Bangkok Subway News 2001

Ministers are in Japan seeking loan
Bank likely to okay subway extension

Bangkok Post, September 28, 2001, by Supoj Wancharoen

Thai authorities have left for Japan to seek a loan to extend Bangkok's subway system from Hua Lamphong to Bang Khae. A source at the Mass Rapid Transit Authority said PM's Office Minister Somsak Thepsuthin and MRTA governor Prapat Chongsanguan went to Japan last week to discuss the loan with Japan Bank for International Co-operation.

The source quoted Mr Prapat as saying that he expected a soft loan with 0.75% interest, repayments spread over 40 years and a 10-year grace period. JBIC usually offered softer conditions for environmentally friendly projects like the subway, he said.

The MRTA governor was also quoted as saying that although the project would bear a small internal rate of return it would benefit the national economy especially with fuel savings. The economic internal rate of return of the Hua Lampong-Bang Khae extension was put at 14%.

Minister Somsak, who supervises the MRTA, and Mr Prapat would also inspect Kumagai Gumi Co, the firm which supplied the tunnelling machines. The machines can do their work without disturbing the ground surface. This would benefit the extended route, which passes under Ratanakosin Island.

The route is 13.8 kilometres long and likely to cost 41.4 billion baht. It would add to the first-stage subway, 20km from Hua Lamphong to Bang Sue, that could open late next year. The MRTA has sent its extended route plan to cabinet for approval.

Japanese ambassador Nobutoshi Akao said last week that JBIC was likely to approve a loan. JBIC, he said, had already financed the first stage and should stick with the project because the extended route would make the whole subway viable.

MRTA meeting with JBIC to confirm the loan for the southern extension from Hua Lamphong to Bang Khae
Dailynews, September 28, 2001

MRTA is inviting Minister Somsak to see the JBIC director to get confirmation of the loan for the southern extension of Blue Line (Hua Lamphong - Bang Khae) and inspect the new drilling heads which render surface digging unnecessary.

Minister Somsak Thepsuthin (Minister of PM Office), Mr. Praphat Jongsanguan (MRTA Director) and other officers were going to Japan on September 25. For that trip MRTA director told the correspondents that Minister Somsak is going to the World Tourist Expo in Japan, so he invited Minister Somsak to go with him to Osaka to see the JBIC CEO and ask for the confirmation on the loan for Southern extension of the Blue Line. The loan should have the same loan conditions as the initial section--40-year repaying period, 0.75 % annual interest rate, and a grace period for the first 10 years. According to unofficial discussion, JBIC said the institute is willing to support the extension, but this time MRTA wants to see the confirmation since MRTA has submitted the plan for Southern extension to the cabinet. Even though this extension is not financial viable (less than 10% financial return), the project have more than 14% economic return since it reduces oil bills, and supports the government campaign to cut down fuel consumption.

Furthermore, he will invite Minister Somsak to see the construction of subways in Japan which will use the new type of drill head which does not require "cut-and-cover" construction at all, rendering road disruption unnecessary. Even though such drills are VERY expensive, they are suitable for working in the city center.

MRTA Extension Update
August 20, 2001
Wisarut reports: I have news from MRTA that the MOF and NESDB said they would not approve the MRTA southern extension even though MRTA desperately wants to build it. MOF and NESDB said they should allocate the budget for the other priorities even though MRTA is trying to convince both MOF and NESDB that the Southern extension is economically worthy since it would save billion baht in crude oil importation and cut down the pollution in the city center.

Subway train extension proposal rejected
Bangkok Post, August 14, 2001

A proposal to extend the Bangkok subway system has been rejected because financial returns for the state are considered too low. The Finance Ministry and the Budget Bureau refused to endorse a 30-billion-baht plan by the Mass Rapid Transit Authority to stretch the subway by eight kilometres from Hua Lampong to Bang Wa, Thon Buri.

``The Finance Ministry and the Budget Bureau want the MRTA to review the financial returns for the state because they consider the present figure as too low,'' said MRTA governor Prapat Chongsanguan. He did not give the figure. He said such mass transit projects usually yield low financial returns but the economy benefits in terms of faster travel and lower fuel consumption on roads. He informally discussed the extension project with Japan Bank for International Co-operation, which agreed to finance it.

Consultants plan to make city 'liveable'
Offices, green areas, parking near stations
Bangkok Post, August 3, 2001, by Supoj Wancharoen

The city's new subway train stations could be greened and the immediate surroundings developed to make Bangkok a more " liveable city", a British consultant firm has proposed. Development is initially recommended within a 500-metre radius of each underground station, said Brian Weavin, Mouchel's project manager. Siting parking lots, green areas, residential units, offices and shops near stations would make travel more convenient for locals. "As a result, the mass transit system would create a liveable city," he told a seminar at Queen Sirikit Centre.

Sakda Thong-urai, a Mouchel city planner, said it could all start in the compound of each subway station, and expand later if the Mass Rapid Transit Authority could acquire surrounding land. Hua Lamphong station should be left untouched, apart from a parking lot, until 2011.

Sam Yan station should have shops, a parking lot and an advertising area. Apartments and quality offices should emerge around the Silom station after 2011.

Commentary: Chulalongkorn University should revive the abandoned Chula High Tech Center, with larger parking lots and apartments for Chulalongkorn University students. For Silom, they should be able to turn the buildings of defunct financial institutes into quality offices in no time.

At the Lumphini station, there should only be a parking lot, advertising areas and shops until 2011. Bon Kai station should be surrounded by shops and advertising until 2006 before any high-rise residential units were built.

Commentary: The Royal Crown Property--the owner of the area that was Cadet Preparation Academy--should turn the area into a public park next to Lumphinee park before constructing a parking lot, high-rise condominiums and apartments, and other commercial buildings. For the case of Bon Kai, MRTA should help the people in Klong Toei neighborhood to set up a new community not far from the Port Authority of Thailand before asking the Port Authority to evict the people in Klong Toei neighborhoods to set up high-rise condominiums.

Sirikit station should have a food centre, a bus terminal and shops. A parking lot, advertising areas and small shops would suit Sukhumvit station well until 2011.

Commentary: Asia Park has set a new parking lot from the abandoned building near Asok station. However, it would be much better if MRTA could help Asia Park to construct a park and ride facility to enable those who live around Asok-Sukhomvit area to park their cars.

Petchaburi station should have nothing but a car park and advertising areas until 2006. A food centre and a convenience store could be added by 2011. An office building and a shopping mall should be the last thing on the books.

Commentary: So long that those who study at Srinakharintharaviroj Prasarnmit could go shopping at Emporium, Central Chitlom or so on, a shopping mall is unnecessary.

The Rama IX station should have advertising areas, a parking lot, shops and a green area.

Commentary: This area has Fortune town, so a park and ride facility is necessary.

Advertising areas, parking lots, food centres and shops are recommended at the Thiem Ruammit and Pracharat Bampen stations. Suthisarn station should have shops while the Lad Phrao station should be surrounded by a parking lot, a supermarket, billboards and office space.

MRTA governor Prapat Chongsanguan said the consultants also suggested fare discounts of 5-10 baht for commuters catching both the subway and buses under a park-and-ride scheme.

