Technical Assistance Consultant s Report. Thailand: Improvement of Railway Passenger Services

Transcription

1 Technical Assistance Consultant s Report Project Number: TA-8183 THA April 2014 Thailand: Improvement of Railway Passenger Services (Financed by the Government of France) Final Report Prepared by PADECO Co., Ltd. Tokyo, Japan For Ministry of Finance, Thailand Ministry of Transport, Thailand State Railway of Thailand This consultant s report does not necessarily reflect the views of ADB or the Government concerned, and ADB and the Government cannot be held liable for its contents.

2 TABLE OF CONTENTS ABBREVIATIONS...I EXECUTIVE SUMMARY... E-1 1. INTRODUCTION STRATEGY FRAMEWORK FOR SRT PASSENGER SERVICES Current Situation: SRTs Circle of Decline Breaking SRTs Circle of Decline Investments to Renew the Network, Rolling Stock and Equipment Safety A Priority Rebuilding the Passenger Business SRT Capacity for Delivering Change Existing Situation and Suggested Improvements SRT Systems and procedures Free Trains Public Service Obligation (PSO) Train Service Improvement Opportunities Simplification of Tariff Structure Fares and Fares Mechanism Restructure Timetable to Match Demand Reflect Realistic Running Times in Timetable Red Line Impact on SRT Preconditions to Viability Safety Task Force and Audit Management Strengthening through a PMO Central Procurement Department and Review of Procurement Procedures Customer Focused Business Units with Full Accountability Time Line of Capital Improvements Property Development and PPPs Advertising and Sponsorship Traffic Demand Forecasts to Preconditions for Growth Targets for Growth Forecast Assumptions Traffic Forecast Results... 39

3 2.7.5 Revenues and Expenditures Road Map and Implementation Plan PREPARATION OF AN SRT PASSENGER RAILWAY STATION MANAGEMENT AND OPERATIONS MANUAL General Condition and Appearance of SRT Stations Station Reconnaissance Selected Stations Condition Report of Stations Staffing Financial Data Findings and Recommendation Future Station Development and Facilities Improvement Passenger Survey Selection of Sample Size Survey Locations and Timing Results Station Management and Operations Manual Review of Existing Manuals Revised Manual and Manuals Based on Standards Guideline for Manuals Need for Revised Manuals Content of Draft Station Manual SRT s Training Center Poor Station Design and Signage: Case Study of Makkasan Station Study Tour Introduction Study Tour Program Results of Study Tour and Lessons Learned... 56

4 Appendix 1 List of Persons Met by the Consultants Appendix 2 Documents Collected by the Consultants Appendix 3 Summary of Meetings Appendix 4 SRT Map Appendix 5 Trip Reports Appendix 6 Workshop Proceedings Appendix 7 Legal Opinions Appendix 8 Train, Bus and Air Comparisons Appendix 9 Transport Subsidies Appendix 10 Passenger Forecast Models Appendix 11 SRT Financial Evaluation Appendix 12 Airport Line Financial Evaluation Appendix 13 Historical SRT Passenger Ridership ( ) Appendix 14 Safety Task Force Appendix 15 Safety Case Appendix 16 Airport Rail Line Description Appendix 17 Project Management Organization Appendix 18 Views of Stations Included in Surveys Appendix 19 Safety Concerns and Passenger Inconveniences Appendix 20 Station Visits and Layouts Appendix 21 Stations Financial Information Appendix 22 Passenger Survey Questionnaire and Survey Results Appendix 23 SRT Smart Station Project Appendix 24 Draft SRT Passenger Station Management and Operations Manual Appendix 25 JICA s Post Evaluation of the SRT Training Center Project Appendix 26 Study Tour Agenda and List of Participants

5 ABBREVIATIONS ADB ALARP ARL BCAT BERTS BS BTS CDTA CMMS DRC DT ebum EIA EN ERP FAM FMIS GDP ICD IFIs ISO JICA KPI MOF MOT MRTA NAM NESDB NFPA Asian Development Bank As Low As Reasonably Practical Airport Rail Link Bangkok City Air Terminal Bangkok Elevated Road and Train System British Standard Bangkok Mass Transit System Public Company Limited Capacity Development Technical Assistance Computerized Maintenance Management System Diesel Rail Car Double Tracking Extended Bangkok Urban Model Environmental Impact Assessment European Norm Enterprise Resource Planning Fare Adjustment Mechanism Financial and Management Information System Gross Domestic Product Inland Container Depot International Financial Institutions International Organization for Standardization Japan International Cooperation Agency Key Performance Indicators Ministry of Finance Ministry of Transport Mass Rapid Transit Authority National Model Office of The National Economic and Social Development Board National Fire Protection Association i

6 O&M OTP PDMO PMC PMO PPP PSC PSO PSP QA RAMS RITA RPS SAP SARL SEPO SOE SRT SRTET TDRI 2T Operations and Maintenance Office of Transport and Traffic Policy and Planning Public Debt Management Office Property Management Company Project Management Organization Public Private Partnership Public Service Contract Public Service Obligation Private Sector Participation Quality Assurance Reliability, Availability, Maintainability and Safety Reform Implementation Technical Assistance Rail Pension Scheme Systemanalyse und Programmentwicklung (System Analysis and Program Development) German software company and leader in database management systems Suvarnabhumi Airport Rail Link State Enterprise Policy Office State Owned Enterprise State Railway of Thailand SRT Electrified Train Thailand Development Research Institute Foundation Two Trillion baht Program ii

7 EXECUTIVE SUMMARY Current Situation: SRTs Circle of Decline Over the last decade numerous studies have been undertaken of SRT (State Railway of Thailand) situation with many recommending significant structural reform and reorganization. In parallel with these studies decisions have been made by the government to modernize the existing rail network in Thailand. The implementation of structural reform and the reorganization of SRT have however yet to materialize and even much needed investments have been slow to be procured and delivered. The organization still retains its government departmental ways of working with an abundance of committees covering all activities and a focus on railway inputs (engineering, traffic, etc.) rather than being run as a business clearly delivering outputs for its customers. Many State-owned railway companies around the world suffered in a similar fashion to SRT in the second half of the last century. Limited investment for modernization (from steam to diesel/electric) and network and equipment renewals together with a change of focus to the development of roads and road transport all hit the competitiveness of rail. Declining passengers and freight traffic reduced finances and lack of investment and maintenance caused deterioration in the networks and services offered further fuelling the decline. In many cases government support was forthcoming but eventually the growing financial burden together with the potential collapse of services and networks resulted in a significant period of railway reform. SRT is still experiencing declining passenger numbers and its life expired infrastructure and equipment means that with widespread speed restrictions, necessary to ensure safety until infrastructure improvements are completed, it is uncompetitive against other modes. The diagram below demonstrates this circle of decline in which SRT now finds itself. To break the circle of decline and handle the magnitude of change required to reverse the situation will be a considerable challenge. However it has been achieved by many of the world s railways that are now enjoying a new period of resurgence and growth. Thailand has the opportunity to take the best of those experiences and lessons learnt and apply them to achieve a sustainable and viable SRT. E-1

8 We therefore have recommended that several actions that would professionalize the SRT organization making it more responsive to the challenges of the transport market in Thailand. These actions include: Short Term Actions: Establish a Safety Task Force to undertake an emergency safety audit and resolve key safety issues SRT to work out an effective communications plan to stakeholders on its imminent safety work and the modernization of services over the next five years. The plan would include budgets for promoting and advertising service improvements as they come on line. Reorganize the SRT organization into autonomous business units (financial autonomy to come later) to strengthen the business focus of SRT The Airport Rail Link (ARL) should be the first to be organized as a fully autonomous business unit Restructuring SRT and SRTET (SRT Electrified Train) and accounts to give ARL management full responsibility can be achieved relatively quickly Review the procurement system and procurement arrangements in SRT Begin the process to create a strong Project Management Organization (PMO) to ensure timely execution and essential monitoring of major investment programs Improve train cleaning and repair/invest in mechanized train cleaning units at strategic locations. Carry out post investment appraisal of the Airport Rail Link and study on how to encourage use of the express line and put the project back on track to achieve its original objectives Modify the operation and increase the promotion of the special steam train movements targeting foreign tourists to increase income from these events Begin an aggressive program of scrapping unusable locomotives and coaches for income as well as to free up valuable track space Improve the signage at Makkasan station; work with MRTA to improve signage at Petchaburi station, simplifying the movement of passengers transferring between the two facilities Medium Term Actions: Complete on a timely basis the track upgrading and rehabilitation projects as well as acquisition of new locomotives and rolling stock Restructure the Public Service Obligation (PSO) system to target specific passenger services reflecting the new business unit structure of SRT; these business units will focus efforts to improve services, rather than just to cut costs, to maximize ridership ensuring that social benefits of the PSO services are realized Rebranding of passenger services, capitalizing on the advantage of improved infrastructure and rolling stock, with full commitment to promote and actively market revitalized passenger services through strong public relations and competitive pricing techniques including new timetables, simplified ticketing and fare structure Form commercial business unit structure for the new passenger business focus (Intercity, Regional, Commuter, ARL & Red Line) with full financial and business responsibilities as the planned Financial and Management Information Systems (FMIS) are completed (existing SRT business units have no financial or managerial autonomy) E-2

