Bangkok Council Urges Swift Payment of Green Line Rail Debt Amid Interest Rate Fears

Bangkok's Metropolitan Administration (BMA) is under pressure to urgently settle outstanding debts with the operator of the city's Green Line Skytrain, Bangkok Mass Transit System Plc (BTSC), following a critical report from a city council committee. 

The committee's study on the mass transit system concluded that City Hall should expedite payments, citing a Supreme Administrative Court ruling and the rapidly escalating daily interest charges.

Bangkok Governor Chadchart Sittipunt acknowledged the findings, stating he would review the report and consult with the relevant legal counsel.

While the second portion of the debt remains under consideration by the Administrative Court, the Governor recognised the urgency to mitigate the 5.4 million baht daily interest burden. 

He assured that all proposals would be carefully considered before any action is taken, noting that the BMA has already sought advice from the public prosecutor and is awaiting their response.

The initial plan for repaying BTSC involves a phased approach, with instalments based on the debt amount currently before the Administrative Court.

Chadchart emphasised that this requires collaboration between the executive and legislative branches of the BMA, but affirmed his commitment to accelerating the process.
 

Asked if the payments could be completed by the end of April 2025, the Governor stated that this was contingent on the public prosecutor's feedback, but expressed optimism for progress on debt settlement, paving the way for subsequent negotiations with the private operator.

Napapon Jirakul, a Bangkok councillor for Bangkok Noi district and chairman of the ad-hoc committee responsible for the Green Line study, emphasised that swift repayment would be in the BMA's best interest, freeing up funds currently being absorbed by the substantial daily interest charges for other vital city development projects.

Dismissing Bangkok Thanakom (KT)'s continued legal challenge on the same grounds, the committee believes the Supreme Administrative Court has already comprehensively addressed all relevant issues. 

They anticipate a similar ruling in the second case, arguing that further delays while awaiting a potentially lengthy legal process would only exacerbate the BMA's financial burden, with interest accruing at approximately 8% per annum (MLR+1).

"One viable option would be for the BMA to utilise the difference in operating costs to pay down the debt owed to the private sector, thereby reducing the interest. However, our checks indicate that no payments have been made to BTSC in the last three months," Napapon pointed out.
 

He further suggested that the Governor should establish a working group to negotiate directly with BTSC regarding the outstanding debt and interest rate, exploring possibilities for reduction or a temporary freeze on interest accrual. 

This would provide a clear financial figure for future budget approval requests. While the Governor agreed on the principle of repaying BTSC, he stressed the need for thorough consultation with the legal team and the Attorney General's Office before proceeding.

Napapon intends to hold further discussions with the Governor on this matter shortly.

The outstanding payments owed by the BMA and KT to BTSC for operating and maintenance (O&M) of the Green Line are categorised as follows:

Debt Lot 2: O&M costs for the Green Line Extensions 1 and 2 (June 2021 - October 2022): 12,245 million baht – comprising 10,127 million baht principal and 2,118 million baht interest.

Debt Lot 3: Outstanding O&M costs for the Green Line Extensions 1 and 2 (November 2022 - December 2024): Over 17,121 million baht  – comprising 15,857 million baht principal  and 1,264 million baht interest.

Debt Lot 4: Estimated O&M costs for the Green Line Extensions 1 and 2 (January 1, 2025 - concession expiry): Payable to BTSC by the 20th of each month (initial forecast for January - December 2025 is 8,761 million baht).