Precaution! Bangkok Seeks Court Opinion on NACC Findings Before Settling BTS Debt of 12 Billion Baht
Source: Siam Rath Website
Date: Tuesday, August 06, 2024, 07:08
Mr. Wisanu Sapsohon, Deputy Governor of Bangkok, disclosed the results of a discussion on August 5, 2024, regarding the implementation of the Supreme Administrative Court's order and the payment of 12 billion baht for the operation and maintenance of the Green Line electric train project (parts 1 and 2) to Bangkok Mass Transit System Public Company Limited (BTSC). Following the Supreme Administrative Court's order, the Bangkok Metropolitan Administration (BMA) management has scheduled daily meetings with relevant agencies due to the urgency of the matter. Today, the Traffic and Transportation Department (TTD) has been tasked to coordinate with the Office of the Attorney General to schedule a detailed discussion on the Supreme Administrative Court's judgment concerning the case where the National Anti-Corruption Commission (NACC) issued an accusation and the right to object to the investigation panel, case number 09-3-052/2560 dated January 10, 2023, to the second defendant, Krungthep Thanakom Company Limited (KT), alleging that the former Bangkok Governor and 13 others committed corruption by extending the concession contract or making additional contracts for the complainant to operate the Bangkok mass transit system for another 13 years, despite the remaining 17 years in the original contract, thereby benefiting the complainant. The court noted that the NACC had not yet determined the wrongdoing, so it did not affect the disputed contract in this case.
However, the fact is that the NACC had already determined the wrongdoing in September 2023. Therefore, the BMA requested the Attorney General to discuss and consider whether they could seek the Supreme Administrative Court's opinion to confirm that even with the NACC's findings, the BMA still has to pay the 12 billion baht debt for the operation and maintenance of the Green Line electric train project (parts 1 and 2) to BTSC as ordered by the Supreme Administrative Court. This is to ensure clarity and avoid future issues. Nonetheless, the BMA is uncertain if they can request an opinion from the Supreme Administrative Court, which depends on the Attorney General's discretion on how to proceed.
Simultaneously, the TTD is preparing to present the matter to the Bangkok City Council to seek approval for using the accumulated funds to pay off the 12 billion baht debt for the operation and maintenance of the Green Line electric train project (parts 1 and 2) soon. The urgency of this matter is due to the accruing daily interest of 2 million baht.
Source: Thansettakij
Date: Wednesday, September 04, 2024, 05:23
BTS Set to File Legal Action After Bangkok and Krungthep Thanakom Refuse to Pay Debt
BTS is preparing to file a lawsuit under Section 157 of the Criminal Code after Bangkok Metropolitan Administration (BMA) and Krungthep Thanakom refused to pay a 40-billion-baht debt related to the operation of the Green Line. The debt dispute has caused significant damage to both the public and private sectors, with interest on the debt accruing at a rate of 7 million baht per day. The BMA plans to pay the first installment of the debt, amounting to 12 billion baht, in one lump sum by November, in accordance with a court order.
The Green Line skytrain project continues to face ongoing complications despite a ruling from the Supreme Administrative Court, which ordered Bangkok and Krungthep Thanakom to pay the first installment of 12 billion baht to the Bangkok Mass Transit System Public Company Limited (BTSC) within 180 days from July 26, 2024.
BMA Cites Pending NACC Cases
To date, the BMA has not initiated negotiations with BTSC to settle the debt, instead citing ongoing investigations by the National Anti-Corruption Commission (NACC) regarding the legality of the original contract for the operation and maintenance (O&M) of the Green Line. The delay is causing the debt to accrue interest at a rate of 7 million baht per day, which could bring the total owed, including principal and interest, to 14 billion baht.
The Green Line is one of the public transportation projects operated by the Bangkok Mass Transit System Public Company Limited (BTSC), covering a total of 23 stations. This includes the Sukhumvit Line (Mo Chit to On Nut, 17 km) and the Silom Line (National Stadium to Saphan Taksin, 6.5 km), with fares ranging from 17 to 47 baht. The concession was granted to BTSC by the Bangkok Metropolitan Administration for 30 years, starting from December 5, 1999, until December 4, 2029, after which BTS was contracted to operate the line from December 5, 2029, to May 2, 2042.
The first extension of the Green Line (On Nut to Bearing on the Sukhumvit Line and Saphan Taksin to Bang Wa on the Silom Line) has fares ranging from 15 to 62 baht. The BMA contracted Krungthep Thanakom (KT) to manage the system and BTSC to operate the trains under a 30-year contract ending on May 2, 2042.
