Posted: 19/12/2006 8:56 pm Post subject: SRT Debt Restructuring
Board approves debt restructuring
Amornrat Mahitirook - Bangkok Post 19/12/06
The board of the State Railway of Thailand yesterday approved a restructuring plan in which the government will have to absorb 37 billion of the SRT's total debt of 42 billion baht.
Siwa Saengmanee, chairman of the SRT board, said the government would take over the SRT's debt of 37 billion baht, accumulated by operational losses and investments in the railway system.
The SRT would be left with debt totalling 5.7 billion baht, which would be cleared by the government in the future.
Under the restructuring plan, the SRT will have to set up three business subsidiaries _an asset-management company, an eastern cargo transportation firm and an electric train management company.
The plan, which is aimed at resolving the SRT's operational losses within one to two years, is expected to be submitted to the Transport Ministry next week.
The SRT board chairman said the Finance and Transport ministries and relevant agencies jointly worked out the plan to reduce the SRT's debt burden that required the state to pay 37 billion baht of its debts. This included payments for the agency's accumulated losses of 18 billion baht, investments in the railway system worth 15 billion baht and another four-billion-baht payment in return for ownership of SRT land that has been rented by government agencies.
A steering committee will be set up to follow up on the debt restructuring.
The committee, which will comprise the permanent secretaries for Finance and Transport, the Budget Bureau, the Office of Transport and Traffic Policy and Planning and representatives from the private sector, will evaluate the SRT's work every six months, said Mr Siwa.
After undergoing its debt restructuring, the SRT will have to suffer operational losses of three billion baht a year, mainly from its services to the public. The government will be asked to provide a subsidy of 1.6 billion baht a year to the agency to help absorb its losses. The SRT will be left with losses of 1.4 billion baht.
Mr Siwa said the board planned to develop the SRT's services to increase revenues.
As part of the short-term plan, the SRT will focus on cargo transport services to boost its income. It will invest in rail network expansion and launch more pro-active marketing campaigns.
The SRT's income is expected to be increased by at least 900 million baht a year following the financial restructuring and rail network expansion.
The agency will set up a provident fund to reduce the burden from its pension programme, now costing the agency up to 50.2 billion baht a year.
Its revenues from land management will be used as start-up funding for its provident fund, said Mr Siwa.
Now, SRT has just agreed to purchased/make major repair 33 second-handed aircon passenger carriages from JR West at 114 million Baht to relieve the passenger carriage shortage.
After SRT Board has agreed to give SRT land to Ministry of Finance (Treasury Dept) as the way to write off 37 billion Baht debt, SRT has agreed to set up 3 subsidiaries
1) SRT Asset Managemnt Co.Ltd.
2) Eastern Logistic Co.Ltd. for Laem Chabang Port/Map Ta Put Route
3) SRT Electric Train Management Co.Ltd. for Red Line COmmuter Networks and Suvannabhum Airport Link
SRT Board hasd also foudn that SRT has to make investment of 283.527 billion Baht for sustainable rehabilitation and development .... to cut down the logistic cost
1. New lines with investment of 124.193 billion Baht such as
1.1 Denchai - Chiang Rai - Chiang Saen line for the North
(about 350 km, 250 km alone for Denchai - Chiang Rai)
1.2 Suratthani - Phang Nga - Tha Nun line for the South (about 160 km)
1.3 Bua Yai - Mukdaharn - Nakhon Phanom line for Northeast (about 300 km)
2. Invesment for better Services at 13.034 billion Baht
3. Red line commuter Networks with investment of 146.300 billion Baht
I Felt very doubt if the electrification cost ONLY 30 million Baht/km as stated in Siam Thurakij sicne it seems that the jornalist REFUSE to do the homeworks at all ... just a kind of Drive A Journalism ...
It may be possible at that price for Baht in 1960 era (when 1 baht of gold is 400 Baht).
I have seen an example in India Railway that the electrification cost in Year 2002:
Electrification on Double Track: Rupees 6.5 million/km ($US 135000)
Electrification on Single Track: Rs 4 million/km
The cheaper cost is due to cheaper labor wages and salary rates for Indian Railways Engineers and may not taking the Massive rehabilitation into account.
Therefore, I may have to take a look at the alternative that have shown cost more realistic to Thai railway systems.
174.5 km Rawang - Ipoh Double tracking & electrification + 4.5 km from Ipoh to Falim (whcih may include rehabilitation due to the newer ballast on double track) cost about RM4.6-billion + RM1.1 billion to finish the work after terminating the old RM4.6-billion contract in 2005 -> total about 62.7 billion Baht in current exchange rate -> 350.28 million Baht/km. This section is on the level section though.
The Double tracking & electrification on the Mountain section (the section from Ipoh to Taiping) which will cost a lot more since it NEEDs track realignment along with the new double track tunnel to meet 160 kph requirement.
Therefore, 500-700 million Baht/km for Electrification and Double Tracking for the 55-km Kaeng Khoi - Pakchong section through Dong Phraya Yen section is quite a realistic cost since it may need track realignment to meet 10 mill gradient (10 meter elevation for 1000 meter horizontal distance) instead of the current 24 mill at Chong Bandai Mah.
