Rail, water authorities likely to seek subsidies

State Enterprise Policy Office director-general Areepong Bhoocha-oom said at a seminar on PSO yesterday that by the end of this year, the SRT could file for Bt2 billion in subsidies to supplement third-class services running at a loss.

Each year, the third class carries 33 million passengers. The SRT has complained of losses as it has been unable to increase fares to cope with rising diesel prices. Now the Cabinet has proposed that third-class service be free for all passengers, as one of six relief measures considered in its stimulus package on Tuesday.

SRT chief financial officer Arak Ratboriharn said yesterday that the government's measure would increase the number of passengers by 15 per cent, or 5,000 a day.

"SRT is ready to serve the public under the measure," he said, adding that economy class train services are not fully utilised. During rush hour, only 70 per cent of space on urban routes is used while the provincial load factor is only 65 per cent.

Bangkok Mass Transit Authority, which provides bus services in Bangkok, may not take up the government subsidies as it is in the middle of leasing 6,000 buses.

According to Areepong, the PWA could also request a Bt1-billion annual subsidy for the provision of tap-water to rural areas.

"The Office should complete the estimates of PSO within the next one or two months for the Finance Minister's consideration and the Cabinet's approval," Areepong said. "So far, PSO has covered only non-financial state enterprises. If state subsidies are provided to financial state enterprises, it could lower the enterprises' financial risks and lead to more low-interest loans to low-income earners."

In his opening speech, deputy Finance permanent secretary Sathit Limpongpan said that PSO will bring greater transparency to the budget allocation. So far, the government has allocated subsidies on a case-by-case basis and state enterprises need to shoulder financial obligations. Under PSO, enterprises will be able to split the accounts for commercial services and public services, and the government has declared it will pay subsidies for the public services on an annual basis. Thailand will start using PSO in the 2010 budget year.

All state enterprises wanting to tap the subsidies must submit their requests to the State Enterprise Policy Office by the end of this year.