For the second extension (Bearing to Samut Prakan and Mo Chit to Khu Khot), the fare is set at 15 baht for the entire line. KT was again contracted to manage the system, with BTSC operating the trains under a 26-year contract also ending on May 2, 2042.
The construction of the second extension was funded by BTSC through loans for installing the electric train system and purchasing trains, providing free service for three years as the BMA had not authorized fare collection for the extension. The costs for the trains and the electrical and mechanical (E&M) systems amounted to 23 billion baht, with the total operating and maintenance (O&M) costs reaching 40 billion baht.
The BMA initially announced a maximum fare of 65 baht for the Green Line, which was met with public outcry and subsequently scrapped. The ongoing debt issue has led to multiple lawsuits by BTSC in the Administrative Court.
In the current administration under Governor Chadchart Sittipunt, the BMA has been studying the feasibility of charging 15 baht for the second extension and has expedited the approval process to use budgetary funds to settle the 23 billion baht E&M debt with BTSC. This follows a court order for the BMA and KT to pay the debt.
On July 26, 2024, the Supreme Administrative Court ordered both the BMA and KT to jointly pay the Green Line project debt within 180 days, which includes 2.348 billion baht for the first extension, along with 2.199 billion baht in interest, and 9.406 billion baht for the second extension, along with 8.786 billion baht in interest.
Outstanding Debt of 31.555 Billion Baht
The outstanding debt for the operation of the second extension of the Green Line is divided into three parts:
1. 11.755 billion baht ordered by the Supreme Administrative Court.
2. Over 10 billion baht for services rendered between 2022 and 2023, excluding interest. This debt is currently being litigated in the Central Administrative Court.
3. Over 10 billion baht for services rendered between 2023 and the present, excluding interest. This debt is due for payment on the 20th of each month.
Recent informal discussions between the BMA and BTSC indicate that the BMA will reconsider the second portion of the debt from 2022 to 2023, while the third portion from 2023 to the present will be paid using revenue from the first and second extensions, rather than only the first extension, as was previously the case.
When asked why the BMA had not used revenue from the second extension to pay BTSC, it was revealed that the BMA was concerned about the unresolved investigation by the NACC. However, the NACC has now concluded its investigation, although the Supreme Administrative Courts ruling remains unchanged.
BTSC has stated it will no longer pursue legal action for the debt from 2023 to the present but will instead file a lawsuit against the BMA and KT under Section 157 of the Criminal Code for failing to fulfill their legal duties. The Supreme Administrative Court has already ruled in favor of BTSC, meaning the contract is legally binding, and the court's ruling cannot be overturned. If Section 157 proceedings are initiated, the BMA will need to defend itself in court.
Daily Interest Penalty of 7 Million Baht
The BMA and KTs failure to pay the Green Line debt has caused substantial damage to the public sector. If the debt is not paid on the 20th of each month, BTSC will incur interest at a rate of 8.05%, equating to 7 million baht per day. This also places a significant financial burden on BTSC, which has monthly operating costs of around 800 million baht, excluding interest.
According to sources at BTS Group Holdings, the NACC has accused 12 individuals involved in signing the contract with BTSC to operate the three extensions of the Green Line until 2042. However, this does not pertain to the second extension debt, which the BMA has failed to pay. The Cabinets 2018 resolution stated that any issues with administrative contracts or arbitration involving court orders must be complied with, yet the BMA has not adhered to this.
BMA Expects to Start Debt Repayment by November
A source from the BMA stated that following the court order, the BMA is in the process of requesting budgetary funds to settle the debt with BTSC. The budget will need to be approved by the Bangkok City Council.
Once approved, the BMA plans to pay BTSC in one lump sum of 12 billion baht as ordered by the court, likely by November. However, this will depend on the City Council's process. The funds will be paid to the Legal Execution Department, which will then disburse the payment to BTSC.
Regarding the outstanding debt with BTSC, the BMA will need to discuss with Governor Chadchart Sittipunt on how to proceed. For now, we will comply with the courts order. The BMAs total outstanding debt to BTSC, including the court-ordered amount, stands at 40 billion baht, the source said.
Source: Thansettakij
Date: Wednesday, September 04, 2024, 05:23
BTS Set to File Legal Action After Bangkok and Krungthep Thanakom Refuse to Pay Debt
BTS is preparing to file a lawsuit under Section 157 of the Criminal Code after Bangkok Metropolitan Administration (BMA) and Krungthep Thanakom refused to pay a 40-billion-baht debt related to the operation of the Green Line. The debt dispute has caused significant damage to both the public and private sectors, with interest on the debt accruing at a rate of 7 million baht per day. The BMA plans to pay the first installment of the debt, amounting to 12 billion baht, in one lump sum by November, in accordance with a court order.
