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BMA inks B190bn skytrain deal...... BTSC will operate city network until 2042
The Bangkok Transit System Company is to be paid 190 billion baht by City Hall to operate the skytrain system until 2042.
People crowd the skytrain during the rush hour yesterday. With the number of passengers soon expected to exceed 500,000 a day, City Hall yesterday signed a contract with Bangkok Transit System Company to operate the skytrain for another 30 years. PATTANAPONG HIRUNARD
Under the contract signed with Krungthep Thanakhom, the business arm of the Bangkok Metropolitan Administration, BTSC will be the sole operator of the current routes and three extension routes for 30 years.
The contract also allows BTSC to continue operating the 26km On Nut-Mor Chit and National Stadium-Taksin routes for another 13 years after the existing contract expires in 2029.
Bangkok Deputy Governor Teerachon Manomaiphibul defended the multi-billion-baht deal, saying it will not put the BMA at an disadvantage.
"It is much cheaper to sign the contract today than in 17 years [when the current contract ends]," said Mr Teerachon.
BMA had hired a consultant firm to work out the figures before making a decision, he said.
According to Mr Teerachon, the BMA is slated to earn 110 billion baht based on the contract.
"It is estimated that the BMA will earn 300 billion baht from service fees throughout the contract.
"After deducting 190 billion baht to be paid to BTSC, City Hall has an outstanding balance of 110 billion baht," he said.
Mr Teerachon said the estimated earning excludes other gains from commercial development along the infrastructure, including at stations and depots.
BMA is expected to collect about 100 billion baht more from commercial gains and assets, he added.
The signing of the contract comes less than a year before the term of Bangkok Governor Sukhumbhand Paribatra ends.
MR Sukhumbhand said the long-term contract will give BTSC an incentive to invest and improve services.
"Five years before the concession ends, BTSC is required to provide 60 trains. Currently, there are 23 trains. With a long-term contract, the concession holder will have more confidence," he said.
The governor declined to comment when asked if the long-term contract was intended to keep other political parties from meddling with the BMA's project.
Keeree Kanjanapas, founder and chairman of the BTSC, admitted yesterday the company's financial health has been significantly boosted by the contract.
He added that the company has weathered the recent financial crisis and thanked City Hall for entrusting BTSC to service the public.
Mr Keeree said there is nothing unusual in the fact that the BTSC's contract is much higher than that of the Mass Rapid Transit Authority's (MRTA) Purple Line, which is worth about 90 billion baht.
"BTSC operates a total of 36km, while the operator of the Purple Line runs 23km," he said.
The On Nut-Bearing and Taksin-Wong Wian Yai extension routes have recently opened for service, while the Wong Wian Yai-Bang Wa extension is scheduled to begin partial service later this year. The contract for the On Nut-Bearing and Taksin-Wong Wian Yai routes will take effect next Tuesday while the contract for the Wong Wian Yai-Bang Wa extension takes effect when the service starts.
Prapas Chongsanguan, a former governor of the MRTA which supervises the subway, yesterday objected to the long-term contract, saying a bidding process should be called to select an operator.
Mr Prapas, an assistant to the transport minister, pointed out that the BTSC is not the only firm with expertise in operating the skytrain.
Also, contract extensions will Normally only be considered five years before the initial term expires, he said.
He added that MR Sukhumbhand should also have waited until after the next Bangkok governor election.
Mr Prapas suggested the BMA's decision may violate the law, saying the Interior Ministry which supervises the agency should have the authority to make a decision in the matter.He also alleged there had been an earlier resolution by the Office of Transport and Traffic Policy and Planning, that the skytrain system should be handed over to the MRTA when the current concession ends. However, he had no further details