9 Review existing fares structures and reposition where applicable to fit in with new business focus and objectives. Agree formal mechanism for adjusting fares on a regular basis for inflation. Priorities: In terms of priority, the establishment of the Safety Task Force should be the number one priority of short term recommendations for SRT. At the same time, it is recommended that SRT begin the process of establishing the Project Management Organization; without a strong PMO we doubt whether SRT will be capable of managing and bringing to successful conclusion the some 20 major capital projects during the coming few years. The other recommendations regarding restructuring the PSO, rebranding of passenger services and reorganization into autonomous business units will depend on the modernization program to be complete, the management accounting project to implement its recommendations and the acquisition of new locomotives and rolling stock. However, the establishment of business units at SRT does not have to wait for the infrastructure work to be completed; in fact, the change in management and operational responsibilities and the integration of all costs and revenues within the Airport Line could be done immediately. We consider that the establishing of the PMO will dramatically improve the procurement system and the reorganization into autonomous business units and rebranding of passenger services can be started simultaneously. Establishment of the Safety Task Force to undertake an emergency safety audit is critical and will demonstrate that strong measures are being taken to improve safety and that management is fully committed to its success. Although new track, rolling stock and equipment will eliminate most of the safety issues that were caused by faulty equipment, poor track condition, etc. it will not necessarily improve safety per se as this depends to a great extent on the safety culture and systems in force within SRT and these will have to be changed. Other actions needed include investment in improved infrastructure, renewal of the ageing locomotive and rolling stock fleet and rebranding passenger services based on improved operating reliability and demand as well as simplified fare structures. The diagram below describes elements of the process needed to break this circle of decline. These identified elements comprise the heart of our recommendations described in this report. E-3

10 Rebuilding and Rebranding the Passenger Business Most of the track strengthening and improvement projects are expected to be complete by mid Five track doubling projects are expected to be complete by 2017 and six additional projects by mid Twenty new locomotives are expected for delivery by 2016 with new passenger train sets for overnight services to be on site also by 2016 and 75 diesel rail cars by To a great extent the basic services offered will be little different than now except they will be using modern equipment, be more reliable, safer, faster, more comfortable and more frequent. New technologies and a business focused organization should enable SRT to better communicate with and adapt its services to the customer. As this process will take some 5 6 years to accomplish it is necessary to focus on the short to medium term strategies for stopping the decline in passengers, rebuilding services and confidence and then building up passenger numbers. The rebranding of passenger services will be the outcome of the strategic reorganization of SRT into financially autonomous business units, giving passenger service a stronger business focus. It will mean not just trying to reduce costs by decreasing the standard of service but to identify the target market(s) and to focus the product to meet the demands of that market. For example, Intercity, Mae Klong line, Bangkok commuter services and the occasional steam train excursions operated by SRT could be structured in a more attractive manner and with the infrastructure improvements already under way these services could be transformed into commercial ventures if marketed properly. In addition, the new sleeping coaches now on order will enable SRT to enter the new high-end passenger market if actively promoted. Need for Strong Business Focus Restructure Business Units The existing SRT organization structure contains several business units but these have no budgetary independence nor does management have accountability based on performance. Even the Airport Line, which is operated under the name of a separate company, turns over all revenue to SRT and does not have authority to procure needed spare parts or to propose new capital expenditures. We recommend creation of separate autonomous operational units within SRT structured as true business units with financial authority to receive and spend money. Managers should be held accountable for the operating performance and financial results, whether these are profit or loss making entities. It is suggested that separate corporate entities be set up (rather than new SRT departments) for each new unit, initially 100% owned by SRT to improve governance and creating a commercial business orientated culture. Such a move would also facilitate any future private sector participation if required. Specifically, we recommend breaking up the passenger business into five core business units: Intercity Regional Commuter ARL Red Line These business units will be responsible for mounting strong marketing campaigns and to develop competitive pricing strategies to actively promote these services and to maximize E-4

11 ridership and revenue. The following diagram demonstrates the process of this organizational change. SRT Capacity for Delivering Change The workload for SRT in breaking the circle of decline is considerable. SRT draft project timelines on the modernization program for 2017 (double tracking projects, red line extensions, new lines etc.) involves work on some 20 separate projects. This excludes other key activities like the FMIS, other IT and organizational changes needed. These activities are very complex and SRT does not have any real central project management organization or expertise to handle this scale of works. It is the Consultant s view that SRT is currently struggling with its daily tasks of running the railway network, the Airport Rail Link, procuring rolling stock, strengthening works and constructing Phase two of the Red Line and will need assistance in completing these projects on a timely basis. With these changes in place, the following is SRT s development timeline. E-5

12 E-6

13 It will be necessary for SRT to actively manage these projects in a more effective manner than in the past. The procurement process within SRT is notoriously cumbersome, time consuming and in some cases, specifications of works are being compromised. Clearly for SRT to effectively manage the future infrastructure and equipment acquisitions, the procurement process needs to be streamlined and strengthened. Need for Stronger Project Management We have proposed the establishment of a Project Management Organization that would have the direct support from the SRT Governor and the authority to push forward critical procurements through all stages of evaluation, definition of specifications, proper selection of contractor and timely acquisition of the procurement. This PMO would be a streamlined organization and would consist of a few individuals, some from SRT and from outside the organization. The PMO Team Leader will likely, but not necessarily, be from outside SRT with a proven track record of strong managerial skills; the remainder of the team would be technical individuals from engineering, finance and traffic departments. The PMO would report directly to the Board of Directors and will be held accountable for progress in implementing major procurement packages. The following diagram outlines our proposed approach. New PMO components Existing SRT organization Need for Technical Assistance There is a high risk that SRT as presently structured and resourced cannot deliver the modernization program. If they continue as they are without changing there are no guarantees of successful delivery or value for money. It is clear however that SRT will need assistance to cope with the challenges ahead. It is over ambitious to expect SRT itself to change and champion railway reform. There are too many vested interests resisting change and it has no experience to draw upon the impetus E-7

14 has to come from outside. Such assistance could come from a mixture of donor/ifi support, recruitment of outside expertise and link ups with other regional railways. The table below offers a suggestion of the type of assistance needed and specific experts needed to guide SRT through the setting up of the PMO as well as developing other managerial skills needed in the future. Other modernization/reform programs have tended to include funds specifically to assist the incumbent operator to restructure the organization, design and procure operating and administrative systems, retrain staff, etc. The current programmes do not include such designated funding and SRT does not have the resources themselves to carry out all of these tasks. Assistance is therefore needed to design and create budgets for the necessary changes as well as finance to implement them. Such assistance could come from a mixture of donor/ifi support, additional government funding, recruiting of outside expertise and link ups with other regional railways. The table below offers a suggestion of the type of initial assistance needed and specific experts required to guide SRT through the setting up of the PMO and planning the programme as well as developing other managerial skills needed in the future. As there is limited SRT financial data attributed to specific services, one of the first tasks of the recommended technical assistance should be to make a detailed assessment of the availability of financial resources within SRT to implement the short and medium term recommendations. To the extent that these funds are not available within SRT, even after reallocation, alternative sources such as allocations from Government budgets or from donor/ifi should be identified and considered. Possible Composition of SRT Technical Assistance Team SRT Technical Assistance Team General Advisory 1. Commercial Railway expert assist with set up of business units 2. Economist/Finance expert assist on fares restructuring & PSO reform 3. Railway HR expert assist with reorganization of SRT 4. Railway IT expert advise on IT solutions (ERP, ticketing, train planning, etc.) PMO 1. Program Manager tasked with setting up PMO 2. Project Manager * to help lead by example, setting up a project management model 3. Project Administrator set up systems, planning, monitoring and control 4. Railway Procurement Expert assist PMO in delivering goods & services Note: Project manager it is suggested that an experienced professional be included to assist with the establishment of administration systems and project management techniques as well as acting as a coach/mentor to other project managers recruited from within SRT. Ridership Forecasts to 2020 Three major elements that comprise our forecast methodology: (i) annual growth rate due to population increase; (ii) growth due to infrastructure improvements to bring ridership to 2005 levels; and (iii) new growth due to new rolling stock acquisitions, rebranding of services and strong marketing of existing services making them more attractive to the travelling public. The table below sets out the estimated time line of major events that will shape the future of SRT: E-8

15 Time Line of Major Improvements Safety task force - resolve critical safety issues Complete improvements for track, bridge & fencing Complete signals & telecom Complete double tracking Procurement of rolling stock Red Line Project Implement management accounting Establish business units with accountability New Line Extensions Based on the infrastructure projects to improve the track and acquisition of new rolling stock we estimate that SRT ridership could increase to the level achieved during In addition to the infrastructure improvements and new locomotives mentioned previously, there will be additional improvements that should result in net increase in ridership beyond 2005 levels; these other improvements include rebranding of services, acquisition of additional passenger coaches and population growth in the country. Based on these assumptions, as well as two pessimistic sensitivity tests the following are our forecasts of future SRT passenger ridership. Traffic Forecast Summary (Millions of Passengers) Scenario Base Case PSO trains Commercial trains Total Moderately Pessimistic PSO trains Commercial trains Total Very Pessimistic PSO trains Commercial trains Total Station and Passenger Surveys Condition surveys were undertaken at four stations and passenger surveys at three stations. A check list was made of improvements needed at each station and station masters interviewed. Lack of funding available for minor repairs was found to be an important issue. The passenger survey results indicates to a great extent that the respondents are relatively satisfied with SRT stations as most comments were directed toward train services and generally give most questions a Moderate to Good marking when asked to scale their preference. It may well be the case that such a result is expected when many of the respondents would not know any better and have no benchmark for comparison. Also there is a tendency to go for the average (moderate response) when completing such E-9

16 questionnaires particularly when they are done quickly by people in a hurry and not really read too deeply. The main negative expressed in the survey involved train punctuality and delays, which is really outside of the control of the station management but clearly has a big impact on the traveler and their experience at a station. A draft SRT Passenger Station Management and Operations Manual has been prepared that will be useful in developing the full manual to ensure SRT stations will be safe and secure offering conveniences to passengers consistent with best international practice. During the station visits it was discovered that those individuals controlling the switches within the station area of these stations are temporary staff. This is a serious situation, and it is understood that this is the policy at all SRT stations, on account of the 5% limitation on new hires. The recent derailment at Lamphun station on 2 nd December apparently was caused by the operator changing the points on a switch while a train was moving over the switch. This emphasizes the need for a more effective training program, even for temporary employees. E-10