The MRTA hired Mouchel for 72.8 million baht to advise it on building subway-related facilities and feeder bus routes to serve the subway system.

MRTA's plan for more subway passengers--remove aircon buses from subway route
Dailynews, August 2, 2001

During the discussion of the plan to connect mass transit systems with the MRTA Subway, MRTA asked BMTA to remove air-conditioned buses from MRTA routes while allowing only the regular BMTA buses (3.50-5 baht) with a 5 baht discount when they buy subway tickets. If BMTA accepts such a proposal, it will boost the number of passengers by 40%.

OCMLT and MRTA set up a seminar headed by Mr. Somsak Thepsuthin (Ministry of of Prime Minister Office) about the study and design of the MRTA facility project to ensure convenience for connecting the subway with other mass transit systems and the land development plan along the blue line subway and future extensions. MRTA hired Mouchel Consulting Co.Ltd. as a consultant company which delivered the preliminary results of their study which consists of six parts:

1. Masterplan for MRTA facilities for connecting the transportation and the land development along the MRTA route, and the identification of significant subway stations for first phase development (Mochit, Asok, Silom, Queen Sirikit, Hua Lamphong, Bang Sue, and Tiem Ruam Mit are all critical stations which deserve first phase design and development)
2. Principle design for the facilities to connect to other modes of transportation
3. Studies and suggestions to reroute busses along subway tracks
4. Selection of facilities and land development along subway routes
5. Final design of the transportation facilities
6. Economic and financial analysis along with the analyses on the management structure of the organization, relating laws, and service plans

The preliminary plan states that MRTA must connect the subway with the BTSC Skytrain, BMTA buses, Bangkok taxis, and the commercial buildings and department stores by creating small communities around the subway stations to boost the number of passengers. MRTA will have a connecting ticket system to connect the subway with the Skytrain. Only regular buses would go along the subway routes, with a 5 baht discount if BMTA passengers use their tickets to buy MRTA tickets. For connections with Skytrain and Subway, MRTA will make 10 baht discount for Skytrain passengers. If the implementation of connecting systems becomes successful, the number of Subway passengers will be boosted by 5% from the estimated 240,000 passengers a day which will eventually become a 40% increase in the future.

MRTA Director said the final study results will be done in February 2002. After that, the results from the final study will be implemented as the main plan to get the approval from relating agencies.

MRTA plans connections to Skytrain and discounts for riders
Matichon Daily, August 2, 2001

Mr. Somsak Thepsuthin (Minister of the Prime Minister Office) headed the MRTA-OCMLT seminar on study and design of the facilities to systemically connect the subway with other modes of transport. There were 200 in the audience from the public and private sectors.

Mr. Praphat Jongsa-nguan (MRTA Director) hired Mouchel Consulting Co.Ltd. to study the blue line subway. The study will cover land development around the subway stations, the connecting system to connect the subway with other modes of transport, and more park and ride facilities to cut down private car usage. The study was started in September 2000 and will be done in February 2002.

Mr. Brian Veevin, (Project Manager of Mouchel Consulting Co.Ltd.) said that the company will do its best to deal with the project by taking into consideration the conservation of the environment, cultural heritage, security and stability. At the same time, the facility masterplan must maximize transportation convenience. The plan will emphasize on the facilities, housing, employment sources, public transportation systems, and commerce along the subway route to attract more passengers, reduce traffic congestion, and cut down pollution from congestion. After the subway becomes a reality, the government will have to prevent air-conditioned busses from running along subway routes while allowing ordinary bus passengers a five baht discount if they use their tickets to connect with the subway. Those who use the Skytrain will be eligible for a 10 baht discount if they connect with the subway. Both discounts will result in 15 baht discount to boost subway ridership.

Mr. Nikhom Vaiyaphanit (Director of BMA City Planning Bureau) said that MRTA should never let the private sector rent space for commercial development or it will create uncontrollable chaos which have detrimental effects on the city. MRTA should issue the private concession instead so as to have full control of commercial activities along the MRTA route.

MRTA Director said that MRTA has bought the subway system produced by Alstorm-Mitsubishi Co.Ltd. and the concession holder (BMCL Co.Ltd.) is preparing for the assembly of the rolling stock.

Ratchada-Lad Phrao Flyover to be demolished on July 5, 2001 [Note: As of July 26, 2001, the demolition still has not started.]
Delayed for the second time
Thairath, June 18, 2001

MRTA Director Praphat Jongsa-Nguan said that MRTA can deal with the demolition cost even though BMA decided not to pay 300 million baht to MRTA for the demolition and reconstruction as they originally agreed. The Traffic Committee created the original agreement that BMA (owner of Ratchada-Lad Phrao Flyover) would have to pay MRTA for the flyover demolition and at that time Samak (presently Bangkok Governor) was a Deputy Premier and the Head of Traffic Committee [the irony being that Samak was head of the organization that made the ruling on the flyover costs and now that he is head of BMA as the city governor, he is not following his own ruling]. BMA will need to ask Traffic Committee to repeal the solution which asked BMA to pay for the demolition costs.

The MRTA director said the flyover demolition will move from June 20 to July 5, 2001. The western section (outbound section from Suthisarn Road to Criminal Court) will be removed first. MRTA will ask the contractor to install the signs to tell the Bangkokians to avoid the outbound section. The contractor will construct a 2-lane detour on SRT land parallel to the flyover. It will take 82 days before the demolition of the inbound section. MRTA asks the people to forgive MRTA for any inconvenience in traveling along Ratchadaphisek Inner Ring Road.

On June 15, 2001, OPM Minister Somsak Thepsuthin was a head of the subway rail installation ceremony at the mouth of the tunnel connecting the subway with the MRTA Depot. MRTA has hired CKSL (Ch. Karnchang - SN Lavalin, a joint venture) to handle the track installation with a budget of 3.0195 billion baht and a total distance of 60 km - 44 km in the tunnels and 16 km in the MRTA Depot. The project is 52.07% done in May 2001.

MRTA forcing BMCL to conclude the loan by the end of this month
Otherwise MRTA will cancel the BMCL deal and call a new bid
Prachachart Thurakij, June 12-14, 2001

MRTA feels that the initial subway service will not be able to start on December 5, 2002, so it has decided to force BMCL to sign the contract with JBIC and other creditors and start the production of the rolling stock by the end of June 2001. Unless BMCL concludes the loan by the end of this month, MRTA may borrow from JBIC itself, call a new bid for a new private concession holder, or ask other to run the services unless . The head of the MRTA Board said it is a very serious matter indeed.

BMA refusing to pay for flyover demolition
MRTA claims BMA is not following the rule of law
Dailynews, June 15, 2001

BMA is refusing to pay for the Ratchada-Lad Phrao flyover demolition by claiming that they have no cash. MRTA is fighting back by saying that BMA is not following the Traffic Committee Resolution and insists that MRTA is going to pay for the demolition

Deputy City Clerk Mana Nopphan said that BMA will has NO budget for the reconstruction. Previously, BMA issued a letter to the government to review the payment. BMA would not participate in the process of demolishing and rebuilding the flyover since the demolition is a job for MRTA. BMA also does not have a space large enough to store the flyover. Therefore, it is proposed to sell the flyover to MRTA so that BMA will not have to deal with the cost for the storage of a flyover and the removal cost. The price for the demolished flyover is 20 million baht.

