State railway: No subsidies, must break even

State railway: No subsidies, must break even

With the state railway's red line over budget and far behind schedule, with plans to start service in 2020, the Finance Ministry is demanding that if operations loses money, they must be handed over to private company quickly.
With the state railway's red line over budget and far behind schedule, with plans to start service in 2020, the Finance Ministry is demanding that if operations loses money, they must be handed over to private company quickly.

State Railway must prove it can operate red line without losing money. What to do with Makkasan issue raised again.

TRANSPORTATION & STATE SUBSIDIES

State railway: No subsidies, must break even

Finance Ministry baulks at subsidy plan
30/01/2017
Wichit Chantanusornsiri

The Finance Ministry has brushed aside a State Railway of Thailand (SRT) request to receive subsidies for operating the Red Line electric railway, says a senior finance official.

The SRT had insisted that it should be the operator of the Red Line in a proposal submitted earlier to the Finance Ministry.

STATE RAILWAY: IF WE LOSE MONEY, YOU MUST GIVE US MORE MONEY

The SRT plan asked for help in guaranteeing 3 billion baht worth of loans that the SRT says it needs for working capital to operate the Red Line.

The SRT also asked for the condition that if after five years of operation the Red Line was still running at a loss, the Finance Minister would subsidise it with further capital of 5.6 billion baht.

WILL GET THREE YEARS TO SHOW IT CAN RUN RAILWAY WITHOUT LOSING MONEY

Amnuay Preemonwong, the deputy permanent finance secretary, said the conditions as stated were unreasonable.

He said that while the ministry would be willing to act as loan guarantor, the second condition of further subsidies was unacceptable.

Also, the SRT has just three years to prove its ability to run the new rail route profitably, Mr Amnuay said.

IF THEY CAN'T BREAK EVEN, MUST HAND IT OVER TO A PRIVATE COMPANY

The SRT has struggled with heavy debts for decades.

"If the SRT still insists on operating this line, it must agree to these conditions," Mr Amnuay said.

"After three years of operation, if they fail to operate it profitably, the SRT must give up the operational right to a private company."

Bang Son Commuter station on SRT Light Red Line (Source: Wikipedia)

WHERE WILL THE RED LINE GO?

The Red Line will consist of two lines (see here).

The Dark Red Line will run from Thammasat University's Rangsit campus to Maha Chai in Samut Sakhon province.

The Light Red Line will run from Salaya in Nakhon Pathom Province to Hua Mak in Bangkok.

Both lines will pass through Bang Sue Grand Station, the new main railway station for Bangkok that will act as a connecting hub for the MRT system.

It is also worth noting that the Red Lines run roughly along the route of the infamous failed Hopewell Project (see here & here).

Bang Sue Grand Railway Station under construction (Source: Wikipedia)

RED LINE: DECISION ON WHO WILL OPERATE YET TO BE MADE

The Red Line is a wholly owned investment of the Thai government.

Operations are scheduled to commence in 2020.

The government has yet to decide who will operate the project.

The SRT, a state enterprise, suffers from a lack of trust after years of burdening the government budget.

The ruins of the failed Hopewell mass transit project of decades ago, also known as "Bangkok Stonehenge" or the "Pillars of Shame".

STATE RAILWAY: AIRPORT RAIL LINK & OTHER BUSINESSES RUN AT A LOSS

The Airport Rail Link, an SRT project from the beginning, is currently run at a loss, in common with other businesses managed by the SRT.

"Given its [the SRT's] poor record, the ministry disagrees with leaving another huge investment in the SRT's hands, and we would prefer to see a private company operate" such projects, Mr Amnuay said.

Therefore, if the SRT insists on operating the Red Line, the Finance Ministry will put in writing that the enterprise has three years to prove itself -- and if it fails, it will forfeit the venture.

The massive Makkasan green area in downtown Bangkok. Many people want it developed into a park.

STATE RAILWAY CONTROLS HUGE AMOUNTS OF LAND

Then there is the issue of the huge amounts of land across Thailand that the State Railway controls.

Is this land being put to productive uses?

Does this land generate market-going rental rates for the government? Do people holding long-term leases of government land at low rates make big profits by sub-leasing it at the market rate? 

The SRT has a countrywide total of 39,000 rai of land in its possession, including 23,000 rai of vacant land.

Mr Amnuay said the Finance Ministry will have to consider whether it should set up a subsidiary to operate the SRT land bank.

The SRT holds as many as 15,000 land rental contracts, of which 50% are said to be invalid and contract renewal has not taken place.

The massive Makkasan green area in downtown Bangkok looking away from Airport Link Station.

497-RAI MAKKASAN GREEN AREA IN DOWNTOWN BANGKOK  

The huge Makkasan green area located smack in the center of downtown Bangkok is a quite a hot potatoe of an issue (see here).

