[Considering the government's successful moves to quash the extensions and other actions to force the Skytrain into bankruptcy and nationalization, it will be interesting to hear the Skytrain company's version of events.]
Thaksin said during his weekly radio programme that he had convinced the Skytrains operators that if they were to lower their fees they would attract more passengers and would also benefit from side businesses such as shop rentals at the stations...
BTS show the results after 5-years in service: 431 million passenger and counting - translated and summarized from Manager Daily, November 30, 2004
BTS has told the press 5 years of BTS service resulted in 431 million passengers (Dec 5, 1999 - Nov 23, 2004) and growing.
BTS services have been running for more than 18 million km without fatal accidents, a proven testimony to safety. The number of passenger in 2004 is 5% higher than the target, reaching 115 million. The growth in the number of passengers will be 13%. The debt restructure will be done by July 2005. The average number of passengers during weekdays: 380,000 passengers a day--10% higher than the previous year.
The average number of passengers on Saturdays: 304,304 passengers
The average number of passengers on Sundays: 218,741 passengers
The record on Loy Krathong Day in 2004 (Nov 26, 2004): 457,839 passengers
The daily expense: 3-4 million baht
The daily revenue: 7-8 million baht
The profit has been used to pay the interest on the debt (80-90%).
The level of satisfaction has increased from 75% to 80%, especially on safety and service. BTS has run 32 sets of rolling stock from the existing 35 sets and is going to purchase new sets of rolling stocks to ease overcrowding.
The increased number of passengers is due to the increasing number of regulars who use 30-day passes--especially the 30-trip type (540 baht each). This contributes to the additional 10,625 trips a day (or 17%). The three interchanges with the Subway at Saladaeng, Mochit and Asok are also factors in the increasing number of passengers. 32 more escalators from the road to the ticket level have been installed in addition to the existing 46 escalators from the ticket level to the platforms. Viaduct connections for 9 BTS stations with other buildings and feeder buses also increase the number of passengers.
The debt restructure plan for the outstanding debt of 30 billion baht has been approved by the board and is ready for application by July 2005 before offering an IPO by the end of 2005. BTS met the Nationalization Committee only once and BTS have come up with the plan for the following extensions:
1) Taksin extension (Saphan Taksin - Taksin Intersection - 2.2 km)
2) Samrong extension (Onnut - Samrong - 8.9 km)
3) Phaholyothin extension (Mochit - Kaset - Saphan Mai - 12 km)
BTS agrees to invest 100 million baht on a contactless smart card system installation for a joint ticket system without a nationalization process. Three interchanges, terminals and major stations will have the smart card system installed.
BTS has come up with the following activities for its 5-year anniversary:
1) A flight to the Maldives to be won by a passenger who purchases a 30-day pass and refills a stored value ticket with at least 100 baht.
2) Free trips for fathers and children who travel together from one station to the another station.
Note: Request for Taksin Extension have become louder as seen here.
No progress on Skytrain nationalization
- translated and summarized from Matichon,
November 25, 2004 and Thai Post, November 27, 2004
Very little progress has been made on BTS and BMCL nationalization even after three meetings since there is new data which requires new estimations and assessments. However, the plan for nationalization will go on until the new government has scrapped the plan.
Skytrain spurns nationalization:
will finance extensions and smart card system on its own
- translated and summarized from Prachachat
Turakij, November 22, 2004
[Wisarut notes this is a humiliation to Transport Minister Suriya who tried to nationalize the Skytrain claiming it was the only way they could complete extension and have an integrated ticket system. ]
BTS Boards of Director has approved a debt restructure plan to be submitted to creditors and BTS will start the two extension on their own after 2004 (the year BTS will make a profit)--without being nationalized. The BTS Board agrees with the plan for smart card system installation to work in both Subway and Skytrain without the Skytrain being nationalized. BMA is pushing MahadThai (MOInterior) for the plan to enable BMA to help BTS Skytrain to deal with the extensions.
After 2005, BTS is going to start the long-awaited Taksin extension phase 1 (2.2 km) with a price tag of 1 billion baht. On the other hand BTS is going to offer an IPO to finance the Samrong Extension (8.9 km). Creditors and shareholders agree with the BTS Board that investment on extensions is a big must and they are ready to inject necessary funds to finance the projects after settling the debt restructure. No tax money is needed unless surging public demand compels BTS to ask for taxpayer money to speed up the projects.
Even though Super K has sent a letter to Premier Maew [Thaksin] to enable BMA to help BTS speed up projects to satisfy public demands, Thaksin seems to pay attention to Subway investment on expansion instead.
BTS is going to introduce a smart card system to function as a joint ticket system with an investment of 250-300 million baht. However, BTS and BMCL have to make a settlement on ticket rates and revenue sharing before introducing the system in the next three months. This is a way to show Premier Thaksin and Minister Suriya that the private sector can come up with a joint ticket system without intervention from the government. Some shareholders such as AIG (Thailand) [the mother company of AIA - the largest insurance company in Thailand] do not want the nationalization at all.
The BTS Board agree to extend the maintenance contract with Siemens (Thailand) for another 10 years and Siemens (Thailand) has agreed to cut the fee collected from BTS and throw in extra free items such as the software controllers, etc.
More passengers are riding the Skytrain with revenue of 200 million baht a month and the 380,000 daily passengers even without the extensions.
BMA has modified the Taksin extension structure so that it nearly reaches Klong Dan and Phet Kasem road. BMA told MahadThai that after Taksin extensions (both phases) becomes a reality, there will be at least 50,000 more daily passengers for BTS.
