SRT salaries at risk in October

"Our cash flow is enough to cover expenses for September," said SRT chief financial officer Arak Ratboriharn. "If the government delays a decision on the emergency injection, we will have no money left for salary payments, starting in October."

SRT has to pay Bt500 million to Bt600 million in salaries monthly. The agency hopes that the Cabinet will speed up its consideration of the emergency liquidity injection. The matter was submitted for Cabinet consideration two months ago, but so far the Cabinet has delayed making a decision.

Besides the emergency injection of Bt4.2 billion, SRT also requires the Cabinet's approval to increase its overdraft loan limit by approximately Bt800 million.

The agency believes that the emergency funding as well as the overdraft increase would be enough to cover expenses in the 2008 fiscal year including employees' salaries and interest expenses, said Arak.

Early this year, the Cabinet approved an injection of Bt4 billion for SRT. If the Cabinet approves the additional Bt4.2 billion, emergency funding this year will total more than Bt8 billion.

Arak said SRT faced losses due mainly to the increase in diesel prices, as the agency has not been able to adjust fares because that would affect the public. SRT expects to post losses of Bt9 billion this fiscal year, which will end in September.

SRT also provides a free rail service as one of the six government measures to help people cut living costs. However, the agency does not know how the government will subsidise the policy. SRT expects the government to pay the agency Bt40 million to Bt50 million per month. This service will not affect SRT's liquidity, Arak said.