MRTA Director Praphat Jongsa-Nguan said there is no problem at all if BMA decides not to pay MRTA for the flyover demolition and reconstruction since MRTA is nearly done with the detour construction. However, he thinks BMA should make such a deal legal by asking the Land Traffic Committee to repeal the resolution [setting up the present plan - this resolution said that BMA would have to pay MRTA for the demolition and reconstruction cost]. The flyover has an abnormal structure [split into north-south lanes on either side of the road] according to engineering viewpoints and there are many road accidents in front of the Criminal Court. If BMA wants to ask MRTA to pay for the demolition, BMA must ask the Land Traffic Committee to repeal the resolution, and then MRTA will be able to pay 300 million baht for the flyover demolition without feeling disgusted with BMA. MRTA cares about the public safety even though nobody else seems to care at all. However, MRTA Director felt puzzled why the government set up Land Traffic Committee at the first place since many government offices are unwilling to follow the Land Traffic Committee Resolutions.

Traffic relief plan seen as not good enough
Supoj Wancharoen, Bangkok Post, June 20, 2001 [This article on the Bangkok Post site]

Traffic authorities are not allowing the Mass Rapid Transit Authority (MRTA) to remove the twin flyovers at Lat Phrao-Ratchadapisek junction because the proposed traffic relief plan is not good enough.

The MRTA plans to start removing the flyovers from July 5 to pave the way for the construction of underground stations for the Hua Lamphong-Bang Sue subway. Pol Col Yongyut Sarasombat, secretary-general of the Commission for the Management of Land Traffic, said the MRTA planned to create only two detour lanes in place of the removed flyovers. This would certainly not be enough to cope with the heavy traffic flow during peak hours in the area. He has instructed the MRTA to rent nearby land from the State Railway of Thailand and the private sector to increase the number of detour lanes to five.

The MRTA is also building four-lane underpasses at Huay Khwang and Suthisarn junctions to facilitate traffic flow on two Ratchadapisek crossroads. The underpasses were included in the tunneling work for the train subway. Outbound lanes from Huay Khwang to Ratchayothin of both underpasses will be opened to traffic in September and inbound lanes will hopefully be completed by the middle of next year.

BMA asks MRTA to use depot land as Chatuchak 3 for the 75th Anniversary of His Majesty The King
Samak negotiating with MRTA to allow use of 153-rai in the Huay Kwang area to create Chatuchak Weekend Market 3 for the Diamond Jubilee (75th Anniversary for His Majesty The King)
Thairath, June 15, 2001
Dailynews, June 14, 2001

Governor Samak Sunthoravet said he has a plan to construct a new market as the third branch of Chatuchak Weekend Market (the second branch is in Minburi) which will make a daily sale by using 153 rai of the western MRTA depot land near Pracha Uthit Road and Meng Jai Intersection. He will submit the project details of the new market to the MRTA Board in person on June 27, 2001.

The new Chatuchak Market would be separated into 4 zones such as the general store zone, the food center zone, the flea market zone, and the zone for the products from provinces outside of Bangkok. There will be about 3,200 blocks each 12 square meters, 4-meter-wide internal footpaths, and 6 to 8-meter-wide external footpaths. There will be a parking lot for about 800 cars. The budget for this new market will be about 500 million baht. BMA will let the private sector manage the market. This project will commemorate the 75th year anniversary for the His majesty in the year of 2001-2002, so the market will be named "Phet Sombhoj Market" (AKA Diamond Jubilee Market).

Director Praphat Jongsa-Nguan said that on June 11, 2001 Governor Samak met with him to discuss the land use at the MRTA depot. Governor Samak said BMA would sign a 5-year contract and then make another 5-year contract after the first contract expires. The area would become an internal trade center to attract more tourists who have very little time in Bangkok, and also a park and a sport area. However it depends upon the MRTA Board to make a decision on the area. In Samak's opinion, there should be no problem at all in allowing BMA to rent the area since the mentioned section is unused and it is in the area reserved for the Orange Line in the future.

Commentary: The new market is a good idea, but I don't know how to handle the mafia in BMA uniforms who have occasionally wrecked havoc on honest merchants who rent the blocks for trading. Furthermore, MRTA should draw an exact line as to which areas are prohibited from renting or making a commercial deal so that it will not create lots of headaches for the next MRTA director when they are looking for space for the Orange line or even the Green Skytrain when the Connection at Bang Wah becomes a reality.

More Commentary: Furthermore, it would be very nice to construct the Orange line from Minburi to Tiam Ruam Mit instead of constructing it though Rattanakosin Island (from Bang Kapi to Rat Boorana) to save money and pick up more passengers from the suburbs. The City center section will not be necessary if the Saen Saeb boat service, the Southern section of Blue subway line, and the Green Skytrain are in place (with a connection from the Bang Kapi Pier at Wat Sri Bunruen and Bang Kapi station, of course).

Somsak sending 40 billion baht southern MRTA extension to the Cabinet
Matichon Daily, June 11, 2001

Somsak and MRTA are pushing for a 39 billion baht MRTA Southern extension (Hua Lamphong-Bang Wah) and claim that study results show that the Southern extension is worthy to built as a traffic solution for the city center and could result in a 8.7 billion baht annual travel savings. The plan is for the government to deal with the civil work while the private receives the concession and runs the services. It is necessary to make land expropriation in five districts on the Bangkok side and four districts on the Thonburi side.

Matichon correspondents at Government House said that during the upcoming cabinet meeting on June 12, 2001, Mr. Somsak Thepsuthin (minister of OPM who supervises MRTA) is going to push for the southern MRTA subway extension. Mr. Somsak hopes that the cabinet will approve the project in principle and let the MRTA start it.

Last week, Mr. Somsak ordered Mr. Praphat Jongsa-nguan (MRTA Director) to collect information about the Southern extension before sending it to the cabinet. Mr. Praphat concluded that even though the current Thai economic downturn may slow down the project, the economic loss from traffic jams renders the construction of the southern extension viable. Therefore, the southern extension of the MRTA Blue line will solve traffic problems in the city center, boost the economy (both from construction, speedy services, and so on), while cutting down the financial burden on the government.

The southern extension (Hua Lamphong - Bang Khae) will be separated into two sections. The first one runs from Hua Lamphong to Bang Wah with a distance of 8.7 km and the second section from Bang Wah to Bang Khae with a distance of 5.1 km. The first section must be done first before the second section will follow.

The southern extension follows the advice from the latest report from the mass transit masterplan which says that MRTA will need to construct the southern extension from Hua Lamphong to Bang Wah in the period of 2001-2010. Furthermore, the traffic committee suggests that MRTA will need to design the details and construct at the same time to speed up the project.

Furthermore, MRTA has show the reasons that it is a necessary project and appropriate to invest in since the extension is a part of the mass transit system. MRTA has talked with related agencies and they said that such an extension is worthy to invest in since it matches the development strategy to connect transportation systems between the missing areas, solves transportation problems, and cuts down traffic jams in Thonburi along Phetkasem Road, the business centers in Yaowarat and Wang Boorapha, and the traveling posts in Rattanakosin Island (City Center).

