The Thai government’s plan to buy back the concessions of all electric train lines in an effort to make public transport more affordable is likely to be concluded by next year, officials say.
Fares capped at 20 baht per trip currently apply on sections of the Red and Purple mass-transit lines in the capital. The Ministry of Transport has pledged to apply the 20-baht fare on all lines by September of this year.
Doing so will require budgetary support from the government to subsidise operators for their losses while a longer-term solution is worked out.
The State Enterprise Policy Office (Sepo) is currently spearheading the committee responsible for reviewing the 20-baht fare project.
The committee, chaired by Finance Minister Pichai Chunhavajira, is expected to meet later this month, and will propose various approaches for repurchasing electric train lines from private operators.
These approaches will cover ownership, the projected value of the repurchase, and potential sources of funding, said to Tibordee Wattanakul, the Sepo director-general.
As for ownership after the concessions are bought, he said Sepo would propose the state become the sole owner to streamline management and allow for clearer direction. This approach has been used by several countries, including Singapore and Japan.
However, there may be opportunities for multiple private operators to compete to operate the train services, said Mr Tibordee.
He said the cost of repurchasing the concessions was initially estimated at 200 billion baht. It is expected to be financed by an infrastructure fund to sell investment units to the public.
The Ministry of Finance said a precedent was set with the Thailand Future Fund, which used proceeds from the offering of investment units to invest in state infrastructure assets with the potential to generate income for the fund.
According to Mr Tibordee, Sepo bases its valuation on the fact that concessions for key train lines, such as the Green Line, will expire in 2029, meaning there is not much time left for private sector operation. Therefore, the project’s value may not be particularly high.
In addition, some lines, particularly those on the city’s outskirts, have not performed well financially. As such, if the state steps in to purchase them, private operators would probably be receptive to a buyback, he said.