Discussion initiated on three-way negotiations concerning compensations for electric railways, as proposed by Chadchart.
The Bangkok Metropolitan Administration (BMA) is currently facing significant financial losses with the Green Line extensions, losing an estimated 6 billion baht per year. This financial predicament could potentially impact the fare compensation rate for the electric railways, causing a stir in the ongoing dispute between the BMA and Thailand's Transport Ministry.
At the heart of the dispute is the government's enforcement of a 20-baht maximum fare for all electric trains in Bangkok and surrounding provinces, set to commence in September 2025. The policy aims to ease commuter costs and stimulate the economy. However, the policy has caused substantial revenue losses for operators, particularly private concessionaires, whose existing agreements average fares around 34 baht per passenger.
The Transport Ministry estimates compensation for the two lines currently concessioned by the BMA (Green and Yellow lines) at approximately 2.525 billion baht. In contrast, the BMA estimates a much higher figure of 11.059 billion baht, potentially including additional costs such as those related to the ownership transfer of the lines to the ministry.
Bangkok Governor Chadchart Sittipunt has voiced concern that the unclear compensation terms could expose the BMA to lawsuits from private operators. He has urged the Transport Ministry to initiate tri-partite talks including the BMA and concessionaires to resolve compensation amounts and contractual obligations.
The proposed resolution procedure includes conducting tri-partite negotiations, addressing compensation for lost revenue under existing concession contracts, considering adjustments in fare compensation reflecting operational deficits and fare caps, and preventing legal disputes by agreeing on fair and transparent compensation mechanisms before policy implementation.
Despite criticism that the fare cap may unfairly burden taxpayers outside Bangkok, supporters highlight Bangkok's significant share of national tax revenue (approximately 48.3%), framing the policy as a measure benefiting the broader economy and all Thais.
As the BMA continues to grapple with the financial implications of the Green Line extensions, Governor Chadchart's call for dialogue offers a glimmer of hope for a resolution that balances the needs of the city, the operators, and the national economy.
- The ongoing dispute between the Bangkok Metropolitan Administration (BMA) and Thailand's Transport Ministry over the 20-baht maximum fare for electric trains could potentially affect not only the city's politics and finance but also the culture, tourism, and business sectors, as the BMA is also responsible for these areas.
- The proposed resolution procedure for the fare compensation dispute includes not only tri-partite negotiations but also the consideration of adjustments in fare compensation that reflect operational deficits and fare caps, which could have significant implications for the industry and transportation sectors.
- The government's enforcement of the 20-baht maximum fare for electric trains could potentially impact the sport and tourism industries, as cheaper transportation options could attract more tourists to Bangkok, while higher transportation costs may affect the financial stability of professional sports teams.
- The policy aimed at easing commuter costs and stimulating the economy may have unintended consequences on the industry and finance sectors, as substantial revenue losses for operators could potentially impact their ability to invest in new businesses and projects.