Even though the project has a low financial return, the economic returns are high enough to invest on since it cuts down travel time and travel expenses by 8.7 billion baht a year. The economic investment rate of return (EIRR) of 12.2% makes it a worthy investment indeed. Furthermore, the extension will expand the mass transit network, boost the service efficiency of the Chaloem Ratchamongkhol Line (MRTA Blue Line) and allow it to reduce operating debt. The last but not least is the popular demand to extend the mass transit network to cover every corner of Bangkok.

Budget for Southern Extension
Public Section:
1) Land Expropriation - 3.357 billion baht
2) Consultant Company fee - 1.471 billion baht
3) Design and Civil Engineer fee- 22.771 billion baht
Total public payment - 32.599 billion baht

Private Section:
1) Design and install the rolling stock - 6.434 billion baht
Total private payment - 6.434 billion baht

Total public and private payment - 39.033 billion baht

Total route - Hualamphong-Bang Wah - 8.7 km - 7 stations
Subway (underground) section (Hua Lamphong - Issraphab) - 4.9 km - 4 stations
Skytrain (elevated) section (Tha Phra - Bang Wah) - 3.8 km - 3 stations

Schedule Date
Hiring the Consultant August 2001 - May 2002
Selecting the Contractor August 2002 - September 2003
Selecting the Concession Holder August 2002 - October 2003
Design, Construction, and Test the System October 2003 - September 2008
Opening for Service - October 23, 2008 (King Chulalongkorn Day)

The estimated daily passengers will be 140,000 a day.

The correspondents said Mr. Somsak has proposed four options for the cabinet to deal with the extension project:

1. The Cabinet should approve the southern MRTA Blue line project (Hua Lamphong- Bang Khae) for the Hua Lamphong-Bang Wah section. The construction should be designed and built at the same time. The government handles the civil work while the private sector handles the rolling stock and service according to the 1992 Joint-venture Act.

2. The Cabinet should approve the 30.771 billion baht budget for the civil work - 22% FOREX with the rate US$1 equal to 40 baht. The budget includes 3 billion baht extra for constructing the subway without disrupting the road surfaces. MOF will need to find financial resources with a long grace period or from other sources. The Budget Bureau will allocate budget for MRTA to pay back the principle and the interest according to the payment schedule until the MRTA has enough income.

3. The cabinet should allow the government to shoulder the payment for the consultant companies to deal services and the construction with a budget of 1.471 billion baht, 3.357 billion baht more for the land expropriation, and 3.260 billion baht for emergency funds. The total budget will be 8.088 billion baht. The Budget Bureau will make a consideration on the budget allocation.

4. If the cabinet approves the plan, the government will issue the Royal Proclamation to define the area to be constructed in the district of Pathumwan, Bangrak, Pomprabsattruphai, Samphanthawongse, Phra Nakhon, Thonburi, Bangkok Yai, Phaseecharoen, and Bang Khae. At the same time, the PM's Office should declare the proclamation about the land utilization for mass transit systems as soon as possible.

Commentary: If MRTA is approved by the Cabinet, only the northern section of Hopewell will be constructed. However, I would like to see the following issues to be considered for both MRTA and SRT:

For MRTA, ask BMCL and Ch. Karnchang if they can accept the construction cost and the concession terms for the southern extension. If so, just go ahead without calling a new bid for contractors and concession holders. If not, then calling a new bid and seeing if BMCL and Ch. Karnchang PCL can accept the terms of the winner.

The next issue is about the financial backup. MRTA should call JBIC, Tokyo-Mitsubishi Bank, as well as domestic creditors.

The Third issue concerns the construction through Rattanakosin Island. It requires a delicate balance during construction due to the fact that most of old buildings use logs and stone as foundations. If they are lucky, they will find teak logs which were used as a foundation pillars. If they are unlucky, they will find lots of skeletons since the area around Samranrat used as a gallows area for beheadings by sword.

MRTA Asking Government to Approve the Southern Extension
"Khiree" Grumbling about the Slow Progress on BTSC Extensions
Prachacart Thurakij, May 31-June 3, 2001

MRTA is pushing forward the southern extension of Blue Line subway from Hua Lamphong to Bang Wah (Thonburi) with a distance of 7-8 km to the Secretariat of the Cabinet within this week, after being approved by the MRTA Board. The consultant said the southern extension will increase passengers to 150,000 persons a day. BTSC is complaining that the government is making a strange deal with MRTA.

Mr. Praphat Jong Sa-nguan (MRTA Director) said he will push forward the southern extension of Blue Line from Hua Lamphong to Bang Wah with a distance of 7-8 km as well as four subway stations and three Skytrain stations to the cabinet to get cabinet approval after receiving the assessment from Mushell (Thailand) Co.Ltd--a British consultant company.

"MRTA Board and the minister of OPM have already approved such an extension to be finished as soon as possible so as to ensure the creditors and the government that the subway project won't be a loss maker and can complete the mass transit system network."

Mushell (Thailand) Co.Ltd has made an assessment that the extension will have a construction cost of 30 billion baht. The extension will go from Hua Lamphong to Bang Wah via New Road, and an underwater tunnel from Pakklong Talad to Issaraphab. MRTA will need to spend 3 billion baht for expropriation. The southern extension will boost the number passengers by 150,000 a day. The increased construction cost is due to the baht depreciation. In 1996, 30 billion baht would have been enough to cover the construction of the southern extension from Hua Lamphong to Bang Khae, but the same amount of money now can only cover Hua Lamphong to Bang Wah.

MRTA Director said JBIC told MRTA during the unofficial discussion that JBIC will grant a loan on civil engineer sections and the construction of the southern extension will start in 2003 and be opened in 2008 if the cabinet approves the project soon. MRTA will allow BMCL to run the service to ensure the continuing mass transit system and since nobody else will be able to compete with BMCL for investment on the extension project. The bid calling of Skytrain extension is an example for this case. Such a case will need government help from BTSC to ensure that the project will start as soon as possible.

MRTA said BMCL will conclude the financial deal by the end of June 2001 or the service cannot be started on December 5, 2002.

MR. Khiree Kanchanaphak (BTSC CEO) told Prachachar Thurakij that he felt totally amazed that MRTA was trying to push the extension project even though MRTA has not finished the first section yet. They have no idea at all how many daily passengers they will actually have. What about real daily revenue as well as operating costs and profits (or losses) after the subway service becomes a reality? Contrasting with the Skytrain service which has existed for more than a year, the Skytrain extensions will definitely increase passengers from the suburbs and reduce traffic volume from southern Bangkok. However, Taksin and his cabinet have made very slow progress on the Skytrain extensions even though the Skytrain extensions been under discussion for 4-5 years.

