SRT to lease out Makkasan land to Finance Ministry for commercial development

[webfact]

SRT to lease out Makkasan land to Finance Ministry for commercial development



BANGKOK: -- The State Railway of Thailand’s land at Makkasan is likely to be leased out to the Finance Ministry for long-term commercial development which is expected to generate 50 billion baht revenue for the SRT to settle its huge debts.

Transport Minister Prajin Juntong said Friday that the SRT’s Makkasan land development committee had received reports of land appraisal from its advisory panel and from the Finance Ministry’s advisory committee.

He said the SRT’s advisory committee had appraised that the land should worth 61 billion baht if leased out for a period of 30 years but the Finance Ministry’s panel had estimated the rental fees at 56 billion baht. However, the latest estimate put the rental fees at 50 billion baht, he added.

The transport minister disclosed that the SRT would take about four years to dismantle the railway maintenance centre and worker’s lodgings in the Makkasan land before the land can be leased out to the leasee.

The plan to utilize the 497 rai of land at Makkasan is as follows: 30 rai to be reserved for the SRT’s museum; 150 rai to be reserved for the city administration’s green zone; 140 rai for traffic and commercial developemt and 177 rai for the second phase of commercial development.

The transport minister said he was confident that the lease of the land to the Finance Ministry would generate 50 billion baht for the SRT which will be used to settle its huge debts.

(Photo : Thai PBS File)

Source: http://englishnews.thaipbs.or.th/srt-to-lease-out-makkasan-land-to-finance-ministry-for-commercial-development


-- Thai PBS 2015-06-19

[Katipo]

"150 rai to be reserved for the city administration’s green zone".... really? Well this is a silver lining if it is true

[Morakot]

"150 rai to be reserved for the city administration’s green zone".... really? Well this is a silver lining if it is true

Yes, greenly painted concrete...

[kotsak]

There goes the neighbourhood ..

[razer]

BANGKOK DECLARES WAR ON GREEN ZONES

[Srikcir]

So SRT land worth 61 billion baht if leased out will be leased to the Finance Ministry for 50 billion baht.

Why not for 61 billion baht?

Is the Finance Ministry going to be in a profit making leasing business in saving 11 billion baht on the lease?

And where would the difference go if tenants are charge 61 billion baht?

Either the article was badly written or something badly is in the Finance Ministry's plans.

[planr]

So SRT land worth 61 billion baht if leased out will be leased to the Finance Ministry for 50 billion baht.

Why not for 61 billion baht?

Is the Finance Ministry going to be in a profit making leasing business in saving 11 billion baht on the lease?

And where would the difference go if tenants are charge 61 billion baht?

Either the article was badly written or something badly is in the Finance Ministry's plans.

Each organization has undertaken independent valuations of the land and those are the values each feels it is worth. It would be like trying to sell your house, which you've assigned a value of X and the buyer is only willing to pay X-5.

If either agency decides to undertake commercial development of Makkasan, there will be no profit for at least a decade or more once the first buildings complete, given the cashflow required to actually make money.