The Green Line skytrain project continues to face ongoing complications despite a ruling from the Supreme Administrative Court, which ordered Bangkok and Krungthep Thanakom to pay the first installment of 12 billion baht to the Bangkok Mass Transit System Public Company Limited (BTSC) within 180 days from July 26, 2024.
BMA Cites Pending NACC Cases
To date, the BMA has not initiated negotiations with BTSC to settle the debt, instead citing ongoing investigations by the National Anti-Corruption Commission (NACC) regarding the legality of the original contract for the operation and maintenance (O&M) of the Green Line. The delay is causing the debt to accrue interest at a rate of 7 million baht per day, which could bring the total owed, including principal and interest, to 14 billion baht.
The Green Line is one of the public transportation projects operated by the Bangkok Mass Transit System Public Company Limited (BTSC), covering a total of 23 stations. This includes the Sukhumvit Line (Mo Chit to On Nut, 17 km) and the Silom Line (National Stadium to Saphan Taksin, 6.5 km), with fares ranging from 17 to 47 baht. The concession was granted to BTSC by the Bangkok Metropolitan Administration for 30 years, starting from December 5, 1999, until December 4, 2029, after which BTS was contracted to operate the line from December 5, 2029, to May 2, 2042.
The first extension of the Green Line (On Nut to Bearing on the Sukhumvit Line and Saphan Taksin to Bang Wa on the Silom Line) has fares ranging from 15 to 62 baht. The BMA contracted Krungthep Thanakom (KT) to manage the system and BTSC to operate the trains under a 30-year contract ending on May 2, 2042.
For the second extension (Bearing to Samut Prakan and Mo Chit to Khu Khot), the fare is set at 15 baht for the entire line. KT was again contracted to manage the system, with BTSC operating the trains under a 26-year contract also ending on May 2, 2042.
The construction of the second extension was funded by BTSC through loans for installing the electric train system and purchasing trains, providing free service for three years as the BMA had not authorized fare collection for the extension. The costs for the trains and the electrical and mechanical (E&M) systems amounted to 23 billion baht, with the total operating and maintenance (O&M) costs reaching 40 billion baht.
The BMA initially announced a maximum fare of 65 baht for the Green Line, which was met with public outcry and subsequently scrapped. The ongoing debt issue has led to multiple lawsuits by BTSC in the Administrative Court.
In the current administration under Governor Chadchart Sittipunt, the BMA has been studying the feasibility of charging 15 baht for the second extension and has expedited the approval process to use budgetary funds to settle the 23 billion baht E&M debt with BTSC. This follows a court order for the BMA and KT to pay the debt.
On July 26, 2024, the Supreme Administrative Court ordered both the BMA and KT to jointly pay the Green Line project debt within 180 days, which includes 2.348 billion baht for the first extension, along with 2.199 billion baht in interest, and 9.406 billion baht for the second extension, along with 8.786 billion baht in interest.
Outstanding Debt of 31.555 Billion Baht
The outstanding debt for the operation of the second extension of the Green Line is divided into three parts:
1. 11.755 billion baht ordered by the Supreme Administrative Court.
2. Over 10 billion baht for services rendered between 2022 and 2023, excluding interest. This debt is currently being litigated in the Central Administrative Court.
3. Over 10 billion baht for services rendered between 2023 and the present, excluding interest. This debt is due for payment on the 20th of each month.
Recent informal discussions between the BMA and BTSC indicate that the BMA will reconsider the second portion of the debt from 2022 to 2023, while the third portion from 2023 to the present will be paid using revenue from the first and second extensions, rather than only the first extension, as was previously the case.
When asked why the BMA had not used revenue from the second extension to pay BTSC, it was revealed that the BMA was concerned about the unresolved investigation by the NACC. However, the NACC has now concluded its investigation, although the Supreme Administrative Courts ruling remains unchanged.
BTSC has stated it will no longer pursue legal action for the debt from 2023 to the present but will instead file a lawsuit against the BMA and KT under Section 157 of the Criminal Code for failing to fulfill their legal duties. The Supreme Administrative Court has already ruled in favor of BTSC, meaning the contract is legally binding, and the court's ruling cannot be overturned. If Section 157 proceedings are initiated, the BMA will need to defend itself in court.