Commentary: Mr. Khiree had better try to lobby Taksin very hard to realize the project. However, it is quite hard since BTSC allows DTAC (from UCOM) to set up mobile phone shops in Skytrain stations. DTAC comes from UCOM, an archival of AIS in mobile phone services. AIS is a company Premier Thaksin used to run before going into political fields. Now you see why Taksin pays attention to MRTA instead of BTSC. Even worse, UCOM is backed by the Democrats--a political archenemy of Taksin and the Democrats also back the Skytrain! It will take barrels of sweat for Mr. Khiree and the BTSC Board to pursue Thaksin to pay attention to BTSC extensions.

Furthermore, BTSC should also readjust feeder buses to pick up the passenger from eastern Bangkok (Bang Kapi, Minburi, Lad Krabang). Lang Suan-Wireless Road loop should be expanded to enable to pickup boat passengers at the Pratoonam Pier of Saen Saeb since Pratoonam Pier is an interchange pier for boats from Bang Kapi and Phan Fah Bridge. It will take lots of energy to walk from Pratoo Nam pier to Chitlom or Ratsdamri Station and I can testify to that since I have walked between them several times.

Another loop under consideration is the Ekkamai-Phra Khanong loop. It should be expanded to pick up passengers from Lad Krabang who stopped at Klong Tan intersection and those who hang around RCA. It could be changed to pick up those who live in the Phatthanakarn area but BTSC may consider running a shuttle bus service for a small fee since it is quite a long distance.

For a middle-term resolution, BTSC and Microbus should consider merging. BMA should also consider the boat service along Pravet Canal and the revival of the Phrao Canal boat if possible to feed BTSC, but BTSC shuttle buses should pick up those boat passengers as well.

Japanese Banks Delaying Loan Causing Subway Construction to be in Limbo
Prachachart Thurakij, May 24-27, 2001
Ch. Karnchang PCL has lots of headaches after the foreign banks are delaying the 20-billion-baht loan for BMCL to invest in the subway due to a lack of confidence and the continuing economic downturn. Such delays on loans will make the first phase (Huay Kwang-Bangsue) opening on December 5, 2002 impossible. The financial sources have told Prachachar Thurakij that BMCL is in financial trouble since the international financial institutes have little confidence in investment in Thailand, and the amount of money required to invest in this project (20 billion baht principal plus high interest rate) has made them cautious in granting a loan to BMCL for 25 years with a fixed interest rate.
If BMCL cannot find financial resources from abroad to back the company up, MRTA will have to come to bail BMCL out of trouble by investing in the subway system while letting BMCL deal with services. Nevertheless, BMCL told MRTA that the company will eventually find the financial resources to back the company up. Even though BMCL said they will find the financial resources to back the company up, many of the BMCL creditors still feel skeptical about the claim since Ch. Karnchang PCL (BMCL's mother company) is still sunk in a sea of red ink in loss-making projects such as the Pathumthanee Water Utility, and the Northern Bangkok Expressway (Chaeng Watthana - Bang Pa-In) which is now merged with the 2nd Stage Expressway (Bang Klo-Chang Wattana). BMCL is reducing the investment fund from 25 billion baht to 20 billion baht after the company found that the estimated number of daily passengers will be 270,000-280,000 passengers instead of 430,000 passengers. Furthermore, BMCL had reduced the initial purchase of rolling stock from 35 to 20 sets to ensure creditors that the company will make a profit after starting the service.
BMCL also is studying the operating results of BTSC as a guideline for the the operation. "BMCL has to invest 6 billion baht for MRTA services and the company will need 13-14 billion baht loan to cover the expense. Now, BMCL is negotiating with Tokyo-Mitsubishi Bank, JBIC, and French Credit Agregole-Indosuez Bank SA to obtain the loan. The negotiation is continuing even though 10 months has passed after the contract signing. The creditors have not concluded the loan allocation to BMCL yet." So far, BMCL is designing the rolling stock, but BMCL has not sent the blueprint to Alstrom-Mitsubishi for the production yet. It will take 14 months for Alstrom-Mitsubishi to produce the rolling stock at the amount BMCL requests, and it will take Alstom-Mitsubishi another 4-6 months for the test-run.
Therefore, many feel doubt whether BMCL will be able to meet the deadline to run the northern section (Bangsue-Huay Kwang - 10 km, 9 stations) by December 5, 2002 and keep the fare rates at 14-36 baht (with 15% discount during the first 3 months of services). BMCL said the company has no problems finding the loan from foreign creditors since domestic financial resources will fill the vacuum as soon as foreign creditors refuse to grant the loan to BMCL. The current problem is about the loan ratio between domestic and the foreign creditors. The creditors are drafting the loan contract which will be done in three months. Furthermore, BMCL estimated that the annual income will be reduced from 3-4 billion baht a year to 2 billion baht a year.
Nevertheless, the company will pay back to the government at the same rate as the contract with MRTA stated. Mr. Parfait Jongsa-nguan (MRTA director) felt surprised about such news from BMCL since he had received a letter from BMCL on April 27, 2001 that BMCL found creditors to support the project which is considered as the preliminary part of the loan request. BMCL is negotiating with creditors such as JBIC, Tokyo-Mitsubishi Bank and so on. It will take lots of time to finalize the loan request since the subway is a megaproject. So far, JBIC and Tokyo-Mitsubishi Bank have sent representatives to talk with the MRTA Director about the plan to connect the subway with cars and BMTA (Air-conditioned) buses which should leave no questions or doubts in the minds of Japanese creditors at all. If BMCL cannot find any financial resources to back the company up, it will delay the construction first after BMCL runs out of funds to pay the contractors. BMCL also has a schedule to order rolling stock from Alstom-Mitsubishi (NESCO) by the end of June 2001 or the operation cannot be started on December 5, 2002. However, MRTA has a second plan to deal with this problem. So far, Alstom-Mitsubishi is ready to produce rolling stock as soon as they receive the order even though BMCL has no cash to pay them, but the company needs to receive the order from BMCL first. Reduction of the number of rolling stock is not a problem for MRTA, but BMCL must deliver all the rolling stock to meet the quota after the concession expires.
Commentary: BMCL must order rolling stock first while MRTA will have to find something for collateral. I hope everything will be all right for MRTA and BMCL--starting the service on time and boosting the number of passengers up to the original target as soon as possible.

Pushing BMCL to produce rolling stock to meet the deadline
Dailynews, May 8, 2001
MRTA is pushing BMCL to produce rolling stock to meet the deadline in the next 18 months. Otherwise, the service cannot be started on December 5, 2002. Mr. Praphat Jongsa-nguan (MRTA Director) said that after receiving a letter of financial confirmation issued by the creditors from BMCL (the concession holder of Chaloem Rachamongkhol subway line from Hua Lamphong to Bangsue--to ensure that BMCL has the resources to run the service) that MRTA is going to check BMCL about the progress on rolling stock production and the contract signing between BMCL and creditors. BMCL has told MRTA that the rolling stock production will be started within this month or by the end of the next month. The prototype will come from France and Japan, with the same form as the subway rolling stock in Singapore. The body of the rolling stocks will be made in France and the rail system will be made in Japan while being assembled and tested in France. The rest of rolling stock will be assembled and shipped to Thailand via Laem Chabang Port for test running by July 2002 before the opening of service (Northern Section Huay Kwang-Bangsue) in December 2002, so there is 18 months left. Mr. Praphat said the MRTA subway system will be similar to the BTSC Skytrain--3 bogeys for 1 set of rolling stocks--but without noise. The stored value tickets will be smart cards which can be read by showing the cards to the reader machines, without putting the cards into the machines. On the other hands, the one-way tickets will be very similar to the one-way skytrain tickets. The machines will "eat" the cards to recycle them for further use.

