SRT aims for B10bn rise in annual rents
Date：2016/12/14
Published: 13 Dec 2016 at 07:00
NEWSPAPER SECTION: Business | WRITER: Wichit Chantanusornsiri
[Bangkok Post]
The debt-ridden State Railway of Thailand (SRT) estimates that rental fees will contribute 10 billion baht in income per year over the next decade, up significantly from the 2.5 billion currently generated annually.
Leases of the SRT's prime land plots and rental fee rises for existing contracts will contribute to the higher income, said Amnuay Preemonwong, deputy permanent secretary for finance and chairman of the SRT's subcommittee on land development.
Under the five-year plan to utilise the SRT's 39,000 rai of land that is not used for rail business, the agency's annual rental income is projected to reach 10 billion annually by 2021.
When the rental income hits 10 billion baht a year, it will completely cover the SRT's yearly losses incurred from its rail operations, Mr Amnuay said, adding that the state rail agency will make a profit if the rental income exceeds 10 billion baht.
The SRT owns 249,000 rai of land, some 39,000 of which is not used for the railway's core business operations.
Of the total 39,352 rai, 23,200 is not utilised, 15,900 is rented out and the remaining 252 has been encroached upon.
The vacant land has been sorted into three categories: 11 land plots valued at more than 1 billion baht each, including two plots at Bang Sue subway station, land near a subway station in Yannawa district near the Chao Phraya River, the Makkasan station in downtown Bangkok and vacant land near Chatuchak market; land valued below 1 billion; and that of very low value.
The SRT will gradually allow the private sector to jointly invest in developing the land plots through the public-private partnership (PPP) scheme.
Contracts to develop the land plot in Bang Sue are expected to be signed off on in the second quarter of 2018.
The SRT is also preparing to renew rental contracts for three land plots, two of which are in Prachuap Khiri Khan, while the third currently houses Eastin Hotel Makkasan.
The SRT plans to raise rental fees, while negotiations with tenants will be made five years before their contracts are due to expire.
The SRT is among seven financially troubled state enterprises required by the State Enterprises Policy Commission (superboard) to undertake a business rehabilitation plan. The railway is more than 100 billion baht in debt.