17 1. INTRODUCTION Background SRT passenger service is characterized by an aging fleet of locomotives and passenger coaches and inadequate maintenance. For example, the average age of locomotives is 34 years; of passenger coaches 44 years and of diesel rail cars 29 years. Passengers travel predominately is in 3rd class trains, making up 82% of total passengers and 70% of passenger/km. There are average of 563 incidents/accidents per year, based on SRT records from Most of these are not serious but according to the data obtained, locomotive mechanical failure accounts for about 51%, signals 18%, rolling stock failures 10% and track 5%. Examining delay reports, however, it appears that track infrastructure is the most frequent cause (about 45%) with locomotive failures accounting for about 20% of delays; another 9% of delay is caused by operations with less than 1% of delays caused by signal failures. Based on the comparison of the three modes (air, rail and bus) over most competitive corridors, bus fares are typically the lowest, and transit times are shorter than by rail. While air is, of course, the most expensive, with the growth of many low-cost carriers, there are some very competitive air ticket prices for major markets. Of course, the many free trains operated by SRT might attract passengers away from buses, though it is unlikely that the free trains would be an attractive option over long distances. Objectives and Scope of the Project The stated objective of this CDTA (Capacity Development Technical Assistance) is to prepare a strategic planning framework for the development and improvement of SRT passenger services. There are three main components of the project: (i) review existing SRT passenger demand forecasts and identify new commercial passenger service opportunities; (ii) prepare a draft SRT passenger station management and operations manual; and (iii) prepare a road map, implementation plan and strategy framework for upgrading SRT passenger services. Following this Introduction, section 2 describes the Strategy Framework for SRT Passenger Services, which is essentially Component 2 of the Terms of Reference and section 3 describes the process Preparation of an SRT Passenger Railway Station Management and Operations Manual, which is Component 3 of the TOR. Much of the material developed in Component 1 of the project Review Passenger Service Demand Forecasts and Identify New Commercial Passengers Service has been incorporated in our development of the strategy framework, road map and implementation plan described in section 3. A list of persons met by the Consultants is shown in Appendix 1, documents collected in Appendix 2, summary of meetings in Appendix 3 and an SRT map in Appendix 4. We have made several trips on SRT passenger trains and these are documented in Appendix 5. Workshop proceedings are shown in Appendix 6. Our legal expert, while joining the team only during November, has prepared legal opinions on several subjects and his legal opinions are shown in Appendix 7. During our work on Component 1, we developed cost and travel time comparisons of rail with other transport modes, description of transport subsidies and attributes of passenger forecast models typically used in Thailand; these are shown in Appendices 8, 9 and 10, respectively. Other appendices are referenced in the main text. The relevance of the contents of Appendix 10, Passenger Forecast Models, was described in our Interim Report. The issue is related to several of the feasibility studies examined by 1

18 the Consultant for double tracking and rehabilitation. In these studies, the National Area Model was used to forecast the additional benefits resulting in very high forecasts of future ridership on account of these improvements. While the improvements are certainly needed, and they will result in reduced running times and increased reliability but the magnitude of the benefits is far overstated by applying this type of model. We consider these models are suitable for national transport planning purposes, but not for evaluating specific line improvements, nor were they used to prepare our 2020 SRT ridership forecasts. The following is taken from our Interim Report: Clearly, simply the application of a model to project SRT passenger traffic is not a realistic method due to the consistent historical decline in ridership and the need for significant capital improvements to the infrastructure as well as for acquisition of new locomotives and passenger coaches. Any future traffic growth is contingent on at a minimum, the completion of the infrastructure and rolling stock investment program so that SRT can offer competitive transport services that are attractive to existing and potential customers. Training of Counterpart Staff Prior to the submission of our Inception Report, we held a meeting with many members of the SRT Marketing Department. We reviewed in detail the contents of our Inception Report and discussed with many of the staff members issues we raised in our report. This proved to be a good training exercise for SRT staff, as well as for us to gauge the reaction of SRT staff to our suggestions/recommendations. Also, in mid November, we met with Marketing and Traffic Department staff and discussed our traffic forecasts as well as several of our ideas for improving SRT passenger service. Consulting team members participated in steam train excursions operated by SRT, a train trip arranged by SRT to Lob Buri in the locomotive, as well as during other informal discussion at our office. These occasions afforded the opportunity to discuss with SRT staff members, formally and informally, the work we are doing and had very good exchanges of ideas. Deliverables Inception Report 29 August 2013 Interim Report 26 September 2013 Draft Final Report 6 December 2013 Final Report 4 weeks after receiving comments from ADB and the Government on DFR 2

19 3 Component 1: Review Passenger Service Demand Forecasts & Identify New Commercial Passenger Service Task 1.5: Identify relevant data from other transport modes Task 1.8: Review the subsidy arrangements that benefit other transport modes Task 1.9: Propose a methodology for traffic demand forecasts for sections along the four main SRT routes Component 2: Preparation of an SRT passenger railway station management and operations manual Task 2.1: Gather and review existing data for SRT passenger stations Task 2.2: Review current directives and manuals dealing with SRT management and operations Task 2.3: Undertake a detailed reconnaissance of three preselected passenger stations Task 2.4: Conduct detailed interviews with each station manager Task 2.5: Conduct a series of questionnaires and interviews with passengers Task 2.6: Organize a study tour/ workshop to showcase international/ regional best practice Task 2.7: Benchmark with international best practices and discuss findings with SRT management Task 2.8: Prepare a draft SRT passenger station management and operations manual Component 3: Preparation of a strategy framework for SRT passenger service Task 3.1: Prepare a passenger railway strategy for SRT Task 3.2: Assess commercial opportunities for improved, increased, and/or new passenger services Task 3.5: Summarize all information into a strategy framework for developing SRT passenger services TASK Task 1.1: Review SRT and the railway subsector of Thailand Task 1.2: Review the SRT Red Line Mass Transit Project Task 1.3: Review existing SRT passenger service data Task 1.4: Review existing SRT financial information related to passenger service Task 1.6: Identify relevant data regarding economic and financial forecasts for Thailand Task 1.7: Review the specific requirement and impact of the PSO on passenger services Task 3.3: Prepare an analysis of PPP to finance some of the (station) upgrading and development Task 3.4: Summarize the related components and costs for implementing commercial opportunities MILESTONES / DELIVERABLES Station Surveys Project Month & Calendar Month Aug Sept Oct Nov Dec Jan Capacity Development Technical Assistance TA 8183 (THA): Inception Report Interim Report Draft Final Report Final Report Workshops Review / Finalize NOTE: 1 Tasks written in abridged form. For full task titles, see Methodology. 2 Assuming a commencent date of late July 2013, as specified in the RFP's data sheet. 3 Consultant's Recommendation

20 4 Name of Personnel International Positions: Thomas Kennedy Home Field Home Donald Selby PADECO Railway Business Planning Specialist Field Walter Gintschel National Positions: Manus Puntsreerut Nipon Yodrak Suphachai Tangsriwong Noppakorn Klintong Firm PADECO PCBK PCBK PCBK Position Team Leader / Transport Economist / Planner Passenger Railway Operations & Management Specialist Railway Business Planning Specialist Railway Operations & Management Specialist Home Field Home Field Home Field Home PCBK Transport Economist / Planner Field Home PCBK Financial Analyst Field Manit Jumpa PADECO Legal Consultant Home/ Field Home Field Aug Sep Oct Nov Dec Jan Inception Report Interim Report Aug 29 Sep 26 Project Month 4 Draft Final Report Dec 6 Field [Thailand] (full-time) 5 6 Sub-Total Sub-Total TOTAL Person-Months Field Home Total Capacity Development Technical Assistance TA 8183 (THA): Home (part-time)

21 2. STRATEGY FRAMEWORK FOR SRT PASSENGER SERVICES 2.1 Current Situation: SRTs Circle of Decline Many State-owned railway companies around the world suffered in a similar fashion to SRT in the second half of the last century. Limited investment for modernization (from steam to diesel/electric) and network and equipment renewals together with a change of focus to the development of roads and road transport all hit the competitiveness of rail. Declining passengers and freight traffic reduced finances and lack of investment and maintenance caused deterioration in the networks and services offered further fuelling the decline. In many cases government support was forthcoming but eventually the growing financial burden together with the potential collapse of services and networks resulted in a significant period of railway reform. Over the last decade numerous studies have been undertaken of SRTs situation with many recommending significant structural reform and reorganization. In parallel with these studies decisions have been made by the government to modernize the existing narrow gauge network in Thailand. The implementation of structural reform and the reorganization of SRT have however yet to materialize and even much needed investments have been slow to be procured and delivered. The organization still retains its government departmental ways of working with an abundance of committees covering all activities and a focus on railway inputs (engineering, traffic, etc.) rather than being run as a business clearly delivering outputs for its customers. SRT is still experiencing declining passenger numbers and freight traffic and its life expired network and equipment means that even with severe speed restrictions it is not safe and is uncompetitive against other modes of transport. Financially, SRT is bankrupt and our evaluations of the financial situation of SRT as well as the Airport Link are shown in Appendices 11 and 12. Evidence of the decline in ridership is shown in Appendix 13 for the period Figure 1: SRT Circle of Decline Source: Consultants 5

22 2.2 Breaking SRTs Circle of Decline The examination of SRTs Strength and Weaknesses, Opportunities and Threats (SWOT) in its current situation suggests many negatives (see the figure below). For a long time SRT staff have been making do to keep the operation going without adequate funding and resources. Technology and systems have stood still and training and development a luxury. To break the circle of decline and handle the magnitude of change required to reverse the situation will be a considerable challenge. However it has been achieved by many of the world s railways that are now enjoying a new period of resurgence and growth. Thailand has the opportunity to take the best of those experiences and lessons learnt and apply them to achieve a sustainable and viable SRT. Figure 2: SRT Strengths, Weaknesses, Opportunities and Threats Source: Consultants 6