Stealing 700 rai of expropriated land to construct a shopping center
Siam Business Weekly (AKA Siam Turakij), Vol. 7, No. 334, May 6-12, 2001

MRTA Southern Extension (Hua Lamphong - Bang Khae) plan heading to the cabinet next month
Dailynews, May 4, 2001
The First Section of Blue Line is 66% done. Mr. Praphat Jong Sa-Nguan (MRTA Director) said the construction of MRTA Blue Line with five sections is 66% done.
The progress of each section is done as follows:
1) The tunnel and stations in the Southern Section (Hua Lamphong - Huay Kwang) : 83% done
2) The tunnel and stations in the Northern Section (Huay Kwang - Bang Sue) : 74% done
3) Maintenance center construction : 89% done
4) Track Laying : 44% done
5) The installation of elevators and escalators : 44% done For the private section, BMCL has sent the letters of confirmation from financial institutes that they are ready to finance the projects. MRTA expect to speed up the project to follow the plan - Northern section by December 2002, and Southern section by August 2003
. Praphat said the MRTA Board has approved the plan for the southern extension of the Blue line which will be in two sections:
1) Hua Lamphong - Bang Wah (Part Subway - Part Skytrain with an underground tunnel across Chao Phraya river)
2) Bang Wah - Bang Khae (Skytrain) In June 2001, MRTA will send the extension plan to the cabinet. If the cabinet approves the plan, MRTA will allocate land for the project. The financial resources will come from JBIC as usual since JBIC said the institute is willing to give a 40 year pay back period. The extension will be the good old 80:20 - 80% from public for civil works and 20% from private for service.

BMCL confirming that the company will obtain loans from domestic and foreign institutes
Cutting down the loan from 25 billion baht to 20 billion baht due to the passenger estimates cut almost by half
Dailynews, May 4, 2001
On the afternoon of May 3, BMCL held a press conference stating that the company has the financial resources to deal with the MRTA Blue line (Chaloem Ratchamongkhol Line) from Hua Lamphong to Bangsue. Mr. Sombut Kitjalux (BMCL CEO) said that after signing the contract with MRTA on August 1, 2000, the company had successfully negotiated with financial institutes and obtained US$350 million from the financial institutes which was more than the company had expected.
JBIC and Tokyo-Mitsubishi Bank from Japan, Credit Agricole-Indosuez Group from France, Hongkong and Shanghai Bank from Hongkong are willing to finance this project without hesitation. All four international financial institutes will finance the rolling stock productions, and instruments for subway system operations for NESCO (Nippon-Euro Subway Company) Group which is a consortium jointed by Mitsubishi Group from Japan and Alstrom Co.Ltd. from France Furthermore, Siemens Co. Ltd. from Germany comes to MRTA to offer a deal to find more financial institutes and the production of rolling stock systems to ensure the system compatibility after the Skytrain is transferred to MRTA after the ending of concession (BMA will be the owner of the line and MRTA will run the service in the next 30 year if BMCL declines the concession extension).
Sumbut said the domestic financial resources such as Siam Commercial Bank PCL (, Krung Thai Bank PCL (, Thai Military Bank PCL ( are willing to extend a credit line of 13 billion baht. Bangkok Bank PCL ( and MRTA are negotiating on the loan and related details which will take a few months to conclude. Furthermore, the company will invest 20 billion baht on this project instead of 25 billion baht since the MRTA has lowered the estimated daily passenger from 430,000 passengers a day to 260,000-270,000 passengers while the company and MRTA are discussing the return which forces the company to lower the money level to borrow.
The fare rate will be 14-36 baht and 15% discount during the first few months after the operation. Praphat Jong-Sanguan (MRTA Director) said the concession conditions do not force BMCL to send a letter of financial confirmation in detail, just tell MRTA that those financial institutes are ready to support the project or not. If the plan does not go as they expect, MRTA must find an alternative plan to deal with such an emergency. For the case of lowered investment due to lower estimated number of passengers, BMCL will order rolling stock at the adequate level according to the actual number of passengers. However, BMCL will supply the rolling stock to the final level just before the concession ends in the next 25 years.

Bt28 bn on offer for subway
The Nation, Somluck Srimalee
Bangkok’s subway system will be financed through Bt28.7 billion in loans from local and foreign financial institutions. The loans would go to Bangkok Metro Co Ltd (BMCL), a concessionaire of Metropolitan and Rapid Transit Authority, which is building the subway system. BMCL is to provide the electric trains and install the system. The deal would be the largest loan syndication since the economic crisis of 1997. BMCL managing director Sombat Kitjalaksana said the foreign lenders would include the Japan Bank for International Cooperation (JBIC), which is also a loan guarantor, Bank of Tokyo-Mitsubishi, France-based Credit Agricole Indosuez, Merchant Bank Asia and HSBC. Another loan guarantor includes Nippon Export and Investment Insurance, Sombat said. The foreign banks would lend Bt15.7 billion. The remaining Bt13 billion would come from local institutions, including Krung Thai Bank, Siam Commercial Bank, Thai Military Bank and Bank of Ayudhya. “The project is an integral part of Thailand’s mass transit system and it is financially viable,” a JBIC representative said yesterday. BMCL president Plew Trivisvavet said lenders showed great interest in the project because the projected annual return on investment is 17 percent over the 25-year concession. Sombat said the company prefers interest rates “in line with our policy of no more than 9 percent per annum during the 12-year period”. “We expect that the funding would be completed by the end of June,” he said. The company might not borrow the entire amount offered, as its policy is to keep the debttoequity ratio below 2.5:1, he said. These financial ratios would meet the company’s earning projection, he said. BMCL expects to break even 10 years after the subway begins operating, scheduled for 2003. The figures are based on projections of 290,000 passengers a day. At the time the concession was awarded to BMCL last year, the company expected that the daily number of commuters would be 400,000. The projections was revised, based on the operation of Bangkok Transit System’s skytrain, which has about 150,000 riders per day, and the slowing of the economy. Despite the revision, Sombat said the company’s long-term financial projections will not be harmed. To accommodate fewer commuters, BMCL has lowered the investment budget from Bt25 billion to Bt20 billion. BMCL plans to seek a listing on the Stock Exchange of Thailand in the middle of next year before the project is kicked off in 2003.

BOI Forcing MRTA to Use More Local-made Materials
Thairath Daily, April 30, 2001

Mr. Jakkramonthon Phasukwanit (Deputy Secretariat of BOI) said that the BOI committee has not approved the investment promotion to BMCL (the concession holder of Blue line) which has an investment budget of 25.168 billion baht since the BOI committee needs to review the investment plan to add more local-made machines and instruments to reduce import bills. BOI will help BMCL on matters relating to the subway. For the commercial deal on the MRTA land, the public sector will help the private sector only in case of low return through the lower payback to the government, but not more investment promotion of commercial deals on MRTA land.