The debt restructure can be shown as follows:
1) Turn 4.31 billion baht debt into equity
2) Cut the principle of debt by 2.2 billion baht
3) Cut the outstanding interest by 5.76 billion baht
4) Turn 10.8 billion baht debt into bonds
5) Turn 1 billion baht into priority stocks
6) Paying the rest of the debt (14 billion baht) in 18 years
7) Cut down the registered capital from 14.933 billion baht to 6.08 billion baht
Such measures will enable BTS to extend across Chaophraya to Taksin Intersection without borrowing from creditors.
BTS benefiting from the delay in commercial development
in subway stations - translated and summarized from Thaipost, October 16, 2004
BTS has a bigger smile due to the delay of commercial development in Subway stations - compelling the customers to go for commercial deals with the Skytrain. The number of Skytrain passengers is up to more than 400,000 a day thanks to the Subway which picks up the passenger from the route BTSC does not reach.
The number of products sold in the stalls inside Skytrain stations has doubled breaking the target very often. SRT advertising on the rolling stock is not a competitor for BTS advertising on the bogey since they aim for different marketing targets.
Skytrain advertising has a much bigger number of customers due to the ease to spot the ads compared to the subway ads. SRT advertising on the bogey is not considered a competitor. Since the Skytrain advertising is for those well to do customers while SRT advertising is for the mass.
The decreasing number of Subway passengers after August 12 and the delays on commercial development in the Subway stations have compelled agencies to place ads at other places. SRT advertising is good for those who ride the train at Bang Sue, Bang Son, Bang Pho or Ayudhaya as well as those stations along commuter lines. However, most intercity railway passengers have strong hostilities if not outright hatred toward the advertising on the trains.
Mang Pong at Asok Station said that the video rental (Video, CD, DVD) monthly revenue has doubled after the Subway become a reality--from 1-200,000 baht a month to more than 200,000 baht a month.
60% is sold to Thai customers and 40% to foreigners even though foreigners have much more purchasing power than local Thai customers.
The cloth sellers said the revenue from selling clothes in Skytrain stations is doubled from 1-20,000 baht a month to 40,000 baht a month without any signs of stagnation. Most customers are Thai white-collar workers and the other 30% are teens. Very few foreigners buy clothes there, but when they do buy more than 1000 baht worth each time.
Even the sellers of JMart (telecom and mobile phone franchise of Jasmine International PCL) said their monthly sales has been jumped to 80,000 baht a month after the opening of the Subway--80% are Thai white-collar customers and the rest are foreigners.
Skytrain using recorded announcements -
September 30, 2004
Wisarut reports: BTSC is starting to use recorded announcers (for station announcements). The ladies who make these announcements are not quite at par with Khun Sarocha (the best news announcer) who has recorded her voice for MRTA announcements.
Wisarut reports: About the cracks mentioned in Pantip.com (here and here). The answer is it is a termite route and BTSC just cleans them. It will not have any harmful effect on the structure as testified by Nu Duan of BTS as well as BTSC Engineers.
Earlier: Skytrain cracks? - September 28, 2004
Ton points this photo of a crack in a Skytrain pillar and the related thread on Pantip.com.
BMA preparing to open skywalk viaduct linking Chitlom
and Siam Station - translated and summarized from Manager Daily, September 29, 2004
BMA is preparing a viaduct linking Chitlom and Siam Station as a new tourist spot in Bangkok to be open in mid-December 2004. This viaduct will enable the Skytrain passenger to go to Ratchaprasong Intersection without going down to the street level. Shops along the walk will turn it into another shopping area.
This viaduct will go from Gaysorn Plaza at Ratchaprasong Intersection to Chaloemphao Intersection near Siam Station with total distance of 513 meter and average width of 7.5 m. The construction started in July 2004. The budget for this viaduct is 260 million baht. The contractor has entered into the construction site to make foundation pillars to carry the bigger pillars of the via duct. After that, they will
put steel pillars and structures for the viaduct along with the roof to be installed later on.
It will be done in December 2004 and ready to be open mid-December 2004. This viaduct will enable BTSC to link Siam Paragon with Siam Station.
Commentary by Wisarut: Some complained that BMA officers have not fixed the clock tower at Ratchaprasong Intersection. Look at this page and you will see.
BTSC debt settlement with
creditors closer to reality - translated
and summarized from Bangkok Biznew, September
Shareholders have approved the BTSC debt restructure with a 8.5 billion baht debt cut to 14 billion baht while extending debt payment from 12 to 18 years. After that, this plan will be submitted to the Debt Restructure Committee (Bank of Thailand) before signing a debt restructure plan with creditors.
ITD told the press that they could sell BTSC stocks at the price below par while Mr Super K [Kasem Jatikawanit, the Chairman of BTSC Board of Directors] said they will have a chance to gain more revenue to invest on the Samrong and Taksin extensions after the successful debt restructure.
The shareholder meeting was held on September 15 about the the debt restructure plan of 39 billion baht with 3 main creditors (KfW, IFC, SCB). The principle of this debt is about US$800 million [about 33 billion baht]. After that, BTSC will submit the debt restructure plan to the Debt Restructure Plan Committee, Bank of Thailand before signing the debt restructure deal with the creditors. The debt restructure will be done in December 2004.
The debt restructure will be:
1) Trimming of 8.5 billion baht [2.2 billion principle and 6.3 billion baht outstanding interest]
2) Debt payment extension of 14 billion baht from 12 years (AD 2012) to 18 years (AD 2022). 30% of this debt is in baht denomination (annual Interest cut by 2%) while the rest is in US dollar denomination (interest down by 1%).
3) Turning 12 billion baht debt into 12 billion baht bonds with an 18 year term and the company will issue 120 million common stocks for this matter.
4) Turning 4.3 billion baht into the equity to add into the registered capital of 12 billion baht with the price at par of 10 baht. After the signing the debt restructure, the par price will be down to 5 baht.
