Deputy Transport Minister Pichit Akarathit yesterday called on the State Railway of Thailand (SRT) to accelerate reform plans and look to quadruple its revenue to at least 10 billion baht a year.
The SRT is expected to generate about 10 billion baht of annual income with the help of an assets management company to be set up in the next three months, Mr Pichit said.
Although all the new company's shares will be held by the SRT, the new firm will adopt a corporate-management style that affords working flexibility in managing the SRT's substantial assets, especially the almost 40,000 rai of land left almost unused along railway tracks, he said.
Currently, the SRT generates about three billion baht of its annual income from this land, regarded as low-yield assets as they generate only a 1% return rate, he said.
Other state enterprises in the same transport cluster as the SRT could achieve between 4% and 5% in asset management returns, he said.
The deputy minister said he was optimistic the new SRT asset management plan should help bring in three to four times more income than at present, adding he believes the SRT will see a rise in income over the next year and further improvements in the near term.
In about two years, the SRT should see clear potential to be able to write off its 100 billion baht debt, he said.
"We are heavily in debt and need efficient debt restructuring," he said.
A much higher revenue target is needed to beat the 7.5 billion baht in annual losses which the SRT faces in its train service operation, he said.
The Airport Rail Link service, meanwhile, incurs about 280-300 million baht in annual losses, he said.
The SRT's reform plan is expected to be in line with the government's policy to encourage a shift from cargo transport by road to freight transport by rail using the SRT's dual-track rail system, he said.
This way, the SRT will serve as a key mechanism to support Thailand in becoming a logistics hub for the Eastern Economic Corridor, the government's flagship project to spur more investment in the country and the region, he said.
A detailed SRT reform plan is expected in a fortnight and an SRT team will be set up to work with a Tansport Ministry team to implement it, he said.