increasingly tense in recent weeks.

In November Cambodian Prime Minister Hun Sen angered the current Thai government by offering deposed Thai leader Thaksin Shinawatra a home and an economic advisor post in the Cambodian government after refusing an extradition request by Bangkok, where he is supposed to serve two years in prison for corruption. The Thai government under Prime Minister Abhisit Vejjajiva has interpreted this as criticism of its judicial system.

Since Cambodia's refusal to extradite Shinawatra, both countries have recalled their ambassadors from each other's capitals and a Thai citizen has been arrested in Cambodia for spying.

This is the lowest point in relations between the two countries since Shinawatra's days in power in 2003, when rumors that a Thai actress had claimed that Cambodian icon Angkor Wat belonged to Thailand resulted in mob violence aimed at the Thai embassy and Thai-owned businesses in Phnom Penh.

One day later the Cambodian embassy was damaged in an attack by a crowd in Bangkok. Diplomatic relations between the countries were suspended for three months afterward.

Adding to the drama is the fact that Shinawatra still holds much influence on the Thai side of the border, where he is still popular in rural regions. On top of that, consummate political survivor Hun Sen, who has been a mainstay of Cambodian politics since the days of the Khmer Rouge, is much more adept at political brinkmanship than Thailand's Vejjajiva.

There has been no word from Bangkok or Phnom Penh that either country has decided to scrap plans for the Aranyaprathet-Sisophon link. Were one country to withdraw from the plan, the rail link between Cambodia and Vietnam – and the rest of the rail network – would become unviable to governments and lenders, according to experts familiar with the project.

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