Debts from creditors with no collateral is 8 billion baht:
1. Trading creditors of 5.3 billion baht
2. Bond holders of 2.7 billion baht
They will have the debt trimmed 50% and the rest will become equity.
Currently, the daily number of passengers has shot up from 150,000 to 400,000 with daily revenue of 8 million baht while the daily expense is 3 million baht.
After the debt restructure, the old shareholders will be down from 58% to 42.1% while the creditors with collateral will grab 29.8% of shares and the creditors without collateral will grab 28.1% of shares.
After the successful debt restructure, the IPO will be started so as to capitalize the equity for Samrong and Taksin extension.
BTSC said if the government has capital to invest on the mass transit project, they should spend their capital to expand the Subway route instead of nationalizing both companies since they can merge both companies by themselves. Furthermore, it takes time for the government to capitalize the funds for purchasing both companies. The company is willing to pay back the government if the government is
willing to lend the companies some funds for system expansion. The payback can be in form of revenue sharing if the government wants.
However, ITD is willing to sell their BTSC stock to the government but the government has to pay at the price that pleases the private sector. However, ITD has a provision to sell the stock lower than 5 baht par to pay off debts.
Commentary by Wisarut: For the case of ITD, their sale of stock to the government is a way to curry favor to get a better chance for mass transit contracts such as the Suvannabhum Airport Link.
Pangpond on the Skytrain - September 3, 2004
Thai Pangpond cartoon characters appear on the latest Skytrain tickets.
The Thai-language forums
- July 29, 2004
Wisarut reports on what's going on in Thai-language forums: Delayed BTSC Extension through the government's intention have already bred distrust in the government and many people want Subway to be extended.
Keeree Kanjanapas, chief executive officer and a major shareholder of the Bangkok Mass Transit System, continues to insist that the Bangkok skytrain mass transit system is not for sale.
...Mr Keeree said if the government truly wanted to accelerate the extension of the mass transit project by integrating the skytrain with the new Bangkok subway, it should use money it would raise to buy the two projects to invest in expanding them adding that this seems to be an easier solution than being locked in a dispute with the private firms...
Suriya claiming the government has already purchased 55% of Skytrain stocks from major creditors - translated and summarized from Manager Daily, July 26, 2004
Minister Suriya told the press that after cutting 45% of BTSC debt, the government has purchased both BTSC debts and BTSC stocks from major creditors (KfW, IFC, SCB) with a price tag of 20 billion baht and the creditors have already forgiven the penalty for debt delinquence of 1 billion baht. This takeover is for the benefit of the people and without hidden agenda. The price for taking over is fair for both companies as well as for the people.
The government is also planning to take over BTSC by owning at least 51% of stocks as the exchange for public investment for the main structure of Skytrain extensions. The creditors will give more loans for purchasing Skytrain rolling stock only when the government has acted as the underwriter or only after the government takeover.
Earlier: Suriya defends Skytrain buyback scheme - July 23, 2004
Earlier: Skytrain takeover deadlock - Prachachat Turakij, July 19-21, 2004
Earlier: The real costs of taking over the Skytrain-Subway? - Thaipost, July 19, 2004
Suriya defends Skytrain buyback
scheme - July 23, 2004
The Bangkok Post finally openly mentions the accusations that the government is purposely halted Skytrain extension--but only after the charge was made by the Bangkok governor. 2Bangkok.com has been reporting this since 2000.
(Suriya defends govt bid to buy skytrain - Line extensions `will proceed' as planned, Bangkok Post, July 23, 2004) Transport Minister Suriya Jungrungreangkit yesterday defended plans to buy back the skytrain operator's concession before going ahead with route extensions.
His remarks were in response to criticism by Bangkok governor Samak Sundaravej, who on Wednesday accused the government of blocking city hall's plan to expand the line...
Despite being criticised over the buyout plan, Mr Suriya remained firm, saying that what the government was trying to do would benefit commuters in the long run once all mass transit systems, including the subway and buses, were integrated. Fares would be cheaper if the government could link all systems together instead of having separate firms run the services, he said.
Buying the subway - July
Thailand's Subway Operator BMCL Plans To Launch IPO In 4Q - Yahoo-Dow Jones, July 21, 2004
Bangkok Metro Co. Ltd., or BMCL, the operator of Thailand's first subway system, said Wednesday it plans to launch its long-awaited initial public offering and list on the Stock Exchange of Thailand in the fourth quarter this year...
"We want to be able to show our revenue to investors first before selling shares," BMCL Managing Director Sombat Kitjalaksana told reporters after a shareholders' meeting.
Previously, BMCL had planned to sell 97.5 million shares to the public to raise between 2 billion baht ($1=THB40.801) and THB4 billion...
Sombat said the company is also willing to sell its shares to the government at THB3 apiece; however, there is no development in the share sale so far.
The government had earlier indicated it wants to buy back elevated and underground mass transit projects in Bangkok from private operators and to integrate them before expanding the infrastructure.
BMCL to sell subway given the right price - Shareholders approve share sale - Bangkok Post, July 22, 2004
Bangkok Metro Plc (BMCL), the subway concessionaire, said yesterday that it would sell the underground public transit system to the state immediately--given the right price.
"We are ready to deal and have no desire to be locked into a long dispute with politicians,'' said Dr Sombat Kitjalaksana, BMCL's managing director.
"It's only a question of how long it will take for the authorities to show that they are truly ready.''
His latest comments showed that the subway concessionaire has toned down its initial opposition to the proposed state buyout...
According to Dr Sombat, the company has thrown in the towel in its dispute with the MRTA over the state's claim that it has the right to buy up to 25% of BMCL shares at par value...
BMCL's shareholders yesterday agreed to raise some 900 million baht by selling 300 million new shares at three baht apiece to existing shareholders, including leading contractor Ch Karnchang...