On the one hand, many Bangkok residents would like to see it developed into a park that would add value to Bangkok as a whole for its residents and the millions of tourists that pass through Thailand every year.

They argue that yet another mall or shopping center will add little to Bangkok.

They call for public hearings and public participation in the decision-making regarding Makkasan, after all, they say, the public land ultimately belongs to the people who should decide what to do with it.

The Makkasan Green Area.

MAKKASAN COMMERCIAL DEVELOPMENT

On the other hand, there are commercial interests and government bureaucrats who are more concerned about putting the land to commercial and business uses and generating money for government coffers.

One issue between the Finance Ministry and the SRT is commercial development of one of the SRT's most valuable land banks, the 497-rai Makkasan property.

Mr Amnuay said the ministry will submit a development plan to the State Enterprise Policy Commission (superboard) for approval.

In addition, the ministry has insisted that revenue from the Makkasan project must be used to repay the SRT's enormous debt.

The ministry will not make a move on Makkasan without seeking advice from a professional real estate consultant to work out the details, he said.

http://www.bangkokpost.com/news/transport/1189297/srt-hits-resistance-on-red-line

http://www.bangkokpost.com/learning/work/850488/makkasan-green-areas-parks-or-malls

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Vocabulary

  • ability (noun): being able to do something - ความสามารถ
  • approval: agreement to do or accept something - ความเห็นชอบด้วย
  • argue: to give reasons why you think that something is right/wrong, true/not true, etc, especially to persuade people that you are right - ห้เหตุผล, อ้างเหตุผล
  • brushed aside: to refuse to accept something that some people think is important or true - ไม่สนใจ, ไม่แยแส
  • budget: an amount of money able to be spent on something - งบประมาณ
  • burden: to give somebody a duty, responsibility, etc. that causes worry, difficulty or hard work - เป็นภาระ
  • campus (noun): the buildings of a university, college or business and the land around them - พื้นที่ที่เป็นที่ตั้งของมหาวิทยาลัย
  • capital: a large amount of money that is invested or is used - ทุน, เงินทุน
  • commence: to start; to begin - เริ่มต้น, ตั้งต้น
  • commercial: for business purposes - เกี่ยวกับการค้า
  • commission: a group of people who have been formally chosen to discover information about a problem or examine the reasons why the problem exists - คณะกรรมการ, คณะกรรมาธิการ
  • condition: something that must be done before another thing can happen - เงื่อนไข
  • condition: something that must be true or must be done before another thing can happen - เงื่อนไข
  • conditions: the details of a contract that give the situation or "conditions" under which certain things happen -
  • connect: to join together two or more things - เชื่อมต่อ
  • consist of: to be made of or formed from something - ประกอบด้วย
  • debt (noun): an amount of money that you owe - หนี้, นี้สิน
  • decades: periods of ten years - เป็นสิบๆปี
  • decision-making: when a person what to do next , makes a decision - การตัดสินใจ
  • downtown: In the city - ในตัวเมือง
  • enormous: extremely large - มหาศาล
  • enterprise: an organisation, especially a business - กิจการ, บริษัท,อุตสาหกิจ,วิสาหกิจ
  • finance: to provide money for something - จัดหาเงินทุนให้
  • Finance Ministry (noun): the ministry in charge of managing the country's money - กระทรวงการคลัง
  • forfeit: to lose something or have something taken away from you because you have done something wrong - สูญเสียของจากการถูกปรั
  • further: more; additional - มากไปกว่านี้
  • guarantee: guaranteed loan; when someone such as a the government agrees to pay back your loan if you cannot pay it back -
  • guarantee (noun): a promise or certainty that something is correct, will be done or will happen - คำรับรอง, การประกัน
  • guarantor: a person who agrees to be responsible for somebody or for making sure that something happens or is done - ผู้ค้ำประกัน
  • hot potatoe: a controversial issue that is difficult to deal with and make a decision about -
  • hub: the central and most important part of a particular place or activity - จุดศูนย์กลาง, จุดรวม
  • huge: very large - ใหญ่โต
  • in common (phrase): shared, e.g., interests, experiences or other characteristics - มีบางสิ่งเหมือนกัน
  • infamous (adj): well known for something bad - เสียชื่อ, น่าอับอาย, น่าขายหน้
  • insist: to keep saying very firmly that something is true - ยืนกราน ยืนยัน
  • insist: to say very firmly that something must happen or must be done - ยืนกราน
  • invalid: not able to be used legally - เป็นโมฆะ
  • investment (noun): the act of investing money in something - การลงทุน
