Is a cheaper fare the solution to Bangkok’s Green Line standoff?

The ongoing conflict in the coalition government over whether to grant Bangkok Mass Transit System Plc (BTSC) extension of its BTS Skytrain concession has left many people frustrated.

There is also deep disappointment that the transport system, which was intended to make commuting for the average Bangkokian easier, is expensive.

The concession in question revolves around two routes — Mo Chit-On Nut, and National Stadium-Taksin Bridge. This core Green Line Skytrain covers 23.5 kilometers out of the total 68.25km BTS network, covering 60 stations and connecting Bangkok, Samut Prakan, and Pathum Thani provinces.

The Bangkok Metropolitan Administration (BMA) has invested in the extension sections and owes debts transferred from the Mass Rapid Transit Authority of Thailand (MRTA), which initially was in charge of constructing the extensions—Bearing to Kheha and Mo Chit to Khu Khot stations.

Coalition conflicts

Interior Minister General Anupong Paochinda has failed in his efforts over the past three years to push for an extension of the Green Line concession. The current concession expires in December 2029 and the Interior Ministry wants it extended for another 30 years, until 2059.

Bhumjaithai Party, which supervises the Transport Ministry, has opposed the move. Seven ministers from the party boycotted the Cabinet’s February 8 meeting that was scheduled to discuss and approve the concession proposal made by the BMA and its supervisor, the Interior Ministry.

The BMA and the Interior Ministry argue that extension of the concession will guarantee an affordable service, with a maximum fare capped at Bt65. The BMA will be able to transfer its liability, estimated to be about Bt130 billion, to the BTSC and also get Bt200 billion as revenue share.

The Bhumjaithai-led Transport Ministry has four questions for the BMA and the Interior Ministry:

➤ Does it comply with the Public-Private Partnership Act BE 2562 and Fiscal Responsibility Act BE 2561?

➤ Could the maximum fare be lower than Bt65?

 ➤ Could it be ensured that the government would not be at a disadvantage in relation to the concessionaire?

➤What about the questionable legal aspects of the BMA hiring the BTSC to operate train services and maintenance until 2042, 13 years after the core concession ends in 2029?

Backing from Democrat

Samart Ratchapolsitte, deputy leader of the Democrat Party, a coalition partner of the government, is backing the concession extension. He warned about the high debt the government would be saddled with if it did not extend the concession and instead opted to invite new bids in 2029 or 2042.

To be able to invite bids in 2029, the government would need to repay the BMA’s Bt37-billion debt owed to the BTSC, said Samart, a former deputy Bangkok governor. The debt was incurred from the installation cost of the train system and train operations on the extension sections of the Green Line.

Moreover, the government will have to pay more than Bt93 billion for the cost of operating the train services until 2029, the MRTA construction debt, and compensation to the BTS Mass Transit Growth Infrastructure Fund (BTSGIF), according to Samart.

The BMA cannot service its debt as it does not make a profit from passenger fares, Samart warned on his Facebook page.

The government also risks having a legal dispute with the BTSC, which has been hired by the BMA to operate the train service and maintenance until 2042. If the government opts to invite bids for the concession in 2042, the liability towards the BTSC and the BTSGIF would amount to Bt387 billion, according to Samart.

Skytrain concession extension put on hold following Bhumjaithai’s no-show

Academic up in arms 

Strong opposition to the concession extension also comes from academics.

Sumet Ongkitikul, a research director at Thailand Development Research Institute (TDRI), said more than an extension of the concession, he is worried about the high fare. “Under the concession extension proposal, the maximum fare of Bt65 remains relatively high,” he said.

The proposal also does not mention the common fare that would help passengers commute from one train line to another during daily trips at an affordable fare, he said.

“I am afraid the cost may rise to about Bt100 for a single trip if people have to ride two train lines between their homes and offices,” he said.

For example, when the Pink Line opens (scheduled in June), those who travel from Minburi to Siam Square by first taking the Pink Line and then connecting to the Green Line could be spending about Bt95 to Bt100 per trip. Such a high fare would be unaffordable for many people, he said.

“We have to stick to the purpose of the mass transit system; it was built to serve the masses, not just a few groups of people,” he added.

Usually, investment in an infrastructure project needs 30 years or more to break even or make a profit. If we want quick investment returns, it would make the fare too expensive, he said.

Consumers demand lower fare

Saree Ongsomwang, secretary-general of Thailand Consumers Council, does not agree with the proposal to extend the Green Line concession.

“The government has the time to negotiate with private companies in order to get a better deal. The proposed Bt65 maximum fare is too expensive, representing 19 percent of Bangkok’s daily minimum wage currently,” she said.

The fare should be Bt25 or as low as Bt20, or not exceed 10 percent of minimum wage, she suggested, adding, consumers are already faced with the high cost of oil prices.

“The mass transit train system could help reduce air pollution, especially particulate matter less than 2.5 micrometers in diameter. So it has a big impact on people living in Bangkok,” she said.

The government needs to think about many dimensions; it can choose to invite other companies to participate in a new round of bidding, or let the next Bangkok governor handle the issue, she added.

Clash of vested interests?

Mana Nimitmongkol, secretary-general of the Anti-Corruption Organization of Thailand, observed that over the past six years Thailand has seen a jump in public-private partnership investment. It is a good thing that governments could draw in private investment, reducing pressure on its tight revenue, he said.

“But the question is whether the cost of the projects is right. The government usually later concedes and allows private operators to raise service prices or extend concessions.

For example, the government extended the concession of the tollway elevated expressway project, but nobody really knows when the concession will end [a new administration could extend the concession],” he pointed out.

“The problem with the Green Line concession and an abrupt change in the bidding criteria of the Orange Line project suggest that rival private companies and political camps could not settle business interests through bargaining,” argued Mana.

“All the conditions for extending the Skytrain concession should be made public so that experts and other stakeholders could debate the pros and cons,” he suggested.

Meanwhile, some are speculating that the standoff between coalition partners may lead to big political change, but Titipol Phakdeewanich, dean of Ubon Ratchathani University’s Faculty of Political Science, said he did not think Bhumjaithai Party’s revolt would force Prayut to resign or dissolve Parliament before he completes his full term in March next year.

“It is just vested interests and bargaining for power as the next general election approaches,’’ said Titipol.

By Thai PBS World’s Business Desk

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