Skytrain takeover deadlock
- translated and summarized from Prachachat
Turakij, July 19-21, 2004
After the initial failure to convince BTSC to sell their stocks to the government - with the claim that more passengers will ride the Skytrain (from 370,000 to 400,000 passengers a day) even though the subway is open, one of the BTSC creditors told the correspondents from Prachachat Thurakij that the creditors are going to reject BTSC's debt management plan despite the 1-year negotiation because BTSC is asking creditors to cut the principle which is unacceptable. So far BTSC is paying only 0.1% of interest rates while they refuse to pay the principle.
Therefore, the creditors will force BTSC to raise more revenue--if they do not want to raise the ticket prices, then through advertising and space leasing. However, there is no creditor willing to help BTSC to deal with investment since they have not paid back their debts. Even the government's plan to take over the company through the purchase of debts is quite difficult since it requires the approval from the shareholders which includes Thanayong which is the major shareholder. The only option for now is to apply the Thai Asset Management Act to force Thanayong to convert more debt into equity. Even now BTSC still pays interest at MLR rates without paying the principle while claming that they will break even in 8-9 years.
Foreign creditors see no point that BTSC will be able to pay off the debts and they refuse to cut the debts without gaining control of the debtor's company, let alone the new credit lines for extensions.
There are only 3 ways for BTSC to boost revenue:
1) Increase ticket prices - especially during the rush hour periods.
2) Increase the advertising fee as well as the space leasing.
3) Make more investment - out of the question for this option since the company can only pay interest
Minister Suriya successfully convinced the creditors to cut debts by 45% as an exchange for taking over the company via buying the debts with a price of 21 billion baht, turning the asset into equities. However this plan hit a stumble block from Thanayong. Nevertheless, the government can take over the company by enforcing the Thai Asset Management Act which allow the shareholders of at least 10% to turn debts into equities.
There are 40 billion baht of BTSC debts -
7.4 billion baht is from commercial debts.
33 billion baht is from creditors with collateral - 10.6 billion baht of this is from domestic sources which consist of:
1) SCB - 3.2 billion baht
2) Thai Asset Management Co.Ltd. - 3.3 billion baht
3) Thanachat Asset Co.Ltd. - 2.1 billion baht
4) Industrial Asset Co.Ltd - 0.5 billion baht
5) IFCT - 1.5 billion baht
Foreign creditors - 38.2 billion baht
1) KfW - US$ 268 million (26.160 billion baht)
2) IFC - US$ 80 million ( 2.680 billion baht)
3) OKB - US$ 182 million
Hot Issue by Suphoj Ungthong: taking over the Subway
and Skytrain - translated and summarized from Than Setthkij, July 18-21, 2004
Now, we see how Suriya is dealing with plan to takeover--applying spin doctor tactics--without even consulting with BTSC and BMCL at all while sychopants like Mr Khumroblux are just trying to reassure the public that Minister Suriya's Plan is a real plan.
Even worse, Suriya is threatening to bankrupt BTSC and BMCL unless they allow the government's takeover. This really chokes both Mr Pliw Triwitsawawet and Mr Khiree Kanchanaphak - and when Mr Khiree breaks the silence that he is going to settle the debts and come up with the joint smart card ticket, we learn that Mr Suriya has no actual plan for taking over the system at all despite the puppet committee set up by Mr Suriya.
Suriya pushes plan to purchase
the Skytrain without listening to Mr Kheree--claims that creditors
agrees with government plan - translated
and summarized from Matichon, July 15,
Minister Suriya told the press that MOTC will push the purchasing plan forward without listening to Mr Khiree's appeal since the government successfully negotiated with KfW, SCB, Thai Asset Management, and IFC to write off 45% of BTSC debts while BTSC failed to deliver the debt restructure in time.
After that, the government will push the nationalization plan forward and purchase stocks at 3 baht/share even though the shareholders like Italian Thai Development PCL had purchased BTSC stock at 15 baht/share. Minister Suriya claimed that they never bully private enterprises as well as shareholders. The settlement on Skytrain purchasing will be concluded by the end of 2004.
This 45% debt cut enables the government to purchase the debt along with the interest at 21 billion baht while the government will purchase 50% of registered capital of 18 billion baht (9 billion baht) as well as the commercial debt of 3.8 billion baht. The total purchase will be 33.8 billion baht.
Minister Suriya grilled Mr Khumroblux that he should not invite Mr Khiree and BTSC Board of Directors to the first meeting for BTSC nationalization on July 13 since the Nationalization Board should discuss the scope of the government plan to nationalize BTSC and BMCL before inviting BTSC and BMCL to discuss with the government. This mistake enables Mr Khiree to tell the press that the "Government is bullying BTSC!"
Wisarut notes: The Government's bullying method of nationalization has already bred a sense of distrust here (in Thai).
Ms Paveena Hongsakul told Thonburi people during the opening of the Gubernatorial Election Center in Bangkok Noy that she is ready to work with all the parties if she becomes BMA Governor.
She will push the Skytrain and Subway extensions to Thonburi very hard to be ready for service in four years. Furthermore, the Floating Market along Bangkok Noy canal as well as other floating markets in Thonburi will be promoted. The cultural communities in Thonburi will be promoted as well.
A tale of two newspapers: Buying the Skytrain
- July 14, 2004
The English-language press is finally reporting the controversy concerning the Skytrain takeover that 2Bangkok.com has been mentioning for several years. One headline has BTS 'blasting' the bid and the other has BTS 'cautious.' As usual, The Nation presents the story with an anti-government slant, but its report most closely matches the way this story has long been reported in the Thai-language media. The Bangkok Post puts the best face on the story by reporting everyone's comments at face value and even points up the government's lofty goals in expanding the network. However, running the quote, 'The state will not force the issue...' without mentioning the actions taken against the Skytrain and reported in the Thai-language press at length can only be described as outrageous.
