BTS group infrastructure fund back

BTS Group Holdings looks to have cleared the way for a brighter future, with the green light to go ahead with its infrastructure fund and a possible rise in Skytrain fares.

The Department of Special Investigation (DSI) yesterday |ruled that a BTS Group charge levied on its subsidiary, Sky-|train operator Bangkok Mass Transit System (BTS), had nothing to do with the assets that would be used to support the planned BTS Rail Mass Transit Growth Infrastructure Fund (BTSGIF).

The charge relates to a contract dated May 3, 2012, under which the Bangkok Metropolitan Adminis-tration, through Krungthep Thanakom, hired BTS to run the rail operating system and provide maintenance and ticketing services for existing lines after the concession expires, and for the three extended Skytrain lines.

The Securities and Exchange Commission (SEC) recently asked the DSI to rule whether this had anything to do with the assets to back the BTSGIF, a fund estimated to be worth about Bt60 billion.

DSI chief Tarit Pengdit said yesterday that after two weeks of reviewing the matter, his agency had decided that the two matters were not connected. The decision was sent to the SEC on Tuesday.

Surapong Laoha-Unya, chief operating officer of BTS and also executive director of BTS Group Holdings, said the group stood ready to launch the initial public offering for BTSGIF as soon as it received the SEC's endorsement of the issuance.

Upon approval, BTS will conduct a roadshow to potential investors in the United States, the United Kingdom, Hong Kong and Singapore.

Meanwhile, the company plans to raise Skytrain fares, which have been frozen since 2005, Surapong said.

The current fares of Bt15-Bt40 remain 25 per cent lower than the Bt18-Bt51 ceiling set under the concession contract.

If approved, the new fares will take effect in April or June. The company's previous attempt to raise fares was rejected.

HIGHER COSTS

Surapong said an increase was necessary given rising costs, especially resulting from the rise in the national minimum wage and electricity bills. Wages, electricity and maintenance costs account for 70-80 per cent of operating costs, he added.

Revenue will rise as a result of a fare increase, he said, but the final plan is yet to be submitted to the board of directors.

BTS's 2012 revenue will be announced after its fiscal year ends in March. While the number of Skytrain passenger-trips last year was in line with the targeted increase to 196 million journeys, revenue for the year is expected to show stronger growth.

In a separate matter, Bangkok Smartcard System, a joint business unit of BTS Group and Bangkok Bank, yesterday launched a co-branded debit card called the B-First Smart Rabbit and a Bangkok Bank Rabbit credit card.

Bangkok Bank targets about 250,000 of the cards being issued in the first 12 months.