23 Figure 3: Breaking the SRT Circle of Decline Source: Consultants Investments to Renew the Network, Rolling Stock and Equipment As mentioned earlier the government has already decided to support SRT by investing in SRT modernization. The previous government agreed a billion baht Modernization plan (21 projects) that included 152 billion baht funded by the government (Track strengthening Phases 5 & 6 15 billion, Signaling design 19 billion Double track design 77 billion and Strengthening of track, bridges, fences etc. 41 billion) together with 24 billion baht funded by SRT (Rolling stock and the Inland Container Depot (ICD)). Although commenced in 2010 SRT only managed to accomplish a small proportion of the works and procurement, also the new government initiated a new Infrastructure development program (the 2 Trillion baht Program (2T)) and included the balance of the 176 billion baht program plus additional double tracking, strengthening and new lines projects billion of the government s 152 billion was transferred to the new program with SRT still responsible for the rolling stock procurement and ICD (see details of the 2T program in the following tables). Table 1: Rolling Stock & ICD Project Budget Rolling stock million baht 50 Locos 6, loco refurbishment 3, diesel locos 2,145 Loco depots 1, sleeping coaches 4, Rolling Stock 18, ICD 6,066 24, Source: SRT data 7

24 Table 2: 2 Trillion baht Infrastructure Program Mode trillion baht % High speed trains % Bangkok metro/subway.5 4.9% Road upgrades.3 15% Train (non-high speed) upgrades % Sea ports % Cargo stations and custom houses at borders % 100% Total % Table 3: Transfer of Projects to 2 Trillion baht Infrastructure Program Carried over from 176 billion baht Rail Infrastructure Development Program 134, Infrastructure improvement rehab 1.1 Track strengthening Bridge strengthening 11, Fencing 3, , Level crossing signalling 4, Signalling upgrading 7, Telecomm installation 2, DT* Lop Buri Pak Nam Pho 16, DT Mab Kra Bao Thaon ChiraJct 21, DT Thaon Chira Jct Khon Kaen 29, DT Nakhon Pathom Hua Hin 20, DT Prachuap Khiri Khan Chumphon 17, , Source: SRT data *DT Double tracking 134,

25 Table 4: 2 Trillion baht Infrastructure Program (SRT Portion Excluding High Speed Rail) Carried over from 176 billion baht Rail Infrastructure Development Program 134, Infrastructure improvement rehab 15, Track strengthening Bridge strengthening 11, Fencing 3, Level crossing signalling 4,368 3 Signalling upgrading 7,281 4 Telecomm installation 2,152 5.DT Lop Buri Pak Nam Pho 16,215 6.DT Mab Kra Bao Thaon ChiraJct 21,196 7.DT Thaon Chira Jct Khon Kaen 29,221 8.DT Nakhon Pathom Hua Hin 20,833 9.DT Prachuap Khiri Khan Chumphon 17, ,952 Sub Total Carried forward 134,177 Additional 2T Projects: Double track 6 lines 144, Hua Hin Prachuap Khiri Khan 9, Chumphon Surat Thani 17, Surat Thani Padang Besar 35, Khon Kaen Nong Khai 18, Thaon Chira Jct Ubon Ratchathani 32, Pak Nam Pho Den Chai 30,070 New Lines 123, Den Chai Chiang Rai Chiang Khong 77, Bang Phai Nakhon Phanom 42, Ban Pachi Nakhon Luang 4,547 Red Line 86, Feasibility 1 38, Feasibility 2 6, Feasibility 3 7, Feasibility 4 5, Feasibility 5 28,574 Locomotive depot 1,000 Total 489,441 Source: SRT data *DT Double tracking In addition SRT is currently working on the second phase of the Red line between Bang Sue and Rangsit budgeted at some 75.5 billion baht. The 2T program is yet to be approved but the intention is to complete all the major elements (excluding the High Speed Train projects) by 2019/20 as shown below. 9

26 Figure 4: Time Line of Major Improvements Complete improvements for track, bridge & fencing Complete signals & telecom Complete double tracking Procurement of rolling stock Red Line Project New Line Extensions Source: SRT data & Consultants Normally these types of modernization programs also include a substantial sum for the reorganization and restructuring of the railway organization itself and the establishment of new agencies where applicable (i.e. safety regulator, technical assistance for SRT, systems development, recruitment of skilled staff, training, etc.) but no such provision appears to be included Safety A Priority As can be seen from the above section the government is certainly supporting the modernization of SRT and at the end of the program SRT should be in a much improved situation. The program will however take around 6 years to complete assuming T2 is approved shortly and that SRT can manage the necessary works, procurement and resources to deliver and operate the modernized system. Although new track, rolling stock and equipment will eliminate most of the safety issues that were caused by faulty equipment, poor track condition, etc. it will not necessarily improve safety per se as this depends to a great extent on the safety culture and systems in force within SRT and these will have to be changed. In addition SRT is its own safety regulator, unlike most railway administrations around the world where these are now separated and independent from the infrastructure owner/network operator. It could be argued that if an independent safety regulator had been in place the safety issues facing SRT today may have already been resolved. Deteriorated track conditions have necessitated the imposition of many speed restrictions, resulting in slower transit times and more unreliable service. It is usual practice to impose temporary speed restrictions on stretches of line where the track structure is deteriorated and is in need of renewal or rehabilitation. After renewal or rehabilitation, these speed restrictions are then lifted and trains operate at normal speed. The historical lack of funds at SRT meant however that many of the needed renewals and rehabilitation were not done and the temporary speed restrictions became permanent or subject to further reductions as track condition worsened. This situation has increased running times resulting in poor punctuality (against unchanged timetables) making rail uncompetitive against bus. The results of the passenger survey (see section 3.3) confirm that punctuality and delays are some of the main areas of dissatisfaction of SRT customers. We therefore have recommended that SRT establish a Safety Task Force to undertake an emergency safety audit in order to demonstrate that measures are being taken to improve safety. Composition of this task force is described further in this report and in Appendix 14. Despite this policy however derailments and incidents have continued. In an attempt to break the cycle part of the Northern Line to Chiang Mai was closed in September initially until the end of October but has remained closed until the 1 st of December. 10

27 Accidents & Incidents Source: SRT data Figure 5: SRT Safety SRT safety problems are a regular feature of the Bangkok press 1 and have led to at least one travel website aimed at foreign tourists advising travelers not to use SRT because it is unsafe 2. In October the Consultant suggested to SRT management the establishment of a Safety Task Force to stabilize the network and inform stakeholders that a reversal was taking place. Appendix 14 outlines the main features of this task force. Key Task Force objectives were as follows: 0 SRT SAFETY RECORD INCIDENTS INJURIES FATALITIES i. Stabilize SRT service decline and rectify current serious safety problems in SRT (poor track, signaling & rolling stock condition) ii. Set a precise timeline to achieve results iii. Present positive PR to government & customers that SRT is addressing safety in positive & expedient way iv. Go for quick wins resolving safety risk hot spots v. Provide a company-wide high profile initiative that cuts across departmental boundaries and gets the job done (apply project management techniques to focus on delivery) A team would be established of key SRT experts seconded from the main engineering departments & traffic. It would also include finance, procurement and project scheduling expertise to enable budgets & project planning documentation and monitoring & control reports to be generated on a timely basis for the Board. Recruiting a professional project manager from, for example, a private sector construction company could also enhance the team. The initial program would involve a safety audit lasting 4 6 months to ascertain the current status of the network, rolling stock and equipment identifying high risk hot spots for action. Unlike many modern railway organizations, Safety is yet to occupy high level status within the organization in SRT. Workforce safety is a section within the HR department and Passenger safety is part of Traffic and to a great extent involved in incident reporting and compensation claims. Although some safety procedures are in force and there is an elaborate system of regional committees and safety officers the system tends to be passive 1 Bangkok Post

28 in nature lacking power and budgets to get things done. For example safety officers are drawn from the staff and trained up and their performance depends on their own personal drive, it is not a particularly professional system. It is understood that the lack of safety equipment generally observed on any visit to railway premises (hard hats, safety boots, high visibility vests, etc.) is due to lack of budgets. There are some 24 groups of committees with safety officers for each. On average each committee has members, totaling 453 people. It is understood that the Governor is exploring the possibility of forming a separate Safety Department within SRT. We support this move and suggest it is a high level department with a deputy governor solely responsible for safety in SRT. The department should be a professional safety unit covering the whole organization with a safety budget and consideration should be given to abandoning the current committee system. In addition, we recommend that SRT adopt the widely accepted practice of preparing a written Safety Case to publicize its position on risk. A safety case (see Appendix 15) demonstrates that all risks have been identified and managed, with suitable risk control measures in place to ensure that they are reduced to a level which is as low as reasonably practicable, the ALARP 3 test, which is standard across high-risk industries Rebuilding the Passenger Business The modernization program, in line with the regional railway transport master plan is designed to revitalize the existing meter gauge system, so the rebuilt system will have limitations in terms of line speeds and axle loads that will affect services offered. Essentially we will still be operating a conventional narrow gauge system with axle loads of up to 20 tons and maximum line speeds of around km/hr. To a great extent the basic services offered will be little different than now except they will be using modern equipment, be more reliable, safer, faster, more comfortable and more frequent. New technologies and a business focused organization should enable SRT to better communicate with and adapt its services to the customer. As this process will take some 5 6 years to accomplish it is necessary to focus on the short to medium term strategies for stopping the decline in passengers, rebuilding services and confidence and then building up passenger numbers. The work of the safety taskforce should impact rapidly on speed restrictions and enable improvements in punctuality. These have to be publicized in order to attract customers back to the train. Early strengthening works will also contribute. The consultant has found it difficult to understand why SRT keep published timetables in force when it is widely known that due to long term speed restrictions actual running may be two hours later. It would make sense to issue amended timetables to keep the public and in particular tour operators of actual times. It is understood that the manual preparation of timetables is a major constraint. There is timetable software available that could assist SRT in making timetable changes. A major problem SRT currently has in reshaping passenger services is the lack of financial and management information on existing routes and the profitability or otherwise of its operations. In Section several specific short term passenger service improvements are presented. 3 As Low As Reasonably Practicable: A concept involving weighing a risk against the trouble, time and money needed to control it. 12

