Bangkok Mass Transit On Right Track

[webfact]

Mass transit on right track

By WATCHARAPHONG THONGRUNG

THE NATION

Govt to pursue Public-Private Partnership model so that it can set fares; bid to make train travel more affordable to more people

Getting around Bangkok could be easier in the near future if the government has its way in implementing a new model for mass-transit development.

The model, called Public-Private Partnership at gross cost, or PPP, was approved by the economic ministers on Wednesday for building the new electric-train Purple Line from Bang Yai to Bang Sue.

Advocates of the PPP model say it is a better way to develop the city's mass-transit routes. Under the present master plan, seven new routes with a total length of 236 kilometres will be built in the greater Bangkok area.

"PPP at gross cost is good for all these projects, whose combined investment will run to the tune of several hundred billion baht. The private sector will be encouraged to compete fiercely and make the best offers to get these deals," said a top official at the Mass Rapid Transit Authority.

FIXING PASSENGER FARES

"Most importantly, the government will be able to fix the passenger fares and ticketing system under this model."

At present, the government has no say in setting the fares on either the Skytrain or the subway systems, because prices are subject to the terms and conditions of the concession contracts awarded to privately owned Bangkok Mass Transit System (BTS) and Bangkok Metro Public Company (BMCL) under the build/operate/transfer model.

The fares now range from Bt12 or Bt14 to Bt40 or Bt45 per passenger

per trip for a journey of up to 20 or 25 kilometres.

"The government needs to make the fares more affordable to more people so that mass-transit systems are more widely used. Our study shows that fares of Bt15 to Bt30 across all routes are more effective for boosting ridership," the official said.

"Under the PPP model, the government may set aside an annual budget to subsidise mass-transit services if there are revenue shortfalls because of low fares."

As a public service, such subsidies are worthwhile, because electric-train mass-transit systems are more efficient in terms of energy consumption and environmental protection than other modes of commuting. The local governments of most big cities around the world subsidise these public services.

Direct subsidies are not possible under the present build/operate/transfer concession model used for the Skytrain and subway services, largely because both BTS and BMCL, the concessionaires, are privately owned and profit-oriented. The concessionaires set their own fares so that they are financially viable until their concessions of 25-30 years expire. If they are profitable, part of their profits are shared with the government in accordance with the terms and conditions of their contracts.

However, BMCL, which runs the 20-kilometre subway system under the MRT concession, has been losing money for the last five years, due to its low ridership and relatively short rail network.

Transport Minister Sophon Saram has suggested the government may negotiate with privately owned BMCL to convert its concession contract to one based on the PPP model. The current Hua Lamphong-Bang Sue Blue Line (stage one) could then be integrated into a larger network of Blue Line (stage two) and Purple Line in the future.

BMCL has suffered accumulated losses of Bt6 billion over the past five years, because the number of passengers has been far below its forecast of 400,000 a day. At present, only 180,000-200,000 commuters use the subway each day. To break even, the number needs to be at least 300,000.

The company also owes financial institutions Bt11 billion, resulting in interest payments of Bt700 million to Bt800 million a month.

However, critics say the privately owned firm should not be bailed out.

"Converting the present concession contract of BMCL into the PPP model would be politically sensitive, because it would mean the government assuming a private firm's losses and debts," said one critic who is familiar with mass-transit schemes in Thailand.

"It's rather unusual for the transport minister to make such a suggestion. Usually, private firms cry foul and seek remedies from the government, not the other way around."

Maybe, the government would be better off leaving the present BMCL contract alone, while adopting the PPP model for new mass-transit schemes, such as the Purple Line and the Blue Line (stage two), so that past mistakes are not repeated.

Then we can expect Bangkok, a city of about 12 million people, to have a much larger, more affordable and reliable network of electric-train mass-transit systems in the near future.

-- The Nation 2010-01-08

[newsfooter][/newsfooter]

[animatic]

Short term rpofit motives, give rise to opver pricing and suddenly those profits never appear.

While lower cost can mean greatly increased usage, and thus SOME profits in the nearer term.

When many of your potential riders make 200-300 baht a day asking 40 baht x 2

just to get to work and back, will not lure them off of the buses from hel_l,

and their 2 hours of commuting each day.

And one reason the subway diesn't get used is because there is no

global transit fare connection between Skytrain and Subway.

Separate companies, and separate fares, and in both cases too high for many travelers.

If you could by a BANGKOK TRAVEL CARD, fill it anywhere and swipe it where you need to go,

and the systems divide the profits based on actual card usage likely both would make more money.

[jamesjdaly]

.......Getting around Bangkok could be easier in the near future if the government has its way.......

[Reasonableman]

Yes, I felt the same way after decades of promises of just this and little improvement.

Is an election imminent? I seem to recall Bangkok's traffic problems would be fixed within 12 months under one regime. And what happened...

.......Getting around Bangkok could be easier in the near future if the government has its way.......

[Davidusaf99]

Well, that regime was thrown out for corruption, of course. lol

Edited January 8, 2010 by Davidusaf99

[junglist]

Had a friend uncle working on this system. He quit because he couldn’t take all the corruption that was slowing the whole thing down. Sad really.

[chrislarsson]

If you could by a BANGKOK TRAVEL CARD, fill it anywhere and swipe it where you need to go,

and the systems divide the profits based on actual card usage likely both would make more money.

Make sense, but why have BTS refused to cooperate for so many years then?

Edited January 8, 2010 by chrislarsson

[SM7WGP]

Well, that regime was thrown out for corruption, of course. lol Unquote

And you think this Government is not doing the same, then you must be blind folded

Edited January 8, 2010 by SM7WGP

[trogers]

Borrowing tonnes of Japanese money to develop mass transit lines without comprehensive long term town planning.

BMA is still enforcing building height restrictions based on widths of roads in front of projects, limiting high density living near to these mass transit lines.

BMA is still developing city living based on car ownership, when a decade from now fuel prices hit Bt100/lit and more people will want to live closer to mass transit lines.

This is forward planning of a metropolitan? As in 'M' of BMA?

[thaiozy]

Well never used the train system as cabs are cheap. but just need to find one that want`s to take yu to your destination if there are a lot of cars travelling that way