Debt-ridden State Railway of Thailand (SRT) will set up three subsidiary companies to tackle its financial woes by capitalising on its vast tracts of land, rerouting train routes and streamlining maintenance work.
The first company to supervise SRT's assets including almost 40,000 rai of land will be established in March while the other two -- taking charge of rail routes and maintenance-related jobs -- are expected to emerge by 2024, SRT governor Wutthichart Kalayanamitr said. The companies should unlock the SRT from bureaucratic routines, putting it on a faster track of corporate-style management with an aim to boost revenues and write off debts which are estimated at 100 billion baht, deputy Transport Minister Pichit Akarathit said.
The SRT has listed three jobs for its asset management company. The new firm is required to collect more rent from land, make better use of land, and invite private companies to undertake joint land development under the Private-Public Partnership Act, Mr Wuthichart said.
These tasks are expected to help lead the SRT toward its goal of boosting annual revenues.
"Within five years, the SRT should see revenues surge from three billion baht to five billion baht a year," Mr Wuthichart said.
"And in 10 years the figures must increase to at least 10 billion baht yearly."
He admitted it may not be easy to pull in good rents from all SRT-owned land, which is mainly located along rail tracks, because the lease value in some areas is determined by long-term contracts it has already entered with leaseholders.
A brighter prospect may be seen from new commercial developments eyed on its prime land including areas in the vicinity of Bang Sue railway station and near Mae Nam railway station in Bangkok's Klong Toey district. "We've conducted a feasibility study of land use to pave the way for joint investment with private companies," Mr Wuthichart said.
As for the other two subsidiary companies, he said, setting them up would take time as the restructuring involves a large number of staff.
The SRT will start by first taking a closer look at the financial management of its units overseeing rail routes and maintenance work. Their asset accounts would be "separated" for evaluation in preparation for turning the units into companies. This will allow the SRT to better identify any problems, he said.