The State Railway of Thailand (SRT) will take delivery of 115 new air-conditioned carriages starting next year as it plans to woo passengers from buses and low-cost airlines.
Soithip Traisuth, the permanent secretary for the Transport Ministry, signed a contract on Friday with BBC Joint Venture for 115 Chinese-made sleeping cars worth 4.66 billion baht.
The consortium comprising Khao Lak Bamboo Orchid, Ruamit Mining and China Railway Construction will deliver 26 carriages by August next year and the rest by the end of 2016.
Viroj Triempongphan, the SRT deputy governor, said the state agency hoped the new cars would improve services and make rail travel more attractive to travellers as it is competing with inter-provincial buses and airlines.
The carriage deal was approved by the cabinet of the former Democrat-led government in 2010.
The SRT will also take delivery of two new Chinese-made engines by the end of this year and 18 more by June 2015.
With the new passenger cars, the SRT will increase top-up fees for the first- and second-class passengers by 15% in 2016 at the earliest.
Passengers riding in the two classes will have to pay more to reflect the better services, Mr Viroj said.
The SRT can increase top-up charges on its own but base fare adjustments need approval from the Transport Ministry and then the cabinet.
The hugely indebted railway agency has imposed additional charges such as fees for express and rapid trains and for sleeping berths to bring in more revenue.
Successive governments have been unwilling to increase train fares for fear of losing popularity among voters.
The SRT has been in the red since 1987, with accumulated losses exceeding 70 billion baht. The losses stem from huge pension obligations as well as government mandates to keep fares low or even free. As a result, it has been unable to invest in new rolling stock, and track maintenance has also suffered.