Infrastructure fund to help finance rail buyback plan

The 200 billion baht the government plans to use to buy back the concessions of all electric train lines in Greater Bangkok is expected to come from two sources: the Mass Rapid Transit Authority of Thailand and fundraising through an infrastructure fund.

Tibordee Wattanakul, director-general of the State Enterprise Policy Office, said the government plans to raise funds via an infrastructure fund on a gradual basis, with 80 billion baht raised per issue until the targeted amount is reached.

He said he expects investors will be eager to buy fund units given the low risk.

Infrastructure funds often offer average yields of 6-7%, said Mr Tibordee.

Funds raised via the infrastructure fund will not be regarded as public debt, he noted.

The government’s plan to buy back the concessions of all electric train lines for a maximum of 200 billion baht is part of an effort to make public transport more affordable.

Mr Tibordee said the effort would be worthwhile if the government can manage the lines while offering low ticket prices, which should increase passenger numbers.

He said the valuation of 200 billion baht is based on the future cash flow and benefits concession owners would gain during their remaining concession periods.

If the concession buyback takes place in 2027, the remaining concession period for some lines would be shorter, especially the Green Line, as its concession ends in 2029. This could mean the total amount spent on the concession buyback would be less than 200 billion baht, said Mr Tibordee.

Some lines, particularly those on the city’s outskirts, are not profitable. If the state steps in to purchase the concessions, private operators would probably be receptive to a buyback, he said.

The Finance Ministry said earlier a precedent was set with the Thailand Future Fund, which used proceeds from the offering of investment units to invest in state infrastructure assets with the potential to generate income for the fund.

On Tuesday, the cabinet approved a common ticketing scheme for Bangkok’s electric rail services, setting fares between 17 and 45 baht per trip, depending on the distance.

Transport Minister Phiphat Ratchakitprakarn said the move aims to ease the cost of living for commuters by introducing an integrated fare system covering all mass transit lines.

Passengers pay once upon entry and can transfer between rail services.

The government wants to launch the scheme by Jan 1, 2027, he said.

Ministry officials plan to hold discussions on establishing a central clearing house to manage fare collection across different operators.

The system will ensure seamless payments under the single-entry model, Mr Phiphat said.

“The ministry intends to have the clearing house in place for a New Year 2027 rollout,” he said.

Source – Bangkok News