BTS boss blasts takeover bid - The Nation, July 14, 2004
...In its strategy to solve the traffic problem, the government is resorting to hardball tactics to seize control of both mass transit projects. It would like to buy out both the Skytrain and the subway before merging them together. Then it would make further investments in the expansion of their routes to cover more of Bangkok...
The government reportedly threatened to stop BTS from making new investments to expand its routes unless it sells the Skytrain.
Skytrain firm cautious over buyout plan - Keeree: `I deserve some credit as well' - Bangkok Post, July 14, 2004
The Bangkok Mass Transit System, operator of the Bangkok skytrain, has expressed reluctance to state proposals to take over the project, with executives saying that the firm expected to sign a debt-restructuring agreement with creditors within the next five weeks.
The government has floated an idea of buying out BTSC's 25-year skytrain concession as part of a plan to integrate operations with the new subway system...
"What have I done wrong? I am a good man, a good guy. I deserve some credit as well,'' he said following a meeting yesterday at the Finance Ministry...
Mr Utid said the government would not apply pressure to take over the company. "Any talks to repurchase the BTS concession must be based on the law. The state will not force the issue, but rather use the principle that the seller must be willing to sell at a fair price.''
He said the government was convinced the mass transit system should have a single operator to maximise convenience for passengers.
The government wants to expand the total mass-transit rail network by another 291 kilometres. BTSC operates just 24 kilometres of track in central Bangkok.
Authorities hope to expand the skytrain across the Chao Phraya River to Thon Buri, as well as to the east toward the new Suvarnabhumi Airport and to the outer suburbs.
BTSC says no to the government's plan to nationalize
the Skytrain - translated and summarized from Manager Daily, July 13, 2004
After the meeting with the BTSC Board of Directors, the Nationalization Committee found that the BTSC Board headed by Mr Khiree Kanchanaphak rejects the proposal offered by the government to buy back BTSC. The company has worked so hard to deal with financial problems and now the company is back on its feet and ready for extensions even though it still has to shoulder 40 billion baht debts (US$ 1 billion). The company is planning to sign a restructure plan with creditors in the next five months. Therefore, the company disagrees with the government trying to buy back debts back as a way to take over the company.
The Deputy Permanent Secretariat of MOF says they have not signed any deal with creditors yet since the committee has to deal with the 1992 contract first. That contract has legal requirements the approvals from both the government (purchasers) as well as the private sector that owns the project.
Satirical comment from Than Setthakij: 'Hot
Issues' by Ung Thong - translated and summarized from Than Setthakij,
June 27-June 30, 2004
Minister Suriya to Mr Pliew: "If you agree to sell BMCL stocks to the government, you'll become the winner of the Subway expansion contracts." A Fraussian deal indeed... However, this kind of promise can be broken if ITD competes against Ch. Karnchang.
Five Skytrain stations (Saladaeng,
Phromphongse, Saphan Kwai, Victory Monument, Siam) exceeding noise
limits - translated and summarized from Matichon, May 31, 2004
The Director of BMA Environmental Quality Control said noise around major Skytrain stations exceeds the maximum limit of 70 dB in all sections (platform, ticket and downstairs) even in non rush hour periods. The rush hour periods are even noisier definitely causing those who live and work along Skytrain tracks for a long time to experience hearing problems. This due to the structure which reflects noise and bounces it inside the station area without spreading it out to cut down the noise. The buildings around the stations are also good sound reflectors.
BMA is now asking BTSC to install noise absorbers to ensure that the noise will be reduced below 70 dB limit all times. However, the company declined to do so since the claim that they have measured the noise and found that the noise has never reached the 70 dB limit. Noise is one of major complaints of Bangkokians to the BMA Office thus BMA may have to force BTSC to comply.
More BTSC Park and Ride
- translated and summarized from Khaosod,
May 28, 2004
The BMA Civil Works Office said they are going to develop 6-rai of the old Morchit Bus terminal into a full-fledged Park and Ride--not just the temporary parking it is right now. Furthermore, BMA is planning to construct anther park and ride at National Stadium, but they have to negotiate with the landlords. After the Samrong extension becomes a reality, a new park and ride at BITEC and Samrong will follow soon.
[Ed.: This apparently means an end to the long attempt to lease the land to create another major shopping center--see Sun Estate's Mor Chit development]
'agreed to sell its skytrain loan' - The
Nation, May 31, 2004
The Transport Ministry has moved a big step closer to its goal of taking control of the skytrain system by striking a tentative deal last week to buy out the operator's major creditor at a 40-per-cent or more discount, a source said...
Plan for further discounts for the 30-day Skytrain
student pass - translated and summarized from Thairath, May 28, 2004
After getting the message from the government about further discounts for students who ride the Skytrain, Mr. Anat Abahbhirom (Adviser of the BTSC Board) said BTSC Board will have a meeting with the Traffic Policy Office next week to discuss further discounts for students with the following scheme:
1) The time period of the day to offer the discount
2) The discount rate from 10-40 baht regular rate a single ticket
3) Subsidies to cover the discount
In principal, this kind of discount is possible since it is one of many measures to encourage more mass transit usage to cut traffic jams.
The 30-say student passes are very popular and the 30-trip type (360 baht) sells better than the other types of discount. There 160,000 students who ride Skytrain each one day from the total of 380,000 passengers a day.
However, only regular customers are willing to pay for 30-day passes. The further discount will encourage those casual customers to ride the Skytrain.
The Nation covers mass transit controversy
- May 17, 2004
The Nation features two articles about the government buyout of the Skytrain (ANALYSIS: A twisted route for railway systems and SKYTRAIN: BTSC slams move to buy creditors). Previously, information on mass transit controversies were only available in Thai-language papers (and 2Bangkok.com). The Bangkok Post is usually the paper that covers mass transit and development, but they have more generalized articles that steer clear of controversial issues.
