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Published on November 1, 2007

Energy Minister Piyasvasti Amranand yesterday said that in the first year the Transport Ministry would be allocated Bt8.7 billion, and Bt15 billion in each of the subsequent years. Sixty per cent of the proceeds will go to the rail network in Bangkok and peripheral provinces. The rest will be used to develop double rail tracks in provinces, to increase the efficiency of transportation of passengers and goods.

After meeting with Deputy Finance Minister Sommai Phasee and Deputy Transport Minister Sansern Wongcha-um, Piyasvasti said it had been agreed that contributions to the Oil Fund would be used to finance the improvement of the rail network. However, as the Oil Fund is barred by law from financing the construction, the funds would be raised through the Energy Conser-vation Fund - also under the supervision of the Energy Ministry.

The proceeds could be raised as the Oil Fund will immediately cut the mandatory contribution from retailers by 50 satang per litre after all its Bt85 billion of debt is cleared, paving the way for a cut in retail oil prices. Another 50 satang will be saved in the Oil Fund's coffers for emergencies, while the rest will be used to finance the rail-network construction.

At present, oil retailers have to contribute Bt1.50 from every litre of diesel sold, 70 satang on biodiesel, Bt4 on 95-octane petrol, Bt3.70 on 91-octane petrol, 70 satang on gasohol 95 and 20 satang on gasohol 91.

"Channelling the funds to rail development would cut oil imports, and the benefits are greater than having the Oil Fund keep the contribution idle. The proceeds would be loaned and state agencies carrying out the projects would return the money later," Piyasvasti said.

It was also agreed that all rail construction projects must win approval from the National Economic and Social Development Board.

The Nation