BTS shares drop, BRT future uncertain after Chadchart victory

BTS shares drop, BRT future uncertain after Chadchart victory

BTS shares dropped on Monday due to concerns about the policy of incoming Bangkok Governor Chadchart Sittipunt on the Green Line concession. (Bangkok Post photo)
BTS shares dropped on Monday due to concerns about the policy of incoming Bangkok Governor Chadchart Sittipunt on the Green Line concession. (Bangkok Post photo)

Shares of Skytrain operator BTS Group Holdings Plc nosedived on Monday while the future of express bus operator BRT is hanging in the balance in the wake of Chadchart Sittipunt's victory in the Bangkok governor election.

BTS shares were down 25 satang - 2.78% - to close at 8.75 baht, whereas the SET index gained 12.33 points or 0.76% to end the day at 1,635.28.

Analysts said BTS share prices came under pressure because of the former transport minister's pre-election comments on the future of the Green Line.

Mr Chadchart easily won the gubernatorial election on Sunday with 1,386,215 votes - the largest ever share of the vote for governor. His votes surpassed those of MR Sukhumbhan Baripatra, who garnered 1,256,349 votes in the 2013 election.

The Green Line, including both the Silom and Sukhumvit lines, is operated by BTS on a 30-year concession signed with the Bangkok Metropolitan Administration (BMA). The contract ends in 2029.

The Interior Ministry is pushing for BTS to operate the route for 30 more years until 2059 in exchange for the debts incurred from the Green Line extension shouldered by the firm. The proposed extension also comes with a condition that fares must be capped at 65 baht.

But the coalition Bhumjaithai Party opposes the offer, claiming that it is too generous to the skytrain operator.

Bhumjaithai controls the Transport Ministry, while the Interior Ministry under the Palang Pracharath Party oversees the BMA.

Mr Chadchart's Green Line policy opposes the concession extension as he wants the BMA to control the operation, enabling City Hall to lower fares.

Mr Chadchart said during debates prior to the election on Sunday that the  maximum fare should be between 25 and 30 baht so that low-income people can afford the ride.

Extending the contract would mean the BMA waiting for 30 more years before it would control the line, he wrote on his campaign website. "This results in less chance for the BMA to reduce the fare, launch promotions that people need, use the profit from the concession to compensate for the extensions with fewer passengers to maintain the services, and collect one-time entrance fees," he added.

Boonyakorn Amornsank, an analyst at Pi Securities, said on its Facebook programme on Monday that the cancellation of the plan to give BTS 30 more years to run the Green Line would cost the listed firm 1.60 baht per share. The figure was calculated from the expected operating revenue during the period by the operator.

The Green Line is not the only mass transit line on the watchlist of the incoming governor.

Mr Chadchart has made clear that the future of the loss-ridden BRT is in his sights.

He said on his website that he is soliciting comments from Bangkok residents on the rapid bus system before making the decision on whether the project should be scrapped or allowed to continue.

The BMA will return the BRT lanes to all vehicle traffic if the scheme is cancelled, but will improve its fleet and services - including construction of more stations - if it continues to run, he added.

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