[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
16, 2004
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
21, 2004
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,
2004
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]
KfW
'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.
The Skytrain--no need to be taken over - translated and summarized from Thaipost, May 11, 2004
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.
MRTA
Governor: "Samrong-Taksin extension speed up plans dim chance to
nationalize Skytrain" - translated
and summarized from Than Setthakij, April
25-28, 2004
[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.
Subway-Skytrain
nationalization plan bogging down - translated
and summarized from Matichon, April 14,
2004
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.
Skytrain company
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
by shareholders) 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.
BTS Skytrain
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.
BTS-BMCL
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:
33% Thanayong
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.