SRT woos logistics sector as fuel soars

SRT woos logistics sector as fuel soars

The State Railway of Thailand (SRT) is in talks with 10 logistics companies which have expressed an interest in making a complete switch to rail freight services and expects to help them complete the transition before the end of this year.

SRT governor Nirut Maneephan said interest in rail is growing due to a number of factors, but particularly the effect that skyrocketing fuel prices have had on their operations.

Together with the SRT's investments in double-track rail routes and new locomotives, transport companies have gained more confidence in rail freight services, he said.

Mr Nirut said the SRT has about 1,000 rolling stocks for cargo transport and plans to procure another 965 for an estimated cost of 2 billion baht to accommodate an expected increase in demand.

The SRT is conducting a cost-benefit analysis into three options relating to the scheme and will submit the findings to the Transport Ministry for consideration in July or August. The three options are leasing, purchasing or hiring to procure/operate.

Mr Nirut said the SRT currently provides freight services to 60 companies and expects to make between 1.5-2 billion baht this year with a volume of 12 million tonnes, a projected increase of 2% from last year.

During the first two quarters of the 2022 fiscal year (October to March this year), the agency has managed freight totalling 8.7-8.8 million tonnes with volumes expected to increase and meet the target.

A source in the SRT said the state-owned railway operator is bearing fuel costs as it pegs fees at 30 baht per litre for three months, from June to August, in line with the ministry's policy.

Currently, the price stands at 33 baht per litre.

The SRT will incur additional costs of two million baht each month for every baht that the oil price increases by, the source said, adding that the policy will be reviewed after three months.

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