Let's make analysis on the project here:
Projects specific to Strategy #1 include:
Quote:
1. Massive rahabilitation, including replacing old rails with 100-pound rails (~50kg/m - 100 Lb/yard => British Equivalent of UIC50) in older sections
The sections refered here are the sections which used 70 Lb/yard whcih have been laid since 1960s-1970s - vast majority of Thai railway tracks ... Need a replace of 1500 km ... after the first 3 rehabs from 1993 - 2003.
Quote:
2. Replace aging locomotives
This refer to the final retirement of GEKs - HE - KP or Even Alsthom Class 41 [4101-4154]) with replacement locos whcih are as good as Blue Tiger for the Heavy Line and Asia Runner AR15 for the light whcih have not been rehab. Say no to that Goddamned Blue Dragon ...
Quote:
3. 106 km Double track the route from Kaeng Koi-Khlong 19-Chacheongsao
Double trackign to be in line with the 78 km Double track of Chachongsao - Laem Chabang along with the rehabilitation of Chachongsao - Laem Chabang by replacing 70 lb/yard rails with 100 lb/yard ... new monoblock concrete sleepers and new ballast.
Quote:
4. Electrify track and install new signalling (at a cost of 30 million baht per km ?)
Are you sure that Massive electrification is jsut that cost?
Quote:
5. Solve speed issues by eliminating at-grade crossings and double tracking as necessary
Yeah, more overpasses and fences -> need Concertina razor wire, Barbed wire on the tracks ... or even Landmines if necessary
Quote:
In the short term, 2 other projects will be initiated:
1. Massive Rehabilitation for 1,500 km of track; 28.403 billion baht.
2. Double track Chacheongsao-Kaeng Koi route; 106 km; 7.648 billion baht
(72.15 million Baht/km) -
Double track Chacheongsao-Kaeng Koi route; 106 km; 7.648 billion baht
(72.15 million Baht/km) is cheap due to the elevel grade ... May cost more if the foundation pins are in need in the same way as the ongoing 78-km Double tracking from chachongsao to Laem Chabang.
The initial plan for rehabilitation is 813 km at the price of 28.33 billion Baht for the followign section
Phase 4. North : Phitsanulok - Ban Dan (110 km) -> done
South : Bang Sue - Ban Chimphi (18 km) -> done
: Thung Song - Ban Ton Don (99 km) -> ongoing
Phase 5. Northeast : Kaeng Khoi - Kaeng Sua Ten (37 km) -> waiting
: Suranarai - Bua Yai (192 km) -> waiting
: Thanon Jira - Bua Yai (79 km) -> waiting
Phase 6. Northeast : Bau Yai - Nong Khai (278 km) -> waiting
Therefore the case of 1,500 km of track at the price of 28.403 billion baht will be just Long Loop Rehabilitation to Please voters from all regions - to keep all regions HAPPY even though the Long Loop Rehabilitation is quite inferior to the full Rehabilitation alogn the route since it rehab ONLY the 5000 meter main line.
I felt afraid that the rehab of Phase 5 & Phase 6 will be just Long Loop Rehabilitation instead of Full Rehabilitation. :ohno:
Quote:
While 3 long term projects will be initiated:
1. Construction of long loops in bottleneck locations; 75 billion baht
2. Improvement of signaling and telecommunications at 230 stations; 13.956 billion baht
3. Improvement of facilities for the logistics industry, eg. CY ICD; 6.319 billion baht
Aha! Long Loop Double tracking - a cheap substitute for the Real Double trackingby extending the Passing Loop (Generally Track No.2 or the track which is NOT the main line) from about 500 meter to 5000 meter for each station (2500 meter from the center of station for each direction).
Well, just better than DO NOTHING at all sicne it uses 100 lb/yard for this 5000 meter passing loop in stead of using the old 50 lb (Dated back to 1938) or 70 lb rails (Dated about 1970).
The list of those 832 km Long Loop Double tracking with a price tag of 75 billion Baht can be listed as follows:
North:
1. Lopburi - Ban Dara (326 km)
2. Ban Dan - Huay Rai (25 km - the Hill section)
3. Kaeng Luang - Pang Puay (45 km - the hill section along Yom river)
4. Lamphun - Chiang Mai (22 km for local COmmuter)
Northeast:
1. Map Krabao - Pakchong (47 km) - steep track ... should be full fledge doubel tracking for this section though.
2. Muang Phon - Ban Phai (31 km) - not so sure fro the reason
South:
1. Nakhon Pathom - Nong Pladuk (16 km)
2. Phetburi - Hua Hin (64 km)
3. Prachuab Khirikhan - Chumporn (167 km) - Relivign the bottleneck
4. Surat Thani - Ban Na (29 km) - not so sure fro the reason
5. Khao Chum Thong - Cha Uad (27 km)
6. Lasem Tanod - Ban Ton Done (33 km)
For the case of the New CYs and ICDs ... We already have new CYs at Tha Phra (Main line with 2 passing loops and 2 dead ends) , Kud Jik (Main line with 2 passing loops and 2 dead ends), Sila At (Not so sure), and Ban Thung Pho (Main line with 5 passing loops and ) ... let me guess that they are goign to upgrade the container facility at Thanon Jira and Ban Kho to CYs alogn with otehr place which deserved CYs.