Daily Interest Penalty of 7 Million Baht
The BMA and KTs failure to pay the Green Line debt has caused substantial damage to the public sector. If the debt is not paid on the 20th of each month, BTSC will incur interest at a rate of 8.05%, equating to 7 million baht per day. This also places a significant financial burden on BTSC, which has monthly operating costs of around 800 million baht, excluding interest.
According to sources at BTS Group Holdings, the NACC has accused 12 individuals involved in signing the contract with BTSC to operate the three extensions of the Green Line until 2042. However, this does not pertain to the second extension debt, which the BMA has failed to pay. The Cabinets 2018 resolution stated that any issues with administrative contracts or arbitration involving court orders must be complied with, yet the BMA has not adhered to this.
BMA Expects to Start Debt Repayment by November
A source from the BMA stated that following the court order, the BMA is in the process of requesting budgetary funds to settle the debt with BTSC. The budget will need to be approved by the Bangkok City Council.
Once approved, the BMA plans to pay BTSC in one lump sum of 12 billion baht as ordered by the court, likely by November. However, this will depend on the City Council's process. The funds will be paid to the Legal Execution Department, which will then disburse the payment to BTSC.
Regarding the outstanding debt with BTSC, the BMA will need to discuss with Governor Chadchart Sittipunt on how to proceed. For now, we will comply with the courts order. The BMAs total outstanding debt to BTSC, including the court-ordered amount, stands at 40 billion baht, the source said.
Bangkok Approves 14 Billion Baht of Reserve Funds to Pay BTS Debt, Awaiting City Council Decision on September 12
On September 10, 2024, at Bangkok City Hall, Governor Chadchart Sittipunt, following a meeting with city executives, stated that an urgent executive meeting had been convened. Present at the meeting were Deputy Governors Chakkaphan Phewngam, Wisanu Subsompon, and Sanon Wangsrangboon, along with Permanent Secretary for Bangkok Wanthanai Wathana, other executives, and representatives from the Traffic and Transportation Department and the Budget Office. The purpose was to discuss and approve additional expenditure for the fiscal year 2024, using Bangkok's reserve funds.
The meeting agreed to propose a plan to manage the Green Line extension project, specifically for paying the outstanding debt owed to Bangkok Mass Transit System Public Company Limited (BTSC) for operating and maintaining the Green Line extensions 1 and 2. The total debt, including principal and interest, amounts to 14,549,303,752.489 baht, calculated up until January 21, 2025, or within 180 days of the Supreme Administrative Court's ruling on July 26, 2024.
The Bangkok Metropolitan Council (BMC) will review this proposal on September 12 to approve the use of reserve funds to settle the debt, allowing the 2025 budget to be discussed smoothly. If the debt is paid early, the amount might not reach the approved total. Additionally, the council will discuss the contract for the second extension of the Green Line, covering the Mo Chit-Saphan Mai-Khu Khot and Bearing-Samut Prakan sections, with BTSC contracted to operate and maintain the system until 2042. This contract has yet to be reviewed by the BMC, and discussions aim to settle future debt obligations.
The article discusses the ongoing dispute over who should pay the operating and maintenance fees for the Green Line Extension in Bangkok. The Supreme Administrative Court has ruled that the Bangkok Metropolitan Administration (BMA) is responsible for the debt, but the BMA has attempted to delay payment, leading to accumulating interest.
**Summary:**
* **Court Ruling:** The Supreme Administrative Court ruled that the BMA must pay the outstanding operating and maintenance fees for the Green Line Extension, plus interest.
* **BMA Delay Tactics:** The BMA, including Governor Chadchart, has employed various tactics to delay the payment, such as requesting a new trial and claiming to be waiting for further information.
* **Accumulating Interest:** These delays have resulted in significant interest accumulating on the debt, costing the BMA millions of baht per day.
* **Author's Opinion:** The author believes the BMA is deliberately delaying payment, possibly for personal gain or to harm the private operator, BTS. They urge the BMA to comply with the court ruling and question who will be held responsible for the mounting interest.
* **Previous Government's Role:** The author also mentions the previous government's failed attempt to resolve the issue by using Section 44 to extend the concession without payment.
**Key Points:**
* The BMA is legally obligated to pay the Green Line debt.
* Delays in payment are costing taxpayers millions of baht in interest.
* The author criticizes the BMA's actions and questions their motives.
This issue highlights the challenges of public-private partnerships and the importance of timely debt repayment to avoid escalating costs.
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