SRT told logistics is way to financial gain : Net losses for state rail firm set to double

SRT told logistics is way to financial gain : Net losses for state rail firm set to double.

ARANEE JAIIMSIN

The State Railway of Thailand (SRT), one of the country's worst-performing state enterprises, has been told to focus more on logistics activities aimed at improving its financial performance.

The SRT plans two rail transport routes for goods this year to help reduce national logistics costs, according to Deputy Transport Minister Sansern Wongcha-um.

The routes are from Nakhon Sawan to Laem Chabang port and from Khon Kaen via Nakhon Ratchasima to Laem Chabang.

Mr Sansern said the perennially money-losing SRT, which focuses mainly on passenger transport at rates that do not meet its costs, needed to make better use of its trains for logistics activities.

The new rail routes would not only benefit the state railway operator, but also offer competitive transport costs for business operators when compared with other modes such as trucking, and cause less pollution.

The Finance Ministry estimates that the SRT's annual net loss will grow to 12 billion baht by 2016, from 6.7 billion baht in 2005.

Under the preliminary development model, the Transport Ministry would provide appropriate facilities along the two demonstration routes and would lease the right to manage the rail lines to the private sector.

Mr Sansern said the rail leaseholders must provide locomotives or pallets themselves to help the government cut down on investment costs for logistics infrastructure development. "With this model, the Transport Ministry could control the operations of the private sector better than giving out operating concessions."

He said the Transport Ministry would hold talks with the SRT labour union in the near future regarding the model. If there were no objections, the model would be implemented this year, he added.

Mr Sansern said many private operators had expressed an interest in the projects and wanted to see them developed under the interim government.

Currently, the SRT, the Port Authority of Thailand and the Office of Transport and Traffic Policy and Planning are reviewing the projects before they are proposed to the cabinet. Mr Sansern said the budget for the projects would be stated in the final proposal.

"I believe that the projects could be initiated in this government and some outdated laws and regulations could also be amended," he said.

According to Mr Sansern, the Nakhon Sawan-Laem Chabang rail route had the potential to demonstrate efficient logistics activities for agricultural products, in particular rice, since Nakhon Sawan was a major location for rice production.

The Khon Kaen-Nakhon Ratchasima-Laem Chabang route could be a good model for logistics management of containers and industrial products, he said.

Recently, the Chinese government asked the Transport Ministry to develop a rail route from Chiang Khong in Chiang Rai to Laem Chabang.

Bangkok Post
Monday January 15, 2007