29 2.3 SRT Capacity for Delivering Change The workload for SRT in breaking the circle of decline is considerable. SRTs draft project timelines on the modernization program for 2017 (double tracking projects, red line extensions, new lines etc.) involves work on some 20 separate projects. This excludes other key activities like the FMIS (financial and management information systems), other IT and organizational changes needed. These activities are very complex and SRT does not have any real central project management organization or expertise to handle this scale of works. It is the Consultant s view that SRT is currently struggling with its daily tasks of running the railway network, the Airport Rail Link, strengthening works and constructing Phase two of the Red Line and will need assistance in completing these projects on a timely basis. Several factors contribute to the delay in implementing projects at SRT 4 : Cumbersome input orientated/ex Govt. department organization Poor financial and management information Resistance to change/old skill sets Lack of performance management and quality control systems Inadequate procurement systems and procedures Government interference Lack of a strong project management capability within the organization There is a high risk that SRT as presently structured and resourced cannot deliver the tasks. If they continue as they are without changing there are no guarantees of successful delivery or value for money. It is clear that SRT will need assistance to cope with the challenges ahead. It is over ambitious to expect SRT itself to change and champion railway reform. There are too many vested interests resisting change and it has no experience to draw upon the impetus has to come from outside. The table below offers a suggestion of the type of assistance needed. Other modernization/reform programs have tended to include funds specifically to assist the incumbent operator to restructure the organization, design and procure operating and administrative systems, retrain staff, etc. The current programmes do not include such designated funding and SRT does not have the resources themselves to carry out all of these tasks. Technical Assistance (TA) is therefore needed to design and create budgets for the necessary changes as well as finance to implement them. Such assistance could come from a mixture of donor/ifi support, additional government funding, recruiting of outside expertise and link ups with other regional railways. The table below offers a suggestion of the type of initial assistance needed and specific experts required to guide SRT through the setting up of the PMO and planning the programme as well as developing other managerial skills needed in the future. As there is limited financial data within SRT attributed to specific services, one of the first tasks of the recommended technical assistance should be to make a detailed assessment of the availability of financial resources within SRT to implement the short and medium term recommendations. To the extent that these funds are not available within SRT, even after reallocation, alternative sources such as allocations from Government budgets or from donor/ifi should be considered. In addition, under this TA, the impact on SRT total staffing of the proposed reorganization into autonomous business units will be determined. 4 Detailed examples are provided in the body of the report and appendices 13

30 Table 5: Possible Composition of SRT Technical Assistance Team SRT Technical Assistance Team General Advisory 1. Commercial Railway expert assist with set up of business units 2. Economist/Finance expert assist on fares & PSO reform 3. Railway HR expert assist with reorganization of SRT 4. Railway IT expert advise on IT solutions PMO 1. Program Manager tasked with setting up PMO 2. Project Manager* to help lead by example, project management model 3. Project Administrator set up systems, planning, monitoring and control 4. Railway Procurement Expert assist PMO in delivering goods & services Note: Project manager it is suggested that an experienced professional be included to assist with the establishment of administration systems and project management techniques as well as acting as a coach/mentor to other project managers recruited from within SRT. 2.4 Existing Situation and Suggested Improvements SRT Systems and procedures Finance and IT SRT is in need of a thorough make over as regards its systems and use of information technology. Its lack of adequate management accounting (FMIS implementation) and need for new computer based solutions are well known and are currently being studied as part of the ADB project examining the accounting and financial management systems of SRT though the project: FMIS Accounting and Financial Management System Reform of Thailand s Railway Sector (45042-THA), which is primarily focusing on financial systems. Many departments throughout SRT have their own small stand-alone systems usually using PCs and excel/word to carry out various tasks but many activities remain non-computerized. For example purchasing & procurement, asset management and maintenance and timetable planning are to a great extent carried out using manual systems. Plans are in hand by many departments for introducing new systems but there does not appear to be a comprehensive strategy to move to, for example, an integrated ERP (Enterprise Resource Planning) system with modules covering all the key business activities. Some examples of these integrated systems include SAP which is used to a limited extent by ARL, Oracle as well as others. It is understood that the Chief Mechanical Engineer s department is introducing an asset management system called Computerized Maintenance Management System (CMMS) 5 that will handle depot maintenance and spare parts procurement and warehousing. This could have been part of an integrated system and fed into the financial and management information system. Procurement Procurement and Works 6 There are many anecdotes concerning SRTs procurement system covering a range of problems from the length of time to obtain spare parts and equipment (locomotives appear to 5 To be implemented by mid References: Doing Business in Thailand 2013 Country Commercial Guide for U.S. Companies 14

31 be a particular problem), lost purchase requests, improperly specified goods and services and abandoned tenders. Procurement follows Government procurement procedures, which are cumbersome and not well suited to a business activity particularly one that relies on a high proportion of foreign sourced goods and services. There is no one computerized purchasing system although e-auctions feature prominently in the procedures. The manual systems are overloaded and prone to error and omission. One feature of the government system is a plethora of committees involved at each stage covering work inspection, bid receipt and opening, bid evaluation, materials inspection, etc. Decisions by committees are time consuming. There is no one procurement department; many departments handle their own procurement. The department known generally as Procurement is within the Chief Mechanical and Electrical Engineer s dept. employs some 80 people and procures spare parts, maintenance consumables and equipment mainly for the rolling stock fleet and the warehouse at Makkasan. There are plans to computerize their activities by mid This department does not handle works contracts they are done by the Construction department (Red line) and the Civil Engineering Department (Track strengthening works) in addition these departments also procure equipment and spares for their areas of activity. The Signaling & Telecommunications department likewise procures for their own needs. E-auction system discriminates against foreign suppliers as the website is totally in the Thai language. The system very much favors Thai middlemen or agents expensive and totally inadequate for railway running primarily on imported equipment. Interviews with procurement also raised problems of multiple bidding by Thai companies and pressure not to disqualify them. The rail market in Thailand is thin and there are not always enough local bidders with representation of the necessary foreign suppliers to cover SRT needs. When asked during discussions with the consultant what was the main difficulty that they encountered with the system on a day to day basis the SRT procurement people stated the E-auction system because of these problems causes as much confusion as a benefit. The current policy of accepting the lowest cost bid instead of whole life costing of each item may well prove to be the most expensive option. According to press reports, MOT complains that the ARL new train request as too expensive a very narrow view. This approach tends to favor Chinese products that traditionally do not last very long & become very expensive to maintain. Also maintaining single manufacturer fleets have significant cost and logistical benefits. In section 2.6.3, the consulting team describes the recommended reorganization of the procurement process within SRT together with a review of the relevance and effectiveness of current procurement procedures to the railway business. Works As mentioned above SRT does not have any central project management organization. The various engineering departments involved with works projects rely heavily on consultants at the feasibility, detailed design and tender documentation stages. The method of outsourcing works projects to various consultants does not necessarily provide the best control and coordination of the projects and contracts. It is suspected that many of these individual projects do not take into account the impact of other planned developments and differ considerably in terms of unit costs and methodologies. For example, the contracts on the construction of Phase II of the Red line are currently on hold whilst the 15

32 contractor evaluates the effect of changing the specification from a three track elevated system to a four track. Clearly the original project failed to take into account traffic demand and operations in respect of SRTs longer distance traffic. Such a change of scope at this stage with contracts already issued and in progress will cost SRT enormous sums in both money and time Governance and Performance Management Although SRT does have a budgeting system, its organization of the business by input departments i.e. separate engineering departments, traffic etc. as opposed to by business and services i.e. passenger, intercity, freight, etc. limits the worth of the process and the information it generates. This structural constraint together with the poor financial and management information system means that it is difficult to get a clear and timely picture of how the businesses are really performing. Even with the relatively new Airport Rail Link, SRT do not combine information from all the available sources to prepare a single monthly profit & loss (P&L), balance sheet and cash flow statement for the business. Costs incurred by the SRTET subsidiary are reported against a management fee mechanism paid for by SRT to perform O&M activities and other costs and revenues are reported under the SRT Metro System Management unit (Under Infrastructure II). Nowhere are these combined with other costs (i.e. depreciation, interest, etc.) and balance sheet data to produce a comprehensive financial statement (see ARL Case study Appendix 16). Clearly work taking place on improving the Financial and Management Information System (FMIS) of SRT is a critical part of SRT modernization and revival. Accountability is discussed further in section on customer focused business units and this area is heavily dependent on effective financial and management accounting systems Free Trains Since 2008, SRT also operates an extended network of free trains, or coaches on commercial trains that offer free seats. In fact, there are a total of 164 PSO trains that offer free tickets as well as 8 commercial trains that also have coaches that offer free tickets. This is a six-month program of offering free travel that has regularly been extended for a further six-month period. The government reimburses SRT for the amount of the ticket price that would have been paid for each free ticket passenger, as well as for the shortfall of this ticket price and the cost to provide the service through the existing PSO system. This certainly represents a significant subsidy of the government for rail passenger services in Thailand. The following tables summarize the number of free trains operated. Table 6: SRT Free Trains PSO Trains Line Type Northern Northeastern Eastern Southern Maeklong Total (Train) Ordinary Train Commuter Train Local Commuter Train Mixed Train Total

