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Rehab plans for state agencies backed

May 28. 2018
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THE TRANSPORT Ministry has voiced its support for the rehabilitation plans for Thai Airways International Plc (THAI), the State Railway of Thailand (SRT) and Bangkok Mass Transit Authority (BMTA).

Deputy Transport Minister Pailin Chuchottaworn said the ministry has proposed that the plans for the three agencies be submitted to the State Enterprise Policy Commission, adding that he was confident that the plans would gain approval when the commission meets on July 30.

The commission meeting will be chaired by Prime Minister Prayut Chan-o-cha.

He said that THAI's rehabilitation plan has been carried out in thorough detail and specifies the responsible people to oversee it and clear evaluation criteria through key performance indicators. The company's goal focuses on reducing the variety of aircraft types, similar to the business plans of low-cost airlines, as a way to reduce maintenance costs and mitigate risks if unused aircraft are sold.

"The main cost reduction for THAI is the focus on the reduction in diversity of the aircraft due to relatively high maintenance costs as a result of diverse spare parts,” Pailin said. “For example, the types of aircraft used had been eight and this number may be lowered to five or six. Therefore, THAI may need to accelerate sales of their unused aircraft.”

If THAI were to ask for approval to purchase more aircraft, the planned purchase must be for existing types of current aircraft and such purchases must be for the replacement of those decommissioned first, he said. “Any future purchases for expansion will be considered by the management,” Pailin said.

THAI must find opportunities for non-core businesses - extending from transport and catering to a maintenance, repair and overhaul centre - to generate income aside from its aviation services, the deputy minister said.

The company's marketing team has to work proactively to achieve measurable results, Pailin said. THAI's asset management unit is also required to appraise unused assets and market them for income and cost management.

Cost cuts under way

Parts of THAI's rehabilitation plan has been implemented. For example, THAI has moved its subsidiaries' offices into its headquarters to lower management costs and has sold office buildings in the country and overseas. Reportedly, THAI has sold a decommissioned Airbus 340.

Usanee Sangsingkeo, acting president of THAI, said that THAI's revised rehabilitation plan has focused on strengthening business operations and some of these elements have been executed.

Pailin said that in regard to SRT's rehabilitation plan, the agency’s goal is to become the largest railway state enterprise in Asean, and this would position Thailand as the centre for a rail system that would be the largest in Asean by 2027,

He said the SRT board is strong and is steering the organisation towards its targets in several areas, including the development of double-track railways and non-core businesses.

In 2027, on expectation of income growth from asset management and more cost management, SRT targets profits of over Bt20 billion. This would cut its net loss to Bt8.8 billion. In 2017, the state enterprise suffered a loss Bt17 billion.

Pailin said that BMTA's rehabilitation plan will hinge on cost reductions, organisational restructuring and consistent income generation. If the plan gains the commission's approval, the next step is to procure, through rent and purchase, about 2,700 hybrid-engine public buses to upgrade BMTA's services.

The Cabinet in a meeting yesterday also gave the green light to a budget for annual expenditure Bt3 trillion in fiscal 2019, up 3.4 per cent - or Bt100 billion - from the previous fiscal year. Annual revenue is projected to reach Bt2.55 trillion, up 4.1 per cent, or Bt100 billion. 

Overall, the national budget will face a deficit of Bt450 billion.

The cabinet also approves a budget deficit plan till 2022 in order to drive the country’s economy towards growth of 3.5 per cent and 4.5 per cent a year. 

In the same meeting, the Cabinet approved an extension to the timeframe for the disabled and bed-ridden patients to register for benefits until June 30. 


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