State Railway of Thailand to monetise land asset to offset RM4.97 bil worth of debt

BANGKOK (Sept 28): Thailand’s largest property owner, the State Railway of Thailand (SRT), is targeting to monetize its 44,000 hectares of land across Thailand to offset its decades of losses worth 40 billion baht (RM4.97 billion), reported Bloomberg.

The land plots should deliver at least 600 billion baht (RM74.59 billion) in additional revenue over the next 30 years, according to Thailand’s Transport Minister Saksayam Chidchob in the news report.

Set up in 1890 to provide not-for-profit transport services, the rail operator has racked up billions in liabilities through money-losing operations. Though the idea of generating income from SRT assets has been around for years, the plans are only now taking shape.

Saksayam said that several trophy properties, especially in central Bangkok, are probably more valuable than current appraisals if they can be developed into high-rise mixed-use projects.

"Given SRT's track record of inefficiency, it's difficult to see how plans on non-core operations could sustainably reverse losses in core activities," said Pavida Pananond, professor at Thammasat University's Department of International Business, Logistics and Transport.

She opined that the focus should be on managing its transport services for people and freight, not property development.

However, Saksayam pointed out that the establishment of the asset division is just part of a programme to modernise the rail enterprise. Other plans include allowing private companies to use SRT lines to transport freight and people, and adding battery-powered trains to supplement diesel-powered services.

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