Private sector backs rail department idea

"Thailand has to escalate the improvement of rail transport to develop its logistics linkage to other Asean countries and southern China," Krirkkla Sondhimas said at a seminar on the success and failure of Thai state enterprises, held by the Economic Reporters Association yesterday.

He added that better rail links would also benefit tourism.

Krirkkla said the railway system improvement plan should be aimed at achieving its goals in 10 years rather than the 30 years previously discussed. He said the establishment of a Railway Department would help the government allocate the budget for railway improvement.

"Meanwhile, the railway operation business should be open to the private sector. Competition would result in a higher quality of services," said Krirkkla. He said some routes could be operated by a state agency and others by the private sector. "We believe that doing this model will help increase the number of rail routes nationwide. Railway services are now available in only 46 out of 76 provinces."

Krirkkla said road, sea and air transport all carried more cargo than the railroads because they were more reliable. This meant the Bt10-billion subsidy a year the government gave to the State Railway of Thailand was for passengers.

He suggested that the SRT workers union could protect their rights but said they should not make passengers suffer. When they plan to stop services they should inform the public.

Assoc Professor Sungsidh Piriyarangsan, director of the doctorate project at Chandrakasem Rajabhat University, said state enterprises were an important part of the country's economic system in terms of employment, cost efficiency and investment from the private sector. The 58 state enterprises have 260,000 employees with Bt3.5 trillion in income, he said. The enterprises have assets of Bt7.3 trillion with combined investment value of Bt400 billion a year.

In term of earnings, Sungsidh said they had dropped from Bt163 billion in 2007 to Bt100 billion in 2008. Of the state enterprises, 11 generated a total loss of Bt50 billion last year. He also said that a few of the enterprises - the Electricity Generating Authority of Thailand, PTT, the Metropolitan Waterworks Authority and the Metropolitan Electricity Authority - were accepted in terms of good governance.

As a result, he said, some enterprises with less efficient management had often been exploited to seek benefits via procurement processes.

He said if there were leakage in the procurement process of only 10 per cent of total procurement value, this would make the investment budget leak up to Bt40 billion.

He proposed that a greater number of the directors of each enterprise should be independent, representing up to 50 per cent of the board directors.