THURSDAY, March 28, 2024
nationthailand

BMA’s inability to pay Bt37bn debt at heart of standoff over Green Line

BMA’s inability to pay Bt37bn debt at heart of standoff over Green Line

The dispute over extension of concession for the railway Green Line stems from the city administration’s failure to honour its debt of Bt37 billion owed to the current concessionaire, according to sources in the know.

Disagreements over proposals by the Interior Ministry prompted seven ministers of ruling coalition-partner Bhumjaithai Party to boycott the weekly Cabinet meeting on Tuesday. Their strong reaction is seen as a key factor in forcing the Interior Ministry to withdraw the concession extension proposal from the Cabinet meeting on Tuesday.

A source from the Cabinet, who is familiar with the issue, said Tuesday was not the first time the Interior Ministry had to withdraw the matter from a Cabinet meeting. It had tabled and then withdrawn the matter from the Cabinet’s consideration six times in the past due to disputes over the concession extension and the maximum fare of Bt65.

The Bangkok Metropolitan Administration (BMA) owns the project and it gave the concession to the Bangkok Mass Transit System Plc (BTSC). The BMA is under the supervision of the Interior Ministry.

According to sources, the BMA had asked the Interior Ministry to request Cabinet approval for a 30-year extension, from 2029 to 2059, to adjust against its debt of Bt37 billion. Apart from seeking the extension, the BTSC also wants to raise its maximum fare to Bt65 to be able to shoulder the debt for the BMA.

Initially the BMA owed Bt32 billion to the BTSC for operation and maintenance costs after it hired the BTSC to operate the extended route from Poo Chao Saming Prai to Samut Prakan Housing Estate stations on December 6, 2018. Subsequently it extended the routes from Morchit station to Lat Phrao station on August 9, 2019 and from Lat Phrao station to Kukot station on December 16, 2020.

The debt comprises Bt12 billion for operation and maintenance costs and Bt20 billion for electrical and mechanical installation costs, including the signal system and electric trains. The debt rose to Bt37 billion because of accrued interest.

In August last year, the BTSC took the matter to the Central Administrative Court, asking the court to force the BMA to repay the debt. The court is yet to issue a ruling, allowing the BMA more time to prepare evidence to defend itself.

BMA Governor Asawin Kwanmuang said the extension of the concession was not the only choice before the city administration. He said the BMA had requested a national budget of Bt30 billion twice earlier for paying the debt but its request was not approved.

The BMA had also proposed that the Green Line and all the debt be transferred to the Mass Rapid Transit Authority of Thailand (MRTA) to manage but this idea also was rejected.

The debt disputes between the BMA and BTSC prompted the National Council for Peace and Order, which came to power after the 2014 coup, to issue an order on April 11, 2019 to set up a committee to negotiate with the concessionaire. The committee decided to extend the concession for BTS by 30 years.

However Bhumjaithai, which is in charge of the Transport Ministry, opposes that proposal.

Bhumjaithai has raised questions on whether the extension would violate the principle of the Act on joint venture between the state and private firms of BE 2562 (2019).

Bhumjaithai also disagreed with the maximum fare rate of Bt65, saying it would not be affordable to low-income commuters.

The party has also demanded clarifications on how the state would stand to gain the most from the extension.

The party also noted that the BMA is still under investigation by the National Anti-Corruption Commission for hiring the BTSC to operate the extended routes without calling for bids. It said the investigation should be completed first.

The long-delayed decision on the matter prompted the BTSC to issue a video clip and post messages on terminals on its Skytrain, reminding the BMA to honour its debt.

BMA’s inability to pay Bt37bn debt at heart of standoff over Green Line BTSC chairman and CEO Khiri Kanchanapas said in the clip that Prime Minister Prayut Chan-o-cha had promised after a Cabinet meeting on April 7 last year that his government would find a solution to the outstanding debt as soon as possible but nothing had happened so far.

Khi noted in the clip that there was only one step left, which was to put the matter to the Cabinet for consideration.

He urged the public to understand the burden the BTSC has to shoulder.

The BTSC also posted messages on its Skytrain terminals that the BMA had yet to honour its debt of Bt37 billion and the messages urged the prime minister to take action soon.

BMA’s inability to pay Bt37bn debt at heart of standoff over Green Line Speaking to reporters after the Cabinet meeting on Tuesday, Prayut insisted that the extension of the Green Line railway must be finalised at the next Cabinet meeting.

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