The Finance Ministry has won the nod to lease 497 rai of land in the Makkasan area for 99 years from the loss-ridden State Railway of Thailand (SRT) in exchange for clearing 61.8 billion baht of the latter's debt.
Kulit Sombatsiri, director of the State Enterprise Policy Office, said the State Enterprises Policy Commission or superboard chaired by Prime Minister Prayut Chan-o-cha yesterday approved the proposal as part of a Finance Ministry plan to clear some of the SRT's hefty debt.
The SRT is among seven financially troubled state enterprises required by the superboard to undertake a business rehabilitation plan.
The Finance Ministry intends to move 720 billion baht in debt from state enterprises' balance sheets to the government's own.
The ministry is drafting a bill to fiscalise state enterprise debt incurred under previous governments' policies and use the proceeds that arise from selling shareholdings in state enterprises to pay the debt.
Under the bill, the pay-off period for the debt will be lengthened to as much as 20 years to allow greater flexibility.
The Interior and Transport ministries must also amend laws to allow a rental period of 99 years, up from the current limit of 50.
The amendments are expected to conclude soon in order to speed up the process of transferring the Makkasan plot to the Finance Ministry within two years.
Mr Kulit said the SRT had about 100 billion baht worth of debt -- 85 billion owed by the SRT itself and the rest by SRT Electrified Train Co (SRTET), which runs the Airport Rail Link.SRTET is a subsidiary of the SRT.
The SRT is required to transfer its Makkasan land rights to the Finance Ministry before the Treasury Department opens bids for private companies to manage the 497-rai development, which will feature residential and commercial properties, a public park and a museum.
In the future, the SRT plans to generate revenue from other projects such as double-track railways, high-speed rail networks and rental fees from vast land plots upcountry.
The superboard has agreed to set up seven subcommittees to prepare a holding company for state-owned enterprises.
The subcommittees will be tasked with setting time frames for establishing company structures and manpower, while a law to enact the holding company will be proposed for cabinet approval this month.
Public hearings on the holding company have taken place, and state enterprise executives and unions have also agreed to the plan.