ADB, SRT disagree on how to fix rail system's woes
The Asian Development Bank and the State Railway of Thailand have clashed over how to restructure the debt-ridden SRT.
James Leather, an ADB transport specialist, has advised the government to assume responsibility of the SRT debt of Bt100 billion and set up a new entity to manage the state agency's infrastructure assets.
A State Railway Department should also be created under the Transport Ministry to oversee the SRT, he said. The government should also set up an independent body to regulate the safety of the railway system and determine rail-use charges, and should allow the private sector to take part in train operations.
Leather made these points yesterday at a seminar on the development of Thailand's rail system co-hosted by the ADB and the Finance and Transport ministries.
But SRT governor Prapat Chongsanguan said after the seminar that the ADB's suggestions, which would reduce the SRT's role, would not address root problems. He said everyone needed to be honest about the causes of his agency's chronic debt.
Prapat said that while the SRT fully understood its difficulties, it was not allowed to take part in the problem-solving process. Instead, other state authorities that do not have a deep understanding of the problems are responsible for solving them.
"Rail development has never been part of the national economic and social development plans at all. Cabinet resolutions have also prohibited the SRT from recruiting more staff. The SRT can borrow money but has to pay the interest on its own.
"Unlike the private sector, regulations have made it inefficient for SRT to manage its own assets. All of these are chronic problems, and they stem from government policies. I want to see the right policy direction."
Chula Sukmanop, director-general of the Office of Transport and Traffic Policy and Planning, said the Transport Ministry would brainstorm with the management of his office, the SRT, and the Mass Rapid Transit Authority to seek ways to restructure the railway agency.
He added that unlike other state transport agencies, the SRT had to do its own borrowing and bear the interest burden. One way to solve this problem is to establish a State Railway Department to assume the responsibility for rail-system investment while the SRT would focus on service operation for public and commercial purposes.
Transport Minister Chadchart Sittipunt yesterday said the government would allocate Bt1.5 trillion for SRT restructuring, part of which would focus on the upgrade and expansion of its track infrastructure as well the procurement of new locomotives and the revision of regulations to improve efficiency.
The government will finance 80 per cent of rail-system development, while the SRT will use revenue from rail-use fees to finance the rest. The government will also take care of SRT debt.
Finance Minister Kittirat Na-Ranong said after the seminar that the government plan to spend Bt2 trillion on infrastructure projects would raise the public debt to 50 per cent of gross domestic product. At this level the government can still maintain its fiscal discipline, he said.
Of the Bt2 trillion, Bt372.130 billion will be spent on the rail-system upgrade, and Bt753.105 billion on the high-speed-rail project.