33 Commercial Trains (Rapid Trains - free for 3rd class only) Line Train No. From - To (Station) Number of trains Northern 109 Krungthep (Bkk) Chiang Mai Chiang Mai Krungthep (Bkk) 1 Northeastern 133 Krungthep (Bkk) Nong Khai Nong Khai Krungthep (Bkk) Krungthep (Bkk) Ubon Ratchathani Ubon Ratchathani Krungthep (Bkk) 1 Southern 171 Krungthep (Bkk) Sugai Kolok Sungai Kolok Krungthep (Bkk) 1 Total 8 Source : Public Service Obligation (PSO) The current PSO procedure works very much as a subsidy mechanism requiring SRT to apply for support based on forecast financial information and traffic statistics. The procedure requires very detailed financial data by service, which to a great extent is beyond the accounting system of SRT to provide. SRT do not have an effective costing system and have to rely on an allocations system determined in 1997, which is out of date and not necessarily accurate. This leads to a general mistrust between the parties concerning the forecasts and actual numbers. The system includes provision for the repayment of funds not required and also includes a small number of key performance indicators (KPI) designed to link payments to improved performance. MOF (Ministry of Finance) reviews SRT submissions, makes certain reductions to the claims and finally sets in motion a program for reimbursement to SRT for these train services. This system is not satisfactory to either SRT or the MOF as it provides SRT with less than full reimbursement for losses incurred causing further internal crosssubsidies within SRT to cover these losses. Table 7: PSO Mechanism Requests and Payments (million baht) Requested PSO 3, , , , , Government agreed 2, , ,350 2,497 2,436 Variance 1, , , , , % Source: SRT data Figure 6: PSO Mechanism Requests and Payments 6, , PSO PROFILE baht Million 4, , , , Requested PSO Government agreed

34 Adjustments are made by the MOF in respect of non-qualifying items and for example depreciation is not included. Payments are also not necessarily made in the year in question and may be taken in the form of a loan rather than government grant. Table 8: PSO Mechanism Payment Schedule (million baht) Year Total Loan Loan Cash Loan Cash 2013 Cash 2014 Dependent on KPIs Loan PSO , , PSO , , , PSO , , PSO , , PSO , , Total 11, , , , , , Source: SRT The KPIs cover safety, punctuality and some customer service items but given the precarious financial state of SRT it is difficult to see how improvements can be made without some additional investments and funding. The PSO does not include development funding nor does it include overhead and margin to enable SRT to reinvest in the PSO services. According to SRT the PSO system does not fully cover the losses incurred in running Ordinary, Bangkok Commuter, Local Commuter and Mixed PSO services. The Consultant has gained the impression that the system does not focus adequately on the nature of the services being supported and their future status. SRT do not appear to market PSO services to its customers and has limited future development plans for the services. For example, from the perspective of MOF the PSO system may not be achieving their social objective of increasing people s mobility as many of the PSO services are operating with few passengers. For example, during 2012, 65 out of 164 PSO trains operated had less than 40% load factor, and ridership is declining each year. This is at a time when PSO services are offered free to the public as part of the Government s free train policy. These subsidized trains are being operated with old and outdated rolling stock as the reimbursement to SRT is insufficient to accumulate funds for renewal of locomotives and rolling stock. Clearly, there needs to be an improvement to the system of identifying PSO trains, calculation of the loss claim and a more transparent system of reimbursement of SRT for these losses. In the future, the objective of SRT regarding provision of PSO services should read as follows: provide rail passenger services in Thailand on specified routes meeting the standards of service mandated by the government and the market, consistent with safety and operational efficiency within the levels of the PSO subsidy. It will not be an easy task to achieve this objective hard decisions must be taken regarding discontinuing of unprofitable train services and abandonment of unnecessary lines but the end result will be a strong and efficient rail passenger service for Thailand, operated within the constraints of the receipts from fare collection plus subsidy provided by the government. It should also be an objective of SRT to specify those train services losses that will be compensated by the PSO subsidy with the goal that other passenger services will be operated without the need of an operating subsidy. According to existing cost estimates (based on cost factors developed in 1997 and still used for PSO subsidy calculations) all train types lose money. 18

35 If the government cannot afford to increase the PSO subsidy and in order for a rail passenger network to become sustainable, a series of strong positive strategies are needed on the part of SRT to reduce costs of providing passenger services and by downsizing the infrastructure and rolling stock to correspond to the resources required to support existing and likely future service levels. Current Best Practice tends to approach the issue more on a partnership basis using Public Service Contracts (PSC), focusing on outputs to be achieved (services by route, frequency, punctuality, etc.) rather than inputs/costs. They also tend to include some incentives as well as only penalties when performance not delivered. They also tend to be linked to development funding. The Consultant recommends that such an approach would aid the development of SRT services in a proactive way rather than just support a static situation. The aim should be to encourage innovation in providing adequate services to the public. It is also recommended that the PSO be broken up to support the new business units and focus on services provided i.e. Commuter, Rural, Red Line and ARL The present system is a blanket PSO subsidy encompassing all passenger services and it may be that all services do not need to be supported. From a transport policy point of view rail may not be the best option for say transporting children to school on a rural route. It may well be that bus substitution is a cheaper and more effective solution. The PSO mechanism should be able to examine routes in detail and subject them to a cost benefit type analysis considering alternatives Train Service Improvement Opportunities Constraint on improving Passenger Services In line with the regional railway transport master plan the investment programs, track strengthening, double tracking, etc. planned are all designed as a continuation of the meter gauge system rather than to take any opportunity to change to standard gauge with all its advantages in terms of scope of services, running speeds, loading and procurement choices. Some railways have upgraded their narrow gauge systems with heavier rail, bridge strengthening and alleviated the tighter curves on their systems enabling faster running times (160 km/h) and the operation of long heavy haul freight trains. SRTs plans do not include significant enhancement other than generally providing a double tracked network operating at 20 ton axle weights. These decisions do limit the possibilities for future passenger services. Essentially SRT are locked in to a 120 to 140 km/h railway. The reality is that the investment of some US$8.5 billion over the next five years or so alleviates the current speed restrictions and increase capacity that will enable improved punctuality and running times and the competitive position of rail in Thailand. As SRT currently is operating in an environment of deteriorated track structure, ageing locomotives and rolling stock, these problems need to be resolved first before new commercial opportunities can be explored. The Consultant s team during the assignment has travelled on the network and there are many areas that can be improved through good housekeeping and attention to detail. These improvements include: repairing broken toilets, carriage doors, air conditioning units, fans, seats and benches at stations etc. These however involve some allocation of funds and a deliberate policy to allocate staff to the work on a regular basis. 19

36 Train cleaning appears to be an area where short term improvements could be made. Many trains are not clean; brake block dust stains on the windows are a particular problem but need detergent for cleaning. Cleaning at Hua Lamphong is manual carried out as trains enter the platform using hosepipes and brushes. Not only is this inadequate for cleaning but this method often leaves the inside of the train wet for embarking passengers. Other short term opportunities for improvement involve the system for setting train formations and for example the provision of additional first sleeper berths. The first class single sleeper coach on some long distance trains is regularly fully booked and it would make sense to add additional coaches as a priority to capitalize on this demand. There are several trains now operated by SRT that have a significant potential for tourists but the manner in which they are managed at the present time, there is little incentive for tourists to patronize these services. We consider if they were operated and managed more appropriately including targeted marketing and promotion, SRT could increase ridership and these could be attractive services for the domestic and international tourist market. Inter City Long Distance Services Premium services aimed at high value Thai travelers and tourists are a real opportunity for SRT as they improve line safety and the quality of rolling stock. Rather than the usual back packer tourist types these would be aimed at the silver haired mature traveler, mature family groups and business travelers who are willing to pay for comfort and exclusivity with the speed of the journey not being that important. Railways have been successful in offering some exclusivity on their trains for high value customers 7 linked with specific waiting/lounge facilities and VIP assistance. This is in effect 1 st class plus and would be a new approach for SRT. Clearly investments would have to be made in upgrading rolling stock and associated services. Quality catering provision is also a feature of these services. We are not really aiming at the level of service and pricing offered by the E&O service but there is adequate middle ground between the very luxurious services and the existing ordinary 1 st and 2 nd class trains. There could be good potential for this earning considerable value added for SRT. Steam Specials and Charters SRT is in a privileged position of having five working steam locomotives and it currently runs a limited number of steam excursions throughout the year between Bangkok and Ayutthaya. These are not particularly well presented using mainly third class coaches and basic catering. However cheap ticket prices mean they sell out quickly and are well attended. Rail enthusiasts will however pay considerable sums to see, photograph and travel on steam specials but they have to be arranged to maximize photo opportunities etc. and publicized in the right media and with the right agencies. The trip schedules involve stage managing the arrival of the locomotive, attaching to the train prior to departing and stops and movements throughout the journey to maximize photo opportunities. Also corporate events involving quality catering & souvenirs etc. are also popular and demand a price premium. SRT would have to invest in some refurbished heritage coaches, catering and staff training etc. however this is a real opportunity that should be examined seriously the occasional steam excursions operated between Bangkok and Ayutthaya. 7 Eurostar Business premium class, OBB Railjet and Premium class, AVE Spain preferente & club classes, etc. 20