Only dire circumstances will compel BTSC to sell the stocks to the government. So far, the government has not come to have a discussion with BTSC.
So far, the debt restructure is going very well and the plan will come out in June 2004 - and BTSC is planning to offer an IPO in 2005.
Nationalization of BTSC and BMCL is against the government's privatization plan. The government should never meddle in profitable private enterprise. This nationalization is a plan to fool confused people that they can get a mass transit system at very cheap price which usually ends up like SRT railway and BMTA bus systems.
If the ticket prices are too high, the people will refuse to ride and the market will readjust the price to keep the passenger numbers high enough for making a profit. Only those at the Traffic Policy Office and MOTC have planned such scheme, but not the government. BTSC also does not acknowledge whether Minister Suriya has discussed with creditors about the takeover plan.
BTSC feel convinced that more than a half of shareholders refuse to sell the stocks to the government since BTSC Skytrain is going very well with nearly 400,000 passengers a day with a daily revenue of 8 million baht.
Governor: "Samrong-Taksin extension speed up plans dim chance to
nationalize Skytrain" - translated
and summarized from Than Setthakij, April
[Ed.: The Skytrain extensions have been halted as political bargaining chips for years now to put pressure on the Skytrain company to sell out. While this is well-known in the Thai-language press, the English-language press has chosen not report it. Our Skytrain Extensions page is packed with info from the Thai-language press about the extensions.]
MRTA Governor said pushing hard on Samrong-Taksin extensions will make the nationalization of Skytrain difficult since it push the price upward since the creditors and shareholders could see more profit ahead and refuse to sell to the government at any price. The change on investment form violates 1992 Joint Venture Act [This is in reference to the terms of the original Skytrain project requiring 100% private investment. The extensions will utilize government money in the form of funds from BMA. This is especially necessary for the Taksin extension since that extension was built on BMA piling originally to be used for an elevated motorway.]. Furthermore, MRTA is asking the Constitution Court to redefine the authority of BMA.
The BMA proposal to change the investment form of 9.502 billion baht Taksin-Samrong extension is very inappropriate since it pushes the price up making it hard to nationalize the project.
He wonders who in BMA is pushing this project forward since it reduces the government leverage on nationalization to buy the project at a cheap price and changes the minds of creditors and shareholders to not sell the project or to sell at a very high price which is unfair to the people.
If BMA is pushing forward, it will please BTSC [the Skytrain company] since it will help BTSC to become profitable and no other companies would come to compete with BTSC since the extension is a few kilometers long (total 11.1 km) and unworthy for others to invest in at all.
The change of investment form will violate the old contract since the old contract has no provision to allow such a change and it violates the 1992 Joint Venture Act.
Therefore, MRTA will ask the government as well as the administration to redefine the authority of BMA and force BMA to surrender BTSC Skytrain to MOTC or the Traffic Policy Office.
Commentary by Wisarut: The level of suffering from those who live in the Bangna-Samrong area and Thonburi makes such arguments total nonsense. This kind of obstruction has revealed the hypocrisy and insincerity of the government (and even MRTA) in that they expect to get the project at a very cheap price instead of helping the people. TRT should expect to lose votes from those who live in the areas impacted if they still obstruct the extension projects until they can grab the projects to please their own interests.
nationalization plan bogging down - translated
and summarized from Matichon, April 14,
Even after negotiation with KfW officers (such as Herr Rudolf Richmuller - deputy Senior Chairman and Director of Special Asset Dept of KfW) and successfully cut BTSC debts by 40%, MOTC still wants to make further cuts of 45-55% so that they can explain to the public that the price the government pays for BTSC is a very good price. The settlement with KfW and other creditors well be done by the end of May 2004--after a visit by the head of KfW.
The price to pay for BTSC debt will be 23 billion baht and the total price to pay for BTSC will be 30-35 billion baht after including stocks.
BMCL is much more difficult due to the fighting between the government and CH. Karnchang PCL--so difficult that they have to wait until the settlement of BTSC debt. The controversial Southern Ring Road is also a major cause of trouble since a BMCL shareholder is the one who was involved in building the Southern Kanchanapisek Ring Road project which had its bid canceled by Suriya--thus the fighting will drag on.
vows to bypass the government: Either 15 baht/share for BTSC stock or
an IPO to get 6-7 billion baht for Taksin and Samrong extensions
- translated and summarized from
Than Setthakij, April 11-14, 2004
BTSC (the Skytrain company) told the government that 15 baht/share is a fair deal for the government--if not they will have to the Supreme Court to deal with stock matters. If they cannot make a deal BTSC will offer an IPO to gain 6-7 billion baht for the Samrong and Taksin extensions.
Mr. Super K (Kasem Jatikawanit) will be the negotiator and he feels very suspect about the government move to make direct negotiations with German creditors instead of negotiating through BTSC. This kind of move implies that the government plans to make a hostile takeover of BTSC with consent from the creditors.
15 baht/share is a fair deal since the price will zoom up once BTSC offer an IPOs. Cheaper prices would need a court settlement.
The government should haven taken over BTSC after the 1997 economic meltdown instead of taking it over when the company becomes profitable. The government should praise BTSC for the ability to weather the economic storm to become profitable without government assistance.
The plan to buy back the debt while the situation is still in limbo will cause indefinite delays on Skytrain extensionss. Even without extensions, the company has 7-8 million baht daily revenue. BMA is going deal with basic infrastructure, but they cannot declare the winners of the takeover plan.
By the end of 2004, BTSC will offer an IPO to capitalize 6-7 billion baht for the Onnut-Samrong extension (8.9 km). For the Taksin extension (2.2 km), they company will use 2 billion baht savings to invest on this section.
