January 31, 2023

New rail privatisation idea gains steam

Transport Minister Saksayam Chidchob has floated the idea of granting the private sector a 99-year concession to operate and improve the rail system while insisting there would be no favouritism if the plan went ahead.

He said that the country’s rail system has not yet been expanded to its full capacity, adding that dual-track systems and high-speed train construction projects are also getting under way to connect cities across the country and with neighbouring countries.

Currently, the Department of Rail Transport (DRT) is holding forums to gather opinions from private companies and invite them to co-invest in Thailand’s rail system, Mr Saksayam said.

“We have to be brave enough to give the private sector a concession to invest for as long as 99 years, as in other countries. This should not be seen as an act of favour to the private sector. But we must look at what the people will gain. And this requires legal amendments.”

The initial idea will be to lease train slots to companies to operate freight and passenger services on specific sections of track which are not used by the State Railway of Thailand at specific times, the minister said.

He added that several foreign diplomats told him their countries such as Russia, Czech Republic, South Korean and the US had expressed interest in investing in Thailand’s rail system.

Sorapong Paitoonpong, director-general of the DRT, said the private sector should be given an opportunity to co-invest to develop unused tracks to their full potential.

He said it is estimated that in the next two years, the volume of rail freight transport will increase to 16.5 million tonnes per year from the current 10.5 million tonnes. Legal measures will be taken to support the private sector to jointly operate the rail system, Mr Sorapong said.

Initially, the private sector would be allowed to rent some train slots which are not operated by the SRT. The SRT would examine the viability of their business plans before opening bids for train slots, Mr Sorapong said.

Since the bill on rail transport has yet to be enacted, this project would be undertaken under the Public-Private Partnership Act.

However, Sawit Kaewwan, president of the State Railway Workers Union of Thailand, said that the union does not oppose the idea of the private sector jointly operating the rail system, but did not agree with such long concessions. A better format must be found, he said, adding that the union will study further details before coming up with a conclusion.

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