  • issue: a problem that needs to be considered - ประเด็น
  • lack of: when there is not enough of something - ขาด
  • link: a connection - การเชื่อมต่อ
  • loan: an amount of money that a person, business, or country borrows, especially from a bank - เงินกู้
  • ministry: a government department that has a particular area of responsibility - กระทรวง
  • official: someone with an important position in an organisation - เจ้าหน้าที่
  • operate: to carry out an activity like running a business - ดำเนินการ
  • operator (noun): a person or company that runs a business - ผู้ดำเนินกิจการทางธุรกิจ, ผู้ประกอบธุรกิจ
  • participation: to take part in or become involved in an activity - การมีส่วน
  • policy (noun): a set of plans or action agreed on by a government, political party, business, or other group - นโยบาย
  • poor record: poor performance in the past; lack of success in the past -
  • possession: having or owning something - การครอบครอง
  • prefer: to like or want more than anyone or anything else - ชอบมากกว่า
  • private: involving groups, businesses or industries that are not owned or controlled by the government - เอกชน
  • professional: a person who does a job that needs special training and a high level of education - ผู้เชี่ยวชาญในวิชาชีพ,ผู้มีวิชาชีพ
  • profitably (adv): making or likely to make money, i.e., earning more money than is spent on production or sales - อย่างได้กำไร, อย่างได้ผลประโยชน์
  • project: a planned piece of work that is designed to find information about something, to produce something new, or to improve something - โครงการ
  • property: a building or buildings and the surrounding land - อสังหาริมทรัพย์
  • proposal: a plan or suggestion for a group to consider - ข้อเสนอ
  • prove: to use facts, evidence, etc. to show that something is true - พิสูจน์
  • prove itself: show that it can be successful -
  • province: one of many divisions of the government of a country into smaller parts - จังหวัด
  • public: open to people in general - สาธารณะ
  • rail: the whole transportation system of trains connecting stations along rail tracks - รางรถไฟ, ระบบทางรถไฟ
  • railway: the whole transportation system of trains connecting stations along rail tracks - รางรถไฟ, ระบบทางรถไฟ
  • regarding: about ..... -
  • renewal (noun): a situation in which something is replaced, extended, improved or made more successful - การเริ่มใหม่, การต่ออายุ การเปลี่ยนใหม่
  • repay: to pay back the money that you have borrowed from somebody - จ่ายเงินคืน, ใช้เงินคืน
  • request: an act of asking for something in a formal or polite way - การขอร้อง
  • resident: a person who lives in a particular area - ผู้ที่อาศัยในท้องที่
  • right: a moral or legal claim to have or get something or to behave in a particular way - สิทธิ
  • route: the roads, paths, waterways, etc., used to go from one place to another - เส้นทาง
  • running (adj): continuing - อย่างต่อเนื่อง
  • scheduled: planned to happen at a particular time or day - ตามตารางเวลา
  • senior: with a high rank or position - อาวุโส
  • smack: to hit somebody with your open hand, usuallly making a loud noise and especially as a punishment - ตบเสียงดัง, ตีนเสียงดัง
  • state: government - รัฐบาล
  • state enterprise: a company or business owned and managed by the government - รัฐวิสาหกิจ
  • struggle: to try hard to do something that you find very difficult - พยายาม, ประสบปัญหา, ต่อสู้กับปัญหา
  • submit: to formally give something to someone so that can make a decision about it - ยื่น (เอกสาร) เพื่อการพิจารณา
  • submitted (verb): formally given to someone, usually, but not always, so that they can make a decision about it - ยื่น
  • subsidiary: (of a business company) owned or controlled by another company - บริษัทในเครือ
  • subsidy: an amount of money that a government or organisation pays to help to reduce the cost of a product or service - เงินชดเชยที่รัฐเป็นผู้จ่ายให้
  • trust: a feeling of confidence in someone that shows you believe they are honest, fair, and reliable - ความเชื่อใจ, ความไว้วางใจ
  • ultimately: finally, after a series of things have happened - ท้ายที่สุด, ตอนสุดท้าย, ในที่สุด
  • unacceptable: that you cannot accept, allow or approve of - ซึ่งไม่สามารถยอมรับได้
  • vacant: empty - ที่ว่างลง
  • value: how much something is worth in money or other goods for which it can be exchanged - มูลค่า
  • venture: a new activity, usually in business, which involves risk or uncertainty - ธุริกิจเสี่ยงแต่สามารถทำกำไรได้
  • whole (adjective): all of something - ทั้งหมด
  • wholly (adv): completely - ทั้งหมด, ทั้งสิ้น, เต็มที่
  • working capital (noun): the money and stocks of goods that are used to run a business from day to day, to pay employees and produce and sell more goods - เงินหมุนเวียน; เงินทุนหมุนเวียน; เงินทุนระยะสั้น
  • worth: having a value in money, etc - มีค่า, มีมูลค่า
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