BTSC has 7 million baht revenue with average daily passengers of 400,000. The debt restructure will add more revenue and profit to pay the debt from 4-5% increase of passengers. The smart card ticket system will be issued to deal with the MRTA subway.
Even though BTSC has successfully cut the debt by 35%, the government said they can cut down the debt at 40% and plan to cut even further to 55% so that the price to pay for purchasing BTSC is 30 billion baht. BTSC is negotiating with creditors to cut down the interest rate from 2% to 1.75%.
Earlier: More on buying the Skytrain - Thairath, April 7-8, 2004
Earlier: The nationalization plan of BMCL and BTSC is good for the country - Siamturakij, April 4-11, 2004
Earlier: Suriya boasting that negotiations with Skytrain creditors successful - Thairath, April 7, 2004 and Manager Daily, April 7, 2004
And Bangkok Post has the response to this: Skytrain chief lashes out at takeover talk - Demands state deal with BTSC directly - Bangkok Post, April 8, 2004
Earlier: BMCL would sell the subway at 35 billion baht to reap 200% profit - Prachachart Thurakij, April 1, 2004
Earlier: More on buying the subway - Government counters 300 baht per share offer by offering to pay 1 baht per share
Suriya boasting that
negotiations with Skytrain creditors successful
- translated and summarized from Thairath,
April 7, 2004 and Manager Daily, April 7, 2004
Minister Suirya said that the KfW Board of Directors are coming to Thailand to negotiate with MOTC about further debt cutting--after 35% cutting of the BTSC debts from KfW (26.16 billion baht) has been agreed. Even though KfW said they can write of the 40% of BTSC debt owed to KfW, MOTC wants 55% cut. Therefore, further negotiations are necessary to reach a final settlement.
BTSC has owned the debts to the following creditors:
|KfW - 26.16 billion baht
IFC - 2.68 billion
SCB PCL - 6.080 billion
Thai Asset Management - 3.28 billion
|Siemens (Thailand) Co.Ltd. - 4 billion
ITD PCL - 0.76 billion
Other creditors - 1 billion
The shareholder stocks: 12.16 billion baht
MOTC also asks MRTA to respond to letters from Ch. Karnchang PCL that "MRTA has full right to purchase their stocks at par no matter that Ch. Karnchang has claimed that MRTA has already forfeited their right to do so. MRTA has very good reasons to purchase BMCL at the government's specified prices."
And Bangkok Post has the response to this: Skytrain chief lashes out at takeover talk Demands state deal with BTSC directly - Bangkok Post, April 8, 2004
Beyond the Skytrain - The Nation, April 2, 2004
Carleton Cole writes an atmospheric piece on the world at the end of the Skytrain route.
Government feeling confident about purchasing
the Skytrain concession from the private sector
- translated and summarized from Manager Daily,
March 18, 2004
[Ed.: The Nation has a version of this article (RAPID TRANSIT: Govt to buy Bt38 bn of BTS debt, March 22, 2004) which is a slightly generalized version of this.]
Minster Suriya said after the meeting with BTSC creditors about the plan to nationalize BTSC that the major creditors agree to write of at least 35% of debts (13 billion baht from 38.32 billion baht). However, the government wants to write off more debts so that the government can purchase BTSC at a price of not more than 30 billion baht. So far the creditor have estimated the price of buying the BTSC system at 56.08 billion baht (The total debts of BTSC is 56.08 billion baht).
The government will go to Germany from March 29 to April 9 to negotiate with KFW about the plan to cut down more BTSC debts--this is expected to be done in June 2004. The BTSC stocks sold to the government must be lower that the par price of 10 baht/share. This will help to cut the costs for nationalization and make the negotiation with BMCL easier.
Furthermore, the joint ticket system between BTSC and BMCL will be possible with fair rates and not create a burden on the government since the government is going to accept BTSC workers to work with MRTA.
Furthermore, MOTC is asking MRTA to extend the free ride period from April 13 to June 2004 since the government is going to implement a joint ticket for the integrated system. Debt clearing after nationalization will cause too much of a debts burden on the government.
|There are 3 section of BTSC debts
with a total of 56.08 billion baht:
1) Debts from financial institutes: 38.32 billion baht
1.1) KFW - 26.16 billion baht
1.2) Siam Commercial Bank PCL - 6.08 billion baht
1.3) Thai Asset Management Co.Ltd. - 3.28 billion baht
1.4) IFC (World Bank) - 2.68 billion baht
2) Debts from Trading: - 5.76 billion baht
2.1) Siemens (Thailand) Co,.Ltd.
2.2) Italian Thai Development PCL.
|3) Other Debts: 1 billion baht (held
28.21% Thanayong PCL
17.27% CTF Resources
12.67% Credit Suisse First Boston ( Hong Kong)
10.46% Italian Thai Development PCL
3.82% Citibank Nominees Singapore
3.13% Land and House PCL
2.70% Chase Manhattan Trustees
2.59% Man Ping Holdings
2.08% B.Grimm Group
2.08% Siam Commercial Bank PCL
The comment on this issue can be seen at the Manager site.
asked to clear debts before selling itself to the government in August
2004 - translated and summarized from Manager
Daily, February 29, 2004 & Thaipost, March 1, 2004
Minister Suriya said MOTC is negotiating with BTSC about the nationalization plan which should be done by August 2004. However BTSC has to negotiate with KFW, Siam Commercial Bank and IFC (World Bank) since the debts of BTS are still high. He afraid that nationalization of BTSC is considered as "the big bailout" which is not a good thing. MOTC must be able to explain the public how they are going to deal with the business.
So far, there is 38 billion baht debt being held by the three major creditors -> 32 billion baht in principle and 6 billion baht in outstanding interest. So far, creditors have cut down the principle by 2 billion baht and outstanding interest by 6 billion baht and there is still have 30 billion baht outstanding. 30 billion baht debt will be converted into equity by 6 billion baht. The other 14 billion baht will be paid in 18 years from the current plan of 12 years.