MRTA Lobbying to Amend the Act - Snapping 90 Billion Baht Profit from Real Estate Deal
Siam Turakij Weekly (, Vol.7 No. 333, April 29-May 5, 2001
From the Correspondents at MRTA/National Assembly/BMA

The Proposal to Demolish Ratchada-Lad Phrao Flyover
Dailynews, April 25, 2001

MRTA contractors are going to demolish the Ratchada-Lad Phrao Flyover in mid-May by demolishing the central island on Ratchadaphisek Inner Ring Road first. Metropolitan Police HQ has approved the 3-step plan to demolish the flyover. However, the new flyover plan hasn't been approved yet due to the problems.

Pol.Maj.Gen. Boriboon Wutthiphakdee (Duputy Commander of Metropolitan Police HQ) said ION Joint Venture (MRTA Contractor) has been to the HQ to discuss traffic management during the demolishion of Ratchada-Lad Phrao Flyover which will have four steps. However, Metropolitan Police approved only the first 3 steps. The 4 demolition steps are as follows:

1) Create a new traffic surface by demolishing the central island which will take 45 days to finish. It will result in the lose of one inbound lane and one outbound lane from the three inbound lanes. It will start in the mid-May.

2) Flyover demolision at the outbound section to Ratchayothin Intersection - The contractor will use the SRT area around the flyover to construct a new traffic lane to compensate for the loss of traffic lanes after flyover demolition. During the night, there will be a loss of one inbound lanes and one outbound lane. It will take 150 days to get this section done.

3) The demolition of the inbound flyover to Sutthisarn which will lose two traffic lanes of the flyover but add one traffic lane on the ground which will take 142 days to complete.

4) Construction of the new flyover in the center of the road hasn't been approved by Metropolitan Police HQ yet since it will cause detrimental effect on traffic management in the intersection.

All 4 steps should be complete by February 2002.

Pol. Maj. Gen. Boriboon said the demolision of the flyover will cause strong detrimental effects on traffic, especially at night for the big automobiles such as trucks and buses, since it will cost four traffic lanes - two inbound lanes and two outbound lanes.

30 Billion Baht Subway Extension, MRTA Board Agrees to Ask Mr. Somsak to Push Forward
Dailynews, March 28, 2001
MRTA is pushing forward for the 7 km southern subway extension from Hua Lamphong to Bang Wah to the MRTA Board of Directors. If the Board agrees with the plan, they will send the plan to Mr. Somsak and persue the cabinet to approve the plan. According to the plan, the southern extension will add 150,000 more daily passengers. On the other hand, BTSC directors are inviting Krungthep Thanakhom to meet with Shanghai Metro in Shanghai to discuss about the funding for extension.

At the MRTA board meeting on March 29, Mr. Suphachai Phisitwanit (former MOF Permanent Secretariate) discussed the Southern extension of the Blueline Subway from Hua Lamphong to Bang Khae (13.8 km) after the inspection and policy delivery by Mr. Somsak Thepsuthin (Minister of the Office of Prime Minister). The Minister said if the extension is good for the Bangkokians, then he will push forward the extension plan.

Mr. Praphat Jongsa-nguan (MRTA Director) said in 1997 the board had approved the following extensions for MRTA subways with a budget of 199,670 million baht (then US$ 7.9868 billion):

1) 13.8-km Southern extension of Blue line -> Hua Lamphong - Bang Khae
2) 11.6-km Northern extension of Blue line -> Bangsue - Phra Nangklao Bridge
3) 36-km Orange Line -> Bang Kapi - Ratboorana

However, the 1997 economic meltdown forced the government to cut the budget and MRTA to set the priority for the extension plans to the 7 km southern extension (Hua Lamphong-Bang Wah). The southern extension will be a 4 km subway plus 3 km skytrain to link Thonburi with Bangkok City Center. The civil work budget for this extension will be 30 billion baht. This extension will increase the daily passengers by 150,000 passengers, and have social benefits by reducing oil importation bills, improving the environment, and relieving traffic jams which cannot easily be counted in financial terms. If the MRTA Board approvs the plan, MRTA will deliver to Mr. Somsak who will eventually deliver to the cabinet around May 2001 and the plan will adjust the budget according to current situation.

According to the BMA City Hall, Mr. Khiree Kanchanaphak (BTSC CEO) invited the directors of Krungthep Thanakhom Co.Ltd. (BMA Financial Arm) to take a trip to China and meeet with the Board of Directors of Shanghai Metro Co.Ltd. to discuss investment in BTSC extensions.

Commentary: The southern extension will be very good for those travelers who to want to go to the City Center, northern Thonburi citizens who are better off than southern Thoburi citizens, and those who work with the Royal Thai Navy since one station will be very close to the Royal Thai Navy HQ. However, I think most of the people I mentioned will still rely on river boats and ferries for their trips unless the subway comes up with reasonable ticket prices.

For the case of Shanghai Metro, I hope that Mr. Khiree's Chinese Connection will function well enough to realize the plan since he considers Shanghai Metro as a strategic partner. If the plan functions very well, Mr. Khiree might come up with Hopewell revival so he could put his Skytrain into uses at full capacity.

Subway extension to be revived - Track delivery raises hopes for opening
Supoj Wancharoen, March 29, 2001

The board of the Metropolitan Rapid Transit Authority will revive its planned extension of the Hua Lampong-Bang Sue subway.

MRTA governor Prapat Chongsanguan said the 7 km extension would consist of a 4 km underground and a 3 km elevated section.

The board will resubmit the plan to cabinet since PM's Office Minister Somsak Thepsuthin, supervising the agency, promised to support useful projects.

"We will not look at the internal rate of return but will convince the government of the subway's benefit to the society," said Mr Prapat. "It can relieve congestion, save fuel imports and protect the environment. The extension to Bang Wa will increase the passenger volume by 150,000 daily if it is completed by 2008." Regarding the overall extension of the first-stage subway, the 20 km Hua Lampong-Rama IX-Bang Sue route will consist of a 13.8 km Hua Lampong-Bang Khae extension, 11.6 km Bang Sue-Phra Nangklao bridge extension and a 35 km Rat Burana-Bangkapi extension.

The extension cost 199.6 billion baht before the baht depreciated four years ago. Investment in the initial Hua Lampong-Bang Wa extension was set at 30 billion baht.

Mr Prapat said the MRTA had yet to review the cost estimation of the initial extension and should be able to forward the plan to cabinet by May.

All 6.2 tonnes of railway track for the first-stage subway have arrived, increasing the likelihood that the mass transit service will open on schedule late next year.

Chukiart Potayanuwat, construction director of the MRTA, said the track had been imported from Austria and Germany and the last lot was unloaded at Laem Chabang port in Chon Buri last Friday. The transport of the tracks to the subway depot on Rama IX road is under way and should be finished in two weeks.

"We have installed the tracks delivered in the first lot. Next month we will lay more on the northern route towards Bang Sue and then the southern route towards Hua Lampong," he said.

The 20 km subway from Hua Lampong via Rama IX road to Bang Sue is expected to start operating the northern half from Rama IX road to Bang Sue late next year. Full operation will begin in mid-2003.