37 The PSO services are not currently marketed and there are no plans to develop them, other than where possible replacing loco-hauled services with diesel railcars. The commuter lines cover many areas where extensive building and population growth along the route should be generating increased ridership. The problem is however the slow line speeds, long journey times, punctuality problems and frequency at peak times, which are not attractive even when the ticket is free. The ARL City Line is experiencing considerable growth as are the routes served by BTS and MRT. The potential traffic on the SRT commuter lines is not being served! The consultant rode the Bangkok Commuter section on the Mae Klong line from Wongwian Yai to Maha Chai and the service had many good features (Appendix 5). The trains were clean and the fans etc. worked. Seats were fine but uncomfortable for such a long journey of over an hour for a 30 km route. If line speeds were improved to half the journey time to 30 minutes and the service revised to offer better access to and from the city it is considered that ridership would increase. Station facilities would also need to be repaired and upgraded and a major marketing campaign promoting the new service would be necessary. It is suggested that this line be used as a trial to show the government and the public what can be done. There is some tourist potential on the second part of the Mae Klong line and thought should be given to linking its services better with the first part. Airport Rail Link The ARL project and current situation as described in Appendix 16 makes it clear that there is a significant misalignment between the objective of serving airport passengers and getting them into and out of the city rapidly and its success as a city commuter line. There needs to be a complete review of ARL and a comprehensive list of options available to meet its primary objective of serving airline passengers (Express line) and the needs of commuters. The current status and development of the Eastern Commuter line should be included in this review as it duplicates to a great extent the route. In fact, both the ARL and the Eastern Commuter line need to be evaluated together to determine the most efficient way to serve the commuter market of eastern Bangkok. Specifically, the ARL should be established as an autonomous business unit within SRT as an important step towards improving governance and instilling financial and managerial discipline in terms of accounting requirements and duties and responsibilities of senior management. There are two major issues regarding the manner in which ARL is now managed by SRT: Split management responsibilities of the two organizations does not work; there needs to be a single responsible organization; Accounts are split between the two organizations, compounding the difficulties in monitoring and managerial control over output For these reasons, we consider that establishing ARL as a business unit with full financial and managerial accountability Simplification of Tariff Structure SRT have a fairly complex ticketing structure that combines train type, class of travel and distance. It is further complicated by a long list of available supplements depending on train type and route and includes fans, air conditioning, sleeper berths, etc. that make it very 21

38 difficult for customers. SRT has rapid trains, ordinary trains, expresses and special expresses, Bangkok commuter and rural commuter, etc. With the introduction of business units it would make sense to try and simplify the types of train and ticketing offered to customers. It would also provide an opportunity to introduce modern ticketing systems with for example smart tickets or tokens that would improve management information and enable more automation and less cash handling. In addition it is suggested that yield management techniques be employed on long distance services particularly when the Inter City business unit is established. This will involve procuring adequate software but will enable train loading and revenue per train to be maximized. The systems match demand to supply adjusting ticket prices for early booking, off peak travel etc Fares and Fares Mechanism To be viable and sustainable SRT should charge a realistic price for their services and be able to adjust fares each year for inflation automatically. It is understood that an SRT committee can approve fares increases but these have to be in line with the government s transport policy and thus effectively have to approve by the MOT and the Cabinet. The PSO services are a particular problem and the MOT turned down a requested 10% increase earlier in the year. The consultant rode the Mae Klong line and a return journey of some 126 km (63 km return) cost less than a cup of coffee in Bangkok and less than the City line fare (Phaya Thai to Suvarnabhumi) 28.6 kilometers. Even though the government s free ticket scheme still applies to PSO services and SRT are compensated by the government for providing free tickets, the compensation should cover a realistic price for a ticket. At the moment after taking into account the PSO subsidy all PSO services are loss making. Determining realistic ticket prices for commuter and rural services is outside the scope of this short study but needs to be investigated to determine a new base for the fares and implemented as a matter of some urgency particularly as speed restrictions are taken off and services improve. Certain long distance fares appear to be at reasonable levels for the current service provided and close to the competition (bus and low cost airlines, as shown in Appendix 8) however these will have to be reviewed as line speeds and punctuality improve and new rolling stock enters service. It is recommended that the fare policy should be that of meeting the competition commensurate with the standard of services provided and that a system of periodic increases be implemented to keep up with future inflation (below are described some suggested techniques). While the future fare structure should be compared with costs in order to determine the rate of return to the company, the future structure should reflect the prices offered by competitors in order to optimize the SRT market share. For those social services (rail service for school children, for example) further adjustments in the fare can be made in conjunction with specific subsidies from the Government. However, the level of detail of SRT costs to operate specific services is not sufficiently detailed to make these determinations at this time. When improvements are made to the accounting and IT systems, such detailed cost information should then be used as tools for specific fare policies for services. Good fare regulation and adjustment help generate the necessary margins to innovate and to invest in order to meet the needs of the future, notably by providing high quality services and achieving productivity improvements. 22

39 It is recommended that PSO service fare be subject to an annual Fare Adjustment Mechanism (FAM) based on an agreed formula using government inflation indices. The mechanism used in Hong Kong includes a cut-off point to avoid small changes that would be expensive to implement. For example, if in a given year, the outcome of the calculations on the overall fare adjustment rate under the FAM is within the range of ±1.5%, there shall be no fare adjustment and the unadjusted percentage shall be rolled over to the next annual fare review for calculation Restructure Timetable to Match Demand After a detailed examination of the load factors of SRT commercial and PSO trains, it was discovered that many trains are operating at far below capacity, even those PSO trains operating free to passengers. As a point of departure to restructure SRT s timetable, we recommend that all trains with less than 40% load factor be more closely examined for either elimination or consolidation with other services Load Factors of Commercial and PSO Trains An examination of all commercial train services during 2012 revealed that 24 of 91 trains operated at less than 40% occupancy and for PSO services 65 out of 164 were less than 40% occupancy. Of course, the scope for reducing these services is complicated by the fact that in some cases, the outbound leg of the service may have low occupancy, though the return leg may have higher ridership. The future PSO system should include periodic evaluations of PSO train services their performance in accordance with load factor thresholds should be included as key indicators Reflect Realistic Running Times in Timetable At the present time, with poor track condition in many locations and rehabilitation and repair work in progress, normal running speeds that would enable trains to match the timetable are not possible. Therefore, many trains operate one or two hours later than the scheduled times causing passenger dissatisfaction and loss of confidence in SRT s performance. It is recommended as a short term strategy, to adjust the scheduled train timings to reflect actual operating conditions. When the track repairs/rehabilitation programs are complete, timings can be adjusted accordingly. For example, train #69 between Bangkok and Nong Khai, is shown in the timetable with a running time of 11 hours and 45 minutes. However, from discussions with SRT Marketing Department staff, the actual running time is generally about 14 hours. When the consultant rode this train, the arrival time in Nong Khai was, indeed, just after 10 am. Most passengers taking these overnight services are not so sensitive to travel times, but they are certainly negatively affected by trains that run late. If all travelers knew that the train would arrive in Udon Thani (where most passengers detrained) at about 9 am and 10 am at Nong Khai, there would likely be little loss of ridership but an increase in confidence that SRT can operate according to its timetable. 2.5 Red Line Impact on SRT The Bangkok Elevated Road and Train System (BERTS) commonly known as the Hopewell Project (Hopewell Holdings) was a failed project to build an elevated highway and rail line from central Bangkok to Don Mueang International Airport. Construction started in 1990, suspended in 1992 and cancelled in 1998 amid extreme legal controversy, only about 10% complete. Construction of the Red Line section from Bang Sue to Rangsit was started in 23

40 May 2013 and will use some of the concrete infrastructure from the Hopewell project. SRT is managing the construction and will be the operator of this line. Bang Sue is to become the transport hub of Bangkok linking urban transit (the Blue Line already serves Bang Sue, and two sections of the future Purple line as well as the Red line) and the long distance rail network of SRT. Contracts for construction were signed Jan/Feb as follows: Italian-Thai Development: 20.2 km of railway above existing SRT alignment, 6 elevated stations at Bang Khen, Thung Song Hong, Lak Si, Kan Kheha, Don Mueang and Rangsit. (21.24 billion baht with 48 months completion) Sino-Thai Engineering & Construction: Bang Sue Grand Station plus 6.2km elevated railway, Station at Chatuchak, depot and stabling facilities. (28.8 billion baht). In addition to the main route of the Red Line between Bang Sue and Rangsit, there are several extensions planned. These extensions include Bang Sue Taling Chan; Bang Sue Makkasan Hua Mak Hua Lamphong; Rangsit Thammasat University; Taling Chan Salaya and Don Mueang Phaya Thai. Originally planned to be complete by 2018, the recent adjustment to the specifications to include 4 tracks instead of 3, delay in implementation will be inevitable. SRT have a Project Management Consultant and a Construction Supervision Consultant responsible for the Red Line. The management of the interfaces between these and the two initial contractors together with the tender process for contract 3 M&E systems and Rolling stock must be difficult. There will be a procurement committee overseeing the project but SRT should have its own specialist unit managing such works working with just a supervisory engineer and the contractors. While the inauguration of the Red Line will be of great benefit and improve mobility of Bangkok s commuters and connectivity of the urban transit system, it is already having a negative impact on existing SRT passenger services in the Bangkok area. Specifically, as the operation of most SRT train services will use the Red line infrastructure, the importance of maintaining and improving the existing lines between Hua Lamphong and Don Mueang is not a priority to SRT management. The existing SRT infrastructure between these two stations is in poor condition and there are many improvement projects that are desperately needed. There has been identified a track strengthening program identified from Bang Sue (km 6+500) to a point just south of Don Mueang (km ) that includes the replacement of wooden and box sleepers with concrete sleepers, new ballast, replacing 80 pounds rail with BS 100 as well as improving the level crossings. The estimated cost is about 500 million baht; however, this request has not been approved by SRT management. The Red Line project appears to be suffering from the lack of a central program/project organization within SRT. The reliance on consultants and contractors for works contracts means there is little central knowledge and experience of large projects. Also a lack of post project appraisals mean that lessons learnt are not utilized for future projects (i.e. ARL) 8 Railway Gazette 24

