The Bangkok Mass Transit Authority (BMTA) has been given the green light to seek loans worth 7.5 billion baht to ensure its liquidity remains at an acceptable level, deputy government spokeswoman Traisuree Taisaranakul says.
The approval, which was granted by the cabinet on Monday, will allow the cash-strapped agency to seek loans in the next fiscal year, with the Finance Ministry acting as its guarantor. The Finance Ministry will also outline the conditions for the loans.
While the BMTA has been operating at a loss for years, it has not received assistance from the government to help shore up its financial position.
The BMTA is constantly in the red as bus fares -- which are capped by the government -- do not reflect its actual operating costs. It hasn't been able to increase its fares, as it is considered a state enterprise which provides an essential service to the public under existing laws. The agency, which is currently undergoing debt restructuring, owes 132 billion baht to its creditors. If the BMTA is unable to secure a loan to shore up its liquidity, it will end up with a budget deficit of 42 billion baht by the end of the next fiscal year.
The agency has managed to secure loans worth 35 billion baht through the government's public debt management scheme, which will be used to pay off loans taken in the preceding fiscal years.
However, it will still need to find 7.5 billion baht to ensure it can continue to operate. About 2.2 billion baht will go towards bus fuel, and around 1.4 billion baht will be used to fund fleet maintenance, the spokeswoman said.