Tackling BTS fares at root cause
Had it not been for the overwhelming opposition from all around, the BTS skytrain fares on the Sukhumvit Line would have risen to one-third of the country's minimum wage since February.
Thanks to public uproar and opposition from the Transport Ministry, the Bangkok Metropolitan Administration (BMA) decided to put off the fare hike for now.
One thing is certain, however. The relief for BTS riders is only temporary. Although City Hall, as the owner of the Sukhumvit or Green Line as it is also known, has shelved the plan to raise the fare ceiling from 65 to 104 baht, the fare hike will return to haunt us if the problematic concessions remain unresolved. The fact that the BTS operator is considering suing the City Hall over the incurred Green Line extension debt will inevitably exacerbate the problem.
Putting off the fare hike is no solution because the fares of all BTS routes, not only the Green Line, are far too expensive in comparison with the minimum wage. The skytrain fares will not go down unless their root causes are addressed.
The state concessions of BTS lines govern station entry fees, the ratio of non-ticket income for operators, and maximum fare ceilings. The problems arise when these specifics are not the same for different contracts.
In short, the crux of the problem is the government's lack of long-term and integrated planning to streamline the fares for all routes in the electric mass transit system.
At present, there are more than 10 skytrain concessions. Each concession has different fare rates, operation periods, and fare collection requisites. As a result, commuters have to pay multiple station entry fees when they change routes on their journeys.
The terms and conditions in these contracts have also made the exemption of station entry fees between different routes difficult. Also, the fare rates per station or kilometres are not the same for different BTS lines.
Subsequently, commuters have to pay multiple station entry fees between 14-16 baht when they change the routes apart from paying for the distance per kilometre.
Multiple station entry fees, as well as different terms and conditions in different contracts, are why the BTS skytrain tickets are unreasonably high.
Take the ride from Siam to Bang Yai station, for example. You start the journey on the Green Line at Siam but need to change the train twice to the Blue and Purple Lines, costing you 107 baht for the entire ride.
In response to public complaints, the station entry fees on the Blue and Purple Lines have currently been exempted, reducing the fares to 93 baht. Still, this fare amounts to one-fourth of the minimum wage in Bangkok and its satellite towns.
Besides, the fare calculation is not based on the real lifespan of the skytrain infrastructure which lasts decades but on the concession's period to determine the value of the skytrain project.
In other countries, the fares of the electric rail systems are subsidised by the earnings the operators get from commercial uses of space and land in their projects. The operators can make money from renting out space for advertisements and shops apart from profiting from the increase in land price around the skytrain stations.
In Thailand, however, the proportion of the operators' income from the commercial use of space and land is relatively small. Without enough additional earnings, the fares remain high as the operators' main source of income.
Setting the fare ceilings too high is another core problem that causes expensive fares. For example, the price ceiling of the Blue Line is the fare for the entire route of 12 stations. A large number of the Blue Line commuters, however, do not travel the entire route. When they disembark to connect with other skytrain lines, they probably have to pay more than the Blue Line's maximum fares.
A short-term solution to reduce the fares is to exempt station entry fees when connecting with different BTS lines. To do so, the government needs to review the concession and compensate the operators accordingly. The exemption for station entry fees for route connections should be the standard rule in future concessions. The maximum fare ceiling should also be reasonable and standardised for the whole BTS skytrain network system, not calculated separately as is the case now.
Of course, the government needs to do the hard work by negotiating with the skytrain operators for fair income-sharing that is acceptable for all parties. But the negotiation is necessary to make the fares the lowest possible for daily commuters.
For a mid-term solution, the government should revise the terms and conditions of the concessions for both old and new operators. The fare calculation should be a separate contract from the main concession to set a common fare table for all lines of electric trains.
Also, the revised concessions must require operators to earn additional income from other sources and include it as a base for the fare calculation.
To keep the fares of the electric mass railway system accessible to the public, the government should also provide subsidies to cap the ticket prices instead of allowing them to reach the maximum price ceilings.
The subsidies may come from the windfall tax through collecting higher taxes from the landowners around the skytrain stations because they benefit from business development there. Or the government should consider collecting congestion charges in the inner city areas, which will further motivate the public to use the mass transit system.
Importantly, the government should establish a central regulatory agency to oversee public transport fares and price ceilings. This agency should have the authority to set the income-sharing system between different skytrain operators according to the travel distance. To ensure transparency, this agency should consist of representatives from the public and private sectors as well as civil society organisations.
Apart from the problematic terms and conditions in the skytrain concessions, the hurdles faced by the mass transport network is rooted in Bangkok's miserable lack of city planning. The mass transport system must operate in an urban sprawl with complicated webs of small and winding alleys along the main roads which hinder easy access to the system.
The Bangkok Metropolitan Administration (BMA) is not of much help because it does not have integrated planning in city development to govern land use, unified public transport systems, and the urban sprawl adjacent to Bangkok.
Lastly, the fares of the BTS lines are expensive because government and City Hall are not accountable to the people. As a result, public interest is not their priority when setting fares for public transport.
In addition, the government's plan to grant the BTS operator a renewed 40-year concession in exchange for the debt transfer to the operator will put people at a disadvantage. This is a political issue that needs to be addressed with a long-term political solution.
When there is the political will to tackle the skytrain concessions, there is hope of bringing sky-high BTS skytrain fares back down to earth.
Sumet Ongkittikul, PhD, is a research director for Transportation and Logistics Policy, Natcha O-charoen is a researcher at the Thailand Development Research Institute (TDRI). Policy analyses from TDRI appear in the Bangkok Post on alternate Wednesdays.