Bangkok’s 14 billion baht bailout for BTS debt moves forward

Bangkok is scrambling to settle a colossal 14-billion-baht debt to the Bangkok Mass Transit System (BTSC). The Bangkok Council has taken a crucial step, setting up a special committee to scrutinise a draft ordinance allowing the Bangkok Metropolitan Administration (BMA) to access emergency funds.

Council president Surajit Pongsingwitthaya convened an extraordinary meeting today, putting the spotlight on the hefty repayment due for fiscal 2024. The draft ordinance, if approved, will give Bangkok Governor Chadchart Sittipunt the green light to pull approximately 14.5 billion baht from the BMA’s reserves. The money is earmarked to pay off outstanding operating and maintenance (O&M) costs for key BTSC extensions, including the Saphan Taksin-Bang Wa and On Nut-Kheha lines.

A 24-member ad hoc committee has been formed to vet the ordinance within 30 days. This follows a July 26 ruling from the Supreme Administrative Court, which ordered the BMA and its business arm, Krungthep Thanakom (KT), to clear their debt to BTSC within 180 days.

Governor Chadchart, in response, vowed to follow the court’s ruling but stressed that tapping into the reserves required the council’s approval. With time ticking, Bangkok Deputy Governor Chakkraphan Phiewngam urged the newly-formed panel to fast-track the process, aiming to finalise the approval before the 30-day deadline.

“The debt must be paid this month.”

Chakkraphan highlighted that further delays could lead to mounting interest charges, putting additional financial strain on the BMA, reported The Nation.

UPDATE: Bangkok faces 11.75 billion baht Green Line debt crisis

The Bangkok Metropolitan Administration (BMA) and its business arm, Krungthep Thanakom (KT), are urgently reviewing a National Anti-Corruption Commission (NACC) ruling before they settle a colossal 11.75 billion baht debt owed to the Bangkok Mass Transit System (BTSC). This follows a Supreme Administrative Court order on July 26, which gave BMA and KT just 180 days to pay up.

The debt, linked to the operating and maintenance (O&M) costs of the Saphan Taksin-Bang Wa and On Nut-Kheha Green Line extensions, is now under intense scrutiny due to a potentially game-changing NACC ruling.

The NACC previously determined that the BMA’s decision to hire BTSC to operate three extensions of the Green Line between 2021 and 2042 might have violated key laws, including the Private Participation in State Undertaking Act and the Act Concerning Offences Relating to the Submission of Bids to Government Agencies.

KT chairman Tongthong Chandransu revealed to Krungthep Turakij that BMA is treading carefully.

“We need to carefully interpret the details of the ruling as it involves a highly sensitive matter. If the violations affect the legality of the subsequent O&M contracts, we will resubmit the case to the administrative court to reconsider.”

Tongthong assured that if the contracts are found lawful, BMA and KT are ready to honour the court’s order and pay the debt. However, with the NACC’s findings hanging over the matter, the 180-day countdown to repayment might not be as straightforward as it seems.

Adding to the pressure, the 11.75-billion-baht debt is just one slice of a much larger 39.4-billion-baht pie that has already sparked years of legal battles, with fears that further delays could push the total amount to a staggering 40 billion baht, reported The Nation.

UPDATE: BTSC demands 40 billion baht Green Line overdue debt payment

The Bangkok Mass Transit System (BTSC) declared itself ready to negotiate with the Bangkok Metropolitan Administration (BMA) and Krungthep Thanakom (KT) over the staggering debt tied to the BTS Green Line extensions.

This comes hot on the heels of a Supreme Administrative Court ruling on July 26, giving both parties a 180-day deadline to cough up nearly 12 billion baht for the operational and maintenance (O&M) costs of the Saphan Taksin-Bang Wa and On Nut-Kheha extensions.

BTSC’s chairman, Keeree Kanjanapas, revealed that the total debt had ballooned to 39 billion baht as of July 25, potentially soaring to 40 billion baht with delayed payments.

“We won’t sign any contract unless it’s legally sound.”

Keeree emphasised the company’s responsibility to shareholders and passengers. He urged the BMA and KT to settle the 11.75 billion baht debt immediately to bolster BTSC’s liquidity and enhance service quality. Keeree also highlighted the pressing issue of a near-28 billion baht remaining debt, accruing a hefty 7 million baht in interest daily.

While reaffirming BTSC’s readiness for negotiation, Keeree expressed hope for a swift resolution, ensuring seamless transport services. He noted the BMA’s ongoing review of the current Green Line concession, set to expire in 2029, and clarified that discussions about future extensions have yet to commence.

Bangkok Governor Chadchart Sittipunt acknowledged the debt’s impact on BMA’s finances, potentially pushing spending beyond the 2025 budget of 90 billion baht. However, the 58 year old Bangkok chief assured that the BMA would avoid borrowing, opting instead to adjust spending according to revenue estimates, reported The Nation.

ORIGINAL STORY: Bangkok ordered to pay over 12 billion baht to BTS within 180 days

The Supreme Administrative Court upheld a ruling requiring Bangkok Metropolitan Administration (BMA) and Krungthep Thanakom Company to pay BTS Group Holdings over 12 billion baht in outstanding debts related to the Green Line extension project within 180 days.

The Supreme Administrative Court delivered its final verdict at 9am today, July 26, affirming the Central Administrative Court’s decision. The BMA and Krungthep Thanakom Company (KT) must compensate Bangkok Mass Transit System Public Company Limited (BTS) for breach of contract concerning the operation and maintenance services of the Green Line extension. The ruling mandates that the payment, including interest, amounting to 11.76 billion baht, be completed within 180 days from the finalisation of the case.

The case revolves around the BMA’s Green Line extension project, which includes two segments: the first extension from Saphan Taksin to Bang Wa and from On Nut to Bearing, and the second extension from Mo Chit to Khu Khot and from Bearing to Samut Prakan. The court ordered the repayment due to BMA’s failure to adhere to the contractual obligations for compensation for operation and maintenance services provided by BTS.

The ruling specifies that the BMA, having appointed Krungthep Thanakom, a company in which BMA holds a 99.98% stake, for the project to ensure operational flexibility, must also bear responsibility for the unpaid debts.

“Since Krungthep Thanakom has outstanding debts under the contract for the operation and maintenance services of the Green Line extension, BMA is jointly liable to settle these debts to BTS.”

The breakdown of the debt includes 2.35 billion baht for the first extension, with accrued interest of 2.2 billion baht. For the second extension, the debt amounts to 9.4 billion baht, accompanied by interest of 8.79 billion baht.

The interest is calculated based on the Minimum Lending Rate (MLR) announced by Krung Thai Bank Public Company Limited, from the date the lawsuit was filed until the payment is fully made, reported KhaoSod.

“The court has concluded that BMA’s actions in managing the Green Line extension projects and delegating Krungthep Thanakom to handle operations require them to jointly cover the unpaid debts to BTS.”