Transport vs Interior – what’s behind the battle over BTS concession extension?
While the Bhumjaithai Party claims it is protecting public interest by strongly opposing the extension of the Green Line railway concession, a source from the Interior Ministry alleges that the party is guided by ulterior motives.
Interior Minister Anupong Paochinda had to withdraw the matter from consideration by the Cabinet during its weekly meeting on Tuesday because all seven Bhumjaithai ministers, including party leader Anutin Charnvirakul and Transport Minister Saksayam Chidchob, boycotted the meeting.
While some sources said the Interior Ministry had tabled and withdrawn the matter from Cabinet meetings seven times, some said the withdrawal had happened just twice.
On Wednesday, Saksayam did not shy away from confirming that the seven Bhumjaithai ministers had boycotted the Cabinet meeting.
“The seven Bhumjaithai ministers clearly expressed their stand by not attending the Cabinet meeting. We disagree with the Interior Ministry’s proposal on extension of the Green Line railway concession when all proceedings have not been done legally yet,” Saksayam said.
“Our absence from the meeting clearly showed that we’re opposed to it. We didn’t want to attend the meeting to squabble and make news since we disagree with it anyway.”
The Green Line railway is owned by the Bangkok Metropolitan Administration (BMA) with the operator Bangkok Mass Transit System Plc (BTSC) being its concessionaire. The Interior Ministry supervises the BMA.
Saksayam insisted that the Transport Ministry is against the concession extension because the BMA has failed to complete several issues in line with legal principles and good governance.
But a source from the Interior Ministry insinuated that the Transport Ministry has other reasons for opposing the extension. The source alleged that the Transport Ministry is using the matter to pressure the BTSC to abandon its legal fight against the Mass Rapid Transit Authority of Thailand (MRTA) and to make it withdraw from bidding for the Orange Line railway project. The Transport Ministry supervises the MRTA.
The BTSC has sued the MRTA in the Central Administrative Court for compensation after an MRTA bidder selection committee changed the terms of reference (ToR) for bidding for the Orange Line project.
The BTSC also sued the MRTA for cancelling the first bidding of the Orange Line and filed a malfeasance lawsuit against the MRTA with the Criminal Court’s Corruption and Malfeasance Division.
On Wednesday, the Central Administrative Court ruled that the manner in which the ToR was changed was unlawful, but rejected the BTSC’s plea for compensation, saying it had not provided any evidence of incurring additional expenditure because of the change. The verdict, however, will justify the malfeasance lawsuit of the BTSC against the MRTA in the Criminal Court.
The Interior Ministry source backed his criticism of Bhumjaithai’s stance by pointing out that Saksayam was initially not opposed to the extension of the Green Line concession.
“When he took office in August 2019, he never expressed opposition to the amendment of the concession contract,” the source said.
“Moreover, he had replied to the Cabinet Secretariat three times that he agreed with the amendment of the contract between the BMA and the BTSC before the meeting of economic ministers on November 11, 2019.
The source said that after the MRTA held bidding for the Bt1.427-billion Orange Line railway project, the BTSC filed lawsuits against the MRTA governor and its committee that picks the bid winner.
“So, we believe that the transport minister came out to oppose the concession extension because he hopes that the prime minister would step in to negotiate with the BTSC to withdraw from bidding for the Orange Line project and withdraw all related lawsuits,” the source added.
The Interior Ministry had sought Cabinet approval for extension of the Green Line concession for 30 years, from 2029 to 2059, in exchange for the BTSC’s agreement to absorb some Bt100 billion debt that the BMA owes the concessionaire. The debt includes some Bt37 billion that the BMA owes after it hired the BTSC to operate three extended sections of the Green Line, plus accrued interest.
In exchange for the extension, the Interior Ministry noted, the BTSC has promised not to raise the maximum fare beyond Bt65 although it is allowed by the original contract to raise the maximum fare to Bt158 in due time.
The source added that if the Transport Ministry thought the Bt65 maximum fare was too high, it could have asked the BMA to conduct further negotiations by reducing the ratio of returns from the concessionaire in exchange for a lower fare.
A representative of the Transport Ministry, Pichet Kunathamrak, deputy director-general of the Rail Transport Department, argues that the extension of the Green Line concession will not give the highest benefits to the government and the people.
He argues that if the government takes over and runs the Green Line on its own for 30 years, it would receive revenue of Bt1,577 billion. After deducting projected expenditure of Bt1,109 billion, the government would net a profit of Bt467 billion. In comparison, if the concession were to be extended for 30 years, the government would earn only Bt32.69 billion, he said.
The Transport Ministry is backed in the dispute by the Thailand Consumer Council.
The council issued a statement that it is opposed to the maximum fare of Bt65. It called on the government to fix the maximum fare at Bt44 until the concession expires, and the government should then take over the railway operation and set the maximum fare at Bt25.