41 2.6 Preconditions to Viability Safety Task Force and Audit During recent years, due to deferred maintenance of infrastructure and rolling stock, SRT has experienced a decline in safety resulting in many derailments that culminated in the closing of a major section of the Northern Line linking the popular tourist destination of Chiang Mai with the capital. This has led to negative perceptions of SRT s safety by foreign tourists as well as domestically due to extensive coverage of these accidents in the local press. While there are several track strengthening and rehabilitation programs under way, we consider that strong and visible actions are needed on the part of SRT to assure the public that safety is of the highest consideration and serious steps are being taken to improve the situation. We have proposed that SRT undertake a safety audit that would highlight the most serious safety risks and develop and implement a program to fix the most serious issues that will enhance the safety within SRT as well as to provide an opportunity for positive public relations in the near term to improve confidence of existing and prospective passengers. Specifically, we recommend that SRT set up the necessary procedures for the safety audit: Appoint Team leader (credible leadership record, driven & up to the task) Appoint small team seconded from the main engineering departments & traffic. Also include finance, procurement and project scheduling expertise to enable budgets & project planning documentation and monitoring & control reports to be generated on a timely basis for the Board. The team may be enhanced by recruiting a professional project manager from say a private sector construction company. Provide team with full authority to proceed (without the need to go through usual departmental hierarchy). Fast track access to top management The diagram below shows the importance of the safety audit to the strategy to increase line speeds and make the SRT network competitive with other modes of transport. Figure 7: Safety as the Key to Reviving SRTs Passenger Business 25

42 2.6.2 Management Strengthening through a PMO SRT needs to embark on a significant programme of rehabilitation and modernisation, however, SRT is organised functionally with its focus on production of services. Functional organisations are primarily focused on day to day operations are not equipped to handle large projects/change. Project work tends to involve activities that cut across multiple departments and has to be organised on a different basis. Activities and actions need to be taken rapidly and cannot really fit into the regular departmental hierarchy and decision making models. We have proposed the establishment of a Project Management Organization that would have the direct support from the SRT Governor and the authority to push forward critical procurements through all stages of evaluation, definition of specifications, proper selection of contractor and timely acquisition of the procurement. This PMO would consist of a few individuals, some from SRT and from outside the organization. The PMO Team Leader will likely be from outside SRT with a proven track record of strong managerial skills; the remainder of the team would be technical individuals from engineering, finance and traffic departments. The PMO would report directly to the Board of Directors and will be held accountable for progress in implementing major procurement packages. Appendix 17 describes the proposed PMO and how it would function within SRT. Figure 8 below illustrates the variety of tasks facing SRT. The variety of projects required to be managed and delivered present a complex programme requiring many different skill sets and experience i.e. IT, business unit formation, safety task force etc. The proposed PMO structure, shown in Figure 9, will include a Project Management Office to provide administrative and project management system support for the Project Managers and the Program Manager. Figure 8: Complexity of SRT Development Challenges Source: Consultants 26

43 Figure 9: Possible PMO Structure within Existing SRT Organization New PMO components Existing SRT organization Source: Consultants Central Procurement Department and Review of Procurement Procedures One of the critical weaknesses of the SRT organization is the lengthy time it often takes for procurement of necessary items for improving the infrastructure as well as for acquisition of new and rehabilitation of locomotives and rolling stock. The main problem is the SRT organization structure is not geared to expediting procurement functions but rather is focused on day to day operations of the railway. We propose the establishment of an organizational unit within SRT that is designed to handle procurement requests and can move these requests on an expedited basis. In addition, a review should be conducted assessing the relevance of the Government s procurement rules to the railway business with a view to adapting more commercial private sector procurement systems. It is suggested as an option to include the central procurement department within the planned PMO Customer Focused Business Units with Full Accountability Rail transportation is a business, which competes with other modes of transport. Railway reform around the world and research suggests that It unlikely to successful when run as a quasi-government department using government procedures subject to ever changing political interference. Even where railways are publicly owned, research suggests that passenger rail transport operators are successful where they exhibit the attributes and outlook to their business that are generally considered private sector attributes. 27

44 Figure 10: Passenger Railway Attributes and Outlooks Modern passenger rail businesses should be demonstrating attributes and outlooks such as: Strong outcomes on operating ratios, fare-box ratios, and other key financial indicators Strong ridership and a track record of growing passenger markets. This may include working with growth targets Innovation and creativity in business outlook Flexible, practical institutional and governance frameworks that allow operators to optimize performance via self-management and strategic license Independence of the rail operator, so far as is practicable, in setting business strategy and making major investment-related decisions Effective relationships with stakeholders to underpin transit-friendly land use changes and real estate development opportunities Openness to the breadth of business possibilities that passenger rail has traditionally offered (such as real estate), in addition to sensitivity to new and emerging opportunities Mechanisms and policy frameworks to deliver value capture. Effective, targeted, optimized fare structures Customer service Attention to different market segments Accountability. Source: The Cooperative Research Centre for Railway Engineering and Technologies (Rail CRC) Australia SRT needs to reorganize its business to focus on the customer and the services it provides. This should not be limited to basic units such as Freight and Passenger but also include units covering specific businesses characterized by route, type of service and type of customer, the competition, etc. so that managers can concentrate fully on that business. The existing SRT organization structure contains several business units but these have no budgetary independence nor does management have accountability based on performance. Even the Airport Line, which is operated under the name of a separate company, turns over all revenue to SRT and does not have authority to procure needed spare parts or to propose new capital expenditures. A case study involving the Airport Line was described in detail in Appendix 16. In the future, these separate autonomous operational units within SRT should be structured as true business units with financial authority to receive and spend money and their managers should be held accountable for operating performance and financial results, whether these be profit or loss making entities. The use of separate corporate entities for these units, 100% owned by SRT (holding company approach) would provide added benefits in terms of governance, responsibility and concentration on the specific business activity. Such a move would also facilitate any future private sector participation if required. Examining the existing passenger railway service portfolio we recommend breaking up the passenger business into five core business units: Intercity Regional Commuter ARL Red Line PSO Services The existing split of PSO services into four train categories at SRT is shown in Table 9. We propose that these four categories be combined into only three categories, consistent with our proposed creation of financially autonomous business units as shown in Table

45 Table 9: Existing PSO Business Split (2012) Service Trains per day Passengers Bangkok Commuter 46% 10 m Local Commuter 32% 10.1 m Ordinary 20% 9 m Mixed 2% 0.1 m Total 100% 29.2 m Note: PSO 68% of total operations 29 million passengers Commercial (non PSO) 32% 11 million passengers Table 10: Proposed Business Unit Reorganization (PSO & Commercial) New Business Unit/Service Old Service Trains per day Passengers PSO SERVICES: Commuter Bangkok Commuter 31% 10 m Regional Local Commuter 22% 10.1 m Regional Mixed 2% 0.1 m Intercity Ordinary 13% 9 m Total PSO 68% 29.2 Intercity Commercial 32% 11 Total 100% 40.2 m Source: Consultant Commercial services would be renamed Inter City and as well as non PSO services will include the Ordinary category of PSO services (middle distance). Commuter would be the Bangkok Commuter services which compete with the other urban transport operators of rail (BTS & MRT) and bus (MRTA & private). Local Commuter would be renamed Regional services. Table 11 below summarizes our proposed business units, distinguished by PSO and non PSO services. Table 11: Proposed Business Unit Summary New Business Unit Commuter Regional Intercity PSO Total PSO Intercity non PSO Total Passengers 10 m 10.2 m 9 m 29.2 m 11 m 40.2 m ARL and the Red line would form the other two business units. It is hoped that the merging of Ordinary PSO services within Intercity with its mainly commercial focus would reduce the reliance on support and move the old ordinary services towards profitability. The following chart provides only an illustration of how the units would work within SRT. Clearly common engineering, operational and administrative tasks would not be split and duplicated in each business unit, these would be accommodated for example, within the infrastructure division, Operations Fleet division. Finance, IT, HR etc. would remain group wide support functions. Maintenance depots and rolling stock would be reorganized into a fleet division with their services essentially being contracted with the Operation business units. The organization shows a separate Infrastructure Division that may at a future date charge a track access fee to operators for using the infrastructure or just become a maintenance body if the government takes over infrastructure ownership. 29

46 Figure 11: Possible SRT Organization with Business Units For example the Inter City business would be a single team including operations staff running the Inter City trains staff involved in marketing inter city services, ticketing, planning, finance, etc. The consultant sees this as an important step in enabling SRT to revitalize the passenger railway business and offer customer focused services to the public and increase ridership. The following diagram demonstrates the process involved. Figure 12: Business Units as Key Components in Future Service Development The Consultant suggests that the business unit consist of separate companies owned by SRT using SRT as a holding company. This would provide management with complete autonomy to operate the businesses with the usual rules and constraints of corporate 30

47 governance. It would also facilitate any future changes involving Private Sector involvement i.e. through PPPs, concessioning etc. Impact on Employment Of course, in order to accommodate the recommended creation of autonomous business unites, the government s current restrictions on recruitment linked to staff retirements may have to change for any successful reorganization to take place; however, it is not expected that the impact on total staff size will be significant. Only through detailed assessment of the subsequent TA team can the precise recommended staffing be determined with accuracy. For example, the setting up of autonomous business units will involve some roles and skill sets that existing SRT staff do not have; some new staff will have to be recruited. As a result of implementing IT solutions, there will likely be a reduction in some positions so the net change in SRT employment is likely to be marginal Time Line of Capital Improvements Due to the SRT s legacy of deterioration of infrastructure and the need to repair and procure new locomotives and rolling stock, the time line of capital improvements will have a direct impact on future ridership projections. Details of the projected timing of each of the major infrastructure and rolling stock acquisitions are shown in section Preconditions for Growth. Most of the track strengthening and improvement projects are expected to be complete by mid Five track doubling projects are expected to be complete by 2017 and six additional projects by mid Thirty new locomotives are expected for delivery by 2016 with new passenger train sets for overnight services to be on site also by 2016 and 75 diesel rail cars by In addition to these improvements, there are