The state enterprise is responsible for all civil work including underground tunnels, stations and tracks while Bangkok Metro Co Ltd (BMCL), its concessionaire led by Ch Karnchang Plc, will import trains and an operating system to provide the service for 25 years.

The MRTA awarded the 3.2-billion-baht track installation contract to CKSL consortium comprising Ch Karnchang and SNC Lavalin Co of Canada on Oct 15, 1999.

Mr Chukiart said track installation will be completed by the end of next year and the commencement of the country's first subway would then depend solely on BMCL.

He said the company was trying to secure supplier credits for the import of electric trains and an operating system. Under the terms of its contract, BMCL is required to seal the loans by next month.

Finding the Solutions for Subway Stock
Thairath Daily, March 26, 2001

Mr. Praphat Jongsa-nguan (MRTA Director) spoke before the MRTA board meeting on March 29, 2001 and said that MRTA proposed that the board approve the plan to reserve a right to buy Blue Line (Bangsue-Hua Lamphong) stock from Bangkok Metro Co. Ltd. (BMCL) at par no more than 25% of the capital stocks after BMCL offers an IPO at SET. However, MRTA has to declare the right to buy stock a year after signing the contract with BMCL which will be due on July 1, 2001.

Mr. Praphat said MRTA will get the priority to buy the stock first. However, MRTA will have to take a look at the market conditions before making an actual purchase of stocks. MRTA will consult with the Ministry of Finance about the money to buy the stock via the annual budget. If the government cannot allocate the budget to MRTA to buy the stock, MRTA will borrow money. However, it depends upon MOF's decision to allocate money for MRTA to purchase those stocks.

There was a rumor that MRTA is going to bail BMCL out of trouble by purchasing the subway stock. However, MRTA said such a purchase was not subject to the 1992 Joint Venture Act since such a purchase was specified in the contract. If amendment of contract is necessary, it will need to follow the guidelines of 1992 Joint Venture Act.

Skytrain and Subway Extensions Must Be Started during Thaksin's Administration
Dailynews, March 16, 2001

General Thammarak provided the policies for OCMLT to realize the Subway and Skytrain extensions during the Thaksin Administration even though Thaksin didn't make any direct involvement on the traffic policies beyond drafting traffic policies.
     On the morning of March 15 at OCMLT, General Thammarak Issarangkul Na Ayuthtaya (Ministry of PM Office) visited OCMLT and gave the policies to OCMLT to Pol. Maj. Yongyut Sarasombut (OCMLT Secretariat). General Thammarak told the OCMLT staff that Pol. Lt. Col. Thaksin (the Prime Minister) used to supervise traffic affairs so he is familiar in dealing with this matter. Thaksin's policies are designed to solve traffic problems and develop traffic flows according to the government's policies which requires OCMLT to be the main decision maker and coordinator to realize current traffic projects with transparency. Furthermore, OCMLT has a duty to develop sustainable and planned traffic systems.
     General Thammarak said the government has a policy to develop mass transit systems into a continuous network and push forward the Skytrain and Subway extension projects to be realized within four years since mass transit systems are effective measures to solve traffic problems. Furthermore, the government will revive the traffic discipline projects which used to be instated when Pol. Maj. Col. Thaksin was Deputy Premier even though the government has little cash to reward those police officers.
     Some critics point out that the Premier hasn't had any direct involvement in traffic control since his earlier promises to solve Bangkok's traffic woes in six months (Note: Thaksin first came to power as Deputy Minister in a previous government on the promise that he would solve Bangkok's traffic problems in six months--a promise unfulfilled). General Thammarak defended his boss by saying the Premier had made a short term goal, a middle term goal, and long term goal to solve the Bangkok traffic jam but there was a rumor started that he'd be able to solve traffic matters within six months. The Premier said he'll come to deal with traffic matters after he finished dealing with other important matters.
     Pol. Maj. Yongyut Sarrasombut said that OCMLT sent a proposal to the Council of State to restrict traffic within the radius of Ratchadaphisek Inner Ring Road. However, the Council of State told OCMLT that such a policy would violate the constitution which gives freedom of travel to Thai people. Therefore, OCMLT will have to come up with the measures that implicitly restrict the traffic without violating the constitution.

Government Has to Be Careful about Subway Extension
Dailynews, March 8, 2001

MRTA has finished digging the whole 20-km tunnel. Mr. Somsak Tepsuthin urged MRTA to start the service three months before schedule and pointed out that government has to be careful about the extension since it can have detrimental effects on the budget.
     Mr. Somsak Thepsuthin (Ministry of PM Office) came to Hua Lamphong Station at 11:00 AM of March 7 to head the ceremony of finishing digging the Southern Section of subway tunnel along with Mr. Praphat Jongsa-nguan (MRTA) and BCKT.
     Mr. Somsak said the Northern section will be opened for service in December 2002 but it is possible to be opened for service three months ahead of schedule. For the Southern extension from Hua Lamphong to Bang Khae which requires huge amount of money, Mr. Somsak admits that the government has so many budget constrains that the investment on the Southern extension will cause detrimental results on other sections of the budget. Therefore, the government has to make careful consideration.
     Mr. Praphat said that the tunnel digging is all done. What is left is internal decoration, concrete pavement for pathways, the room fittings for instruments, machines, and system installation. MRTA will send a proposal to extend the route from Hua Lamphong to Bangkhae to the cabinet soon, but they have to consider who will be able to send the proposal first between OCMLT or MRTA. Mr. Praphat admits that the extension may not be financially profitable, but worthwhile if they take into account social benefits such as time saving, fuel saving, pollution reduction. Furthermore, BMCL will have an additional 150,000 daily passengers. He expects that the Southern extension will be started in 2003 and completed in 2008. The reason that the Southern extension requires both a larger budget and a long time to finish is that it requires a tunnel under the Chao Phraya.
     If BMCL is going to offer an IPO, MRTA reserves the rights to buy 25% of stocks according to the contract. However, MRTA will wait until BMCL actually offers the IPO before making a consideration on buying the stocks according to market condition. If it is a bear market, MRTA may decline to buy BMCL stocks which have no effect on MRTA.
     Mr. Sombut Kijjalux (BMCL CEO) said the company is going to negotiate with the subway system supplier company (NESCO Co. Ltd. - Franco-Japanese Consortium) to find the financial resources for loans as well as domestic loan. BMCL will submit the financial plan to MRTA in April 2001 and feels confident that the project will survive but will have to depend upon the number of passengers and the approval of extensions to add more daily passengers.
    Commentary: Since MRTA also would like to see the circle track for the blue line subway, it would be very nice to include the extensions which turn the Blue line into a circle loop into the same package as the Southern extension. If the budget constrains put such a line on the hold, a half circle line (Bangsue-Wongsawang-Tha Phra) and a modified Southern extension (Hua Lamphong-Grand Palace-Bang Wah) would be all right since they can turn the Blue line into a circle line even though not a big circle as the line that goes (almost) along Ratchadaphisek Inner Ring Road. Well, it has taken 23 years to complete Ratchadaphisek Inner Ring Road (from 1971 to 1994)... think how long it could take to complete the circular Blue line...

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