Revamped rail regulations to have big effect on SRT

The rail transport system, however, will probably be reformed, and that should be good for the economy, since the separation of regulation from operations will create a clear picture of the state’s policies for development of the railway network.

Many experts and academics wish to see the rail department set up in the hope that this will help all participants develop. 

Other parties such as part suppliers in the rail industry should also be targeted for government support so that they can become part of the world’s supply chain within the next decade.

By 2020, Thailand will need about 30,000 people to operate its rail system, which is expected to double in size to 8,000 kilometres in 2022. About 17,000 engineers and technicians will be needed, according to the Thailand Advanced Institute of Science and Technology. 

The budget for the 10-year transport development plan has been set at Bt1.9 trillion, of which more than half is for the railways, Transport Minister Prajin Juntong said recently. 

The Transport Ministry’s deadline for launching the department is June. 

The idea for the new department came after several meetings of state agencies as well as hearings to gather ideas for regulations that will shape the country’s rail-transport landscape.

According to the current military regime’s policy on rail development, creation of the department needs approval from the junta-appointed National Legislative Assembly. The needed legal amendments are being proposed to the NLA for consideration. 

 

New competition

Under the proposal, the rail department’s main duty will be regulating safety, pricing and quality. Its activities will be constructing railroads, promoting market competition, providing maintenance, licensing rail-route operations and managing the assets to be transferred by the SRT.

The SRT currently constructs railroads and manages the routing, making it both a regulator and operator. That also caused the agency to post a net loss of Bt13 billion this year, even though its operating loss was only Bt3.4 billion. Most of the loss was due to other expenses such as employee pension costs, depreciation and loan interest. The enterprise shoulders a huge debt of more than Bt100 billion, mostly derived from infrastructure investment.

If the new regulatory body were established, the SRT would become only an operator, managing the routing for inter-city railways.

Prajin expects the enterprise is ready to operate eight new routes of 1-metre-gauge railroads, under the country’s rail transport development plan for 2015-22.

However, SRT chairman Omsin Chiwapruek expressed concern over the assets to be transferred to the rail department, as that would affect some of the existing workers. This was because the salary base of state-owned enterprise SRT was higher than that of a government agency.

Under the new regulations, the rail operating licences for inter-city routes are likely to be opened to private companies besides the SRT. 

The licences for railways in the metropolitan area, which are mostly managed by BTS Group for the Green Line, MRT for the Blue Line and the SRT for the Airport Rail Link, may also be opened to others. 

Rail operators from Japan and Singapore recently expressed interest in the operating railways in this country. 

“If the government liberalises rail operations, the SRT should be given time with some kind of privileges to adjust so it can compete with others,” Omsin said.