The state Railway of Thailand (SRT) plans to hand over three parts of its operations to the private sector, hoping that these will be its major income generators in the future.

Following the authority's latest rehabilitation plan, chief financial officer Arak Ratboriharn said the SRT would set up three wholly owned subsidiaries.

These would handle asset management, rail-route operations and logistics management.

"The plan is expected to be proposed to the Cabinet within the next two weeks," he said.

The asset-management firm will be responsible for SRT's land plots.

The second firm will be in charge of electric and suburban rail routes, including the Airport Rail Link project linking Suvarnabhumi Airport to inner Bangkok and the Red Line from Taling Chan to Bang Sue.

The third firm will manage logistics for freight between Bangkok and Laem Chabang Port in Chon Buri.

"For the three new companies, professional management will be hired and the operations will be outsourced to private companies instead of the SRT shifting some of its own officials to handle it," said Arak.

He said the subsidiaries would be more flexible in terms of management than the state-owned SRT, which must operate under the Public-Private Joint Venture Act.

"It's admitted that the SRT is not ready for operating either asset management or logistics management," said Arak, who added that hiring private specialists would help the authority to generate more income.

He said it was likely that Bangkok Mass Transit System and Bangkok Metro, operators of Bangkok's Skytrain and subway, respectively, would take charge of the SRT's rail routes.

Arak said the SRT had shouldered an accumulated debt of Bt46.19 billion, because of strategic, operational and financial problems.

About Bt13.41 billion of debt was derived from investment in infrastructure projects. A further Bt31.67 billion was incurred from pension payments to employees.

Arak suggested the government have a clear role in helping the SRT mitigate burdens by investing in infrastructure development for the authority.

For infrastructure maintenance and operations costing about Bt2 billion a year, the government should also help, he said.

Under the rehabilitation plan, the SRT expects to increase its revenue from asset rentals to Bt2 billion a year from the current Bt800 million.

Arak said Bt35.45 billion of debts would be transferred to the Finance Ministry, while rights for land rentals would be transferred to the Treasury Department in exchange for Bt4 billion. "This will help the SRT to reduce its debt burden," he said.

However, as planned, the SRT needs to invest Bt146.3 billion in infrastructure to increase efficiency and realise the potential of its network. "The government will also have to help invest in the project," Arak said.

Watcharapong Thongrung

The Nation