For BMCL, the plan to sell the company will come out in the next three weeks. However, MOTC still insists that they have right to buy 25% of BMCL stock at par--not at premium as BMCL claimed.
Commentary by Wisarut: Since BTSC is not tied to Thai Rak Thai [the ruling party], those from Thai Rak Thai feel very reluctant to bail the company out. They just refuse to bail the company out of trouble unless they sell their stake to TRT members, but they want the debts cut so they first.
agreeing with plan to nationalize the mass transit system - translated
and summarized from Than Setthakij, Vol.
24 No. 1882, February 26-28, 2004
Khiree agrees to sell BTSC stock to the government as the way to help people to use the Skytrain-Subway system with convenience since he saw the determination from Premier Thaksin to deal with mass transit system integration and expansion. However, it will take time to settle the deal with the government.
Siam Syntech said it is up to the decision from Ch. Karnchang PCL to deal with the project. The government wants BTSC to clear the balance sheet before adding more capital and the government will purchase new stock which boosts BTSC capital before merging with BMCL.
BECL (subsidiary of Ch. Karnchang) said the private sector will do their best to help the system integration. If the stocks are to be purchased at very good price, they will sell.
So far the creditors of BTSC are voting for Thanayong to come up with a debt restructure plan (defeating the planners from the creditors) with 54% for Thanayong vs. 46% for Silom Planner (set up by Peregrine Fixed Income Limited -> the 95th creditor of BTSC and Credit First Boston (Hong Kong) -> the 66th creditor). Mr Khiree said his planner will proceed with their plan to cut debt to make everybody happy.
BTSC is in the second rehabilitation process from August 18, 2003--due to the 39.388 billion baht debt (27.939 billion baht in outstanding principle and 11.449 billion baht outstanding interest).
Stock allocation consisted of:
45% Major Foreign Creditors (Credit First Boston, KFW, World Bank, foreign funds)
23-24% Major Local Creditors (Bangkok Bank PCL, Siam Commercial Bank PCL, Bank Thai PCL)
The other are small creditors.
For the case of BTSC, the government will purchase stock to boost the capital of BTSC as a way to nationalize the system--after converting much of the debts into equity.
MRTA helping force BMCL
to sell stocks at par - translated and summarized from Thaipost, February 7, 2004
Minister Suriya said MRTA Governor has reported that MRTA has the right to purchase BMCL stock back at par since MRTA has issued the letter to confirm that MRTA has reserved the right to do so and the company has no objection to the plan even though BMCL said MRTA has forfeited the rights to purchase BMCL back since they asked after the expiration date (August 1, 2001). Minister Suriya said he will not put this issue to the mediators which would rule in favor of Ch. Karnchang PCL.
The government is also planning to purchase BTSC for the system integration. This will maximize the public interest by cutting traffic jams. Suriya is ready to explain this issue to the public to show that the government has no hidden agenda. The purchase of BTSC is a plan to enable system integration through the nationalization and 400 billion baht public investment to ensure that the system covers all parts of the city.
Ch. Karnchang said the government has forfeited their right to purchase stock back at par, but Ch. Karnchang still allows the government to purchase stock at market price. At minimum, the government has to pay the company more than 10 billion baht in cash to purchase BMCL back.
Commentary by Wisarut: For the case of nationalization, the government should allow Krungthep Thanakhom as well as the local government to participate in this scheme since the BTSC concession was issued by BMA. Otherwise, many people will still suspect that the government has a hidden agenda since MOTC denies the right of the local government to join the system integration scheme.
BTS waiting for the
government to approve Skytrain extensions -
translated and summarized from Thairath,
February 2, 2004
[Ed.: The English-language papers blandly announce the Skytrain is "ready" for an IPO and new routes while Thai language papers explain BTS cannot do anything more on the Taksin and Samrong extensions without cabinet approval--approval the government has repeatedly shown they are not willing to give to a company associated with opposition parties.]
Mr. Anat Abhabhirom (Chairman of Advisers in the BTSC Board of Directors) said after the successful debt restructure, BTSC is going to offer an IPO to finance the extensions. Samrong Extension (8.9 km) need at least 6 billion baht to install signals and 10 sets of new rolling stock.
BTSC has a daily revenue of 7 million baht--3 million baht profit a day. For the Taksin Extension (2.2 km), BTSC will invest in this section immediately. On the other hand, BMA is working on the infrastructure which will take three years to be done for the Samrong and Taksin extension--long enough to get fund to handle the project.
The company expects 20,000-30,000 more daily passengers from the Taksin Extension and another 50,000 more daily passenger from Samrong Extension. However, BMA has to wait until the cabinet allows BMA to invest in this project. The longer waiting period will delay the opening date further. BTS is waiting for BMA to finish the construction of the stations and to install signals and systems.
The ticket prices for Taksin extension will be frozen due to the short distance and the company has invested from their own pockets and use the existing rolling stocks.
However, BTSC implies that the ticket price for Samrong extension need to be increased to the cap price (45 baht) to cover the expense of this section which goes across the Bangkok-Samut Prakarn boundary line. Furthermore, BTSC has not change the ticket prices for about four years even though the concession has allowed BTSC to readjust the ticket price in every two years according to the inflation rate. However the change of ticket prices requires negotiation between BTS and BMA.
Earlier: Skytrain debt deal: BTS ready for listing, more routes - The Nation, January 31, 2004
..."The company's employees are not sure why the government wants to take over its operations, since the company is being run well and the plan goes against the government's policy of privatisation," he said.
And in the Post. Both papers skirt the point that extensions are actually on hold until the Skytrain sells out to the government.