SRT gets nod to seek B11.5bn loans

SRT gets nod to seek B11.5bn loans

Rail agency to buy 50 new locomotives

The cabinet on Tuesday approved the State Railway of Thailand's (SRT) request to seek 11.5 billion baht in loans, plus an 800 million baht short-term overdraft, in the coming fiscal year, starting next month, to fix its liquidity problems.

Because the SRT continues to develop capacity and infrastructure, and serve the public while at the same time is required to keep its fares low, its operational losses continue to escalate, said government spokesman Anucha Burapachaisri.

The state enterprise is now critically in need of cash to resolve its severe liquidity problems, which could affect its train services or in the worst case scenario lead to these services grinding to a halt, he said.

As the 11.5 billion baht in loans will be spent primarily on resolving liquidity issues, the 800-million-baht overdraft will be used to pay off debts incurred in past procurement projects, he said.

The Finance Ministry will act as the guarantor for the SRT to ensure banks approve the SRT's loan applications, he said.

Though allowed to seek these loans, the SRT must strictly follow the rehabilitation plan imposed on it by the State Enterprise Policy Commission. The Transport Ministry is responsible for ensuring the SRT's compliance with the rehabilitation plan, he said.

In related news, the SRT recently signed a contract with SFR Joint Venture to purchase at a cost of 6.5 billion baht 50 diesel locomotives produced by CRRC Qishuyan Co, a leading Chinese locomotive maker, said an informed official source.

The company is required to deliver 50 new locomotives within 18 months, according to SRT governor Niruj Maneepun.

SFR is a joint venture between Sanfoco International Co and River Engineering Co, said the source.

On June 25, 2013, the SRT awarded a contract to Sanfoco International Co, known then as Pamaisanti Co, to supply the SRT with 20 locomotives at a cost of 3.3 billion, said the source.

These locomotives were also produced by CRRC Qishuyan Co, formerly known as CSR, said the source.

The SRT governor said that buying another 50 is to regenerate the business and service of the SRT. "The SRT has a lot of ageing rolling stock, some between 44 and 45 years old," he said.

With the the new locomotives, commuter trains can travel at 120kph and cargo trains at 70kph.

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