Quote:
The gov't will allow the private to co-invest and operate these passenger and freight lines as follows:
1. Northeast-West route (Nong khai-Kanjanaburi); 990 km; electrified, double tracked, standard gauge; estimated cost 132.660 billion baht.
Total distance is 2,344 km costing 319.312 billion baht.
There is also a new route under Strategy #2, Ms Soythip reveals, stretching from the Northeast to the Eastern seaboard (Jira junction - Mapthabhut) approximately 300 kilometers and estimated budget at 480 billion baht.
//--------------------------------------
Not so sure who are the private sections you are going to PLEASE?
At these price tags, it definitely involved with the reguaging by adding the third track on the existing lines as the way to avoid land purchasing along with the building of the New lines including
Third Track Adding along with electrifications and Long Loop Double tracking
1. Nong Khai - Thanon Jira - Khorat - Kaeng Khoi - Ban Phachi
2. Tahnon Jira - Ubon
3. Ban Phachi - Denchai
New Line with Long Loop Double tracking and electrification.
1. Ban Phachi - Suphanburi
2. Denchai - Chiang Rai - Chiang Khong
3. Kaeng Khoi - Klong 19 - Chachoengsao - Sri Racha - Khao Chee Jan - Map Ta phut
The ONLY thing that make me Worry is that they may decide to build Chiang Mai - Chiang Rai - Chiang Khong instead of Denchai - Chiang Rai - Chiang Khong to please the vested interest who want to keep Chaing Mai at the supremacy despite fo the fact that the moutain section cost 600% higher than the Dencai - Chiang Rai section.
More on the two SRT Subsidiaries before being too late
ASTV Daily 9 March 2009
Deputy Minister of Finanace (Pradit Phatthraprasit - a political financial man from Phichit) told the press after the meeting with State Enterprise policy Board lead by Deputy PM Korbsak Suphawasu that
1. State Enterprise policy Board agrees in principle on the 2 SRT subsidiaries
1.1 Airport Link Co.Ltd.
1.2 SRT Asset Managements Co.Ltd. to separate the potential assets and debts of SRT ..
2. The plan will be submitted to the cabinate on Tuesday 17 March 2009
3. These 2 subsidiaries have to be registered within 30 days after cabinate apporival and established within 6 months.
Thsi plan has NO OBJECTION from SRT Union due to the continuing discussions so the plan will go ahead.
SRT Assets managements will findd the private sectors to dela with the SRT land deveopment along with the administration & asset managements. Private sectors are paying the annual lease to SRT Assets managements while SRT Assets managements is goign to make a JV withotu amkign a direct administration due to the lack of skills on asset managements.
Furthermore, SRT have to review all the existing SRT land leases for better effeciency on revenue collecting.
SRT has targeted for the annual revenue on asset management to be at leat 1 billion Baht from 400 potential SRT land plots since they have the value in the account at 200 billion Baht. SRT will have to pay off the pension fro SRT officers and workers at 52.6 bllion Baht and the payment of debts at 72.85 billion Baht.
Airport Link Co.Ltd. will ask for 560 Million Baht for initial capitals of two subsidiaries - 500 Milion Baht for Airport Link Co.Ltd. intioal capital out of 7000 million Baht registered capital. SRT Asset managemtn ewill use 60 million Baht as the initial capital.
SRT hopes that Airport Link will become profitable in the 6th year after service while SRT will be able to pay of all the pension within 10- years.
More details on 47,679.77 Million Baht Loan to bail SRT Out which cabinet has just approved:
1. Debt restructure - 11 issues with the price tags of 13,206.22 Million Baht via loan
2. Loan for 6 Projects with the price tag of 26,477.55 Million Baht
3. 3,926 million Baht domestic loan for 4 projects related to general administration and 4,070 million Baht foreign loan for 2 projects
6 Projects in questions are
2.1 Track Rehabilitation Phase 5 - 6,408 Million Baht
2.2 Track Rehabilitation Phase 6 - 5,079 Million Baht
2.3 Facilities to connect Airport Link with the mass transit systems - connecting Phetburi subway station with Makkasan center - 87 million Baht
2.4 50 New locomotives with a total price tag of 6,562.50 Million Baht
2.5 Repowering 56 Alsthom locomotives - with a price tag of 3,360 Million Baht
2.6 115 New aircon passenger carriages - with a price tag of 4,981.05 Million Baht
4,070 million Baht foreign loan will go to
2.7 7 New Diesel electric/Diesel hydrolic loco with 15 ton axle load and 13 New Diesel electric/Diesel hydrolic loco with 20 ton axle load with total price tag of 3300 Million Baht
2.8 308 BCFs for container trains [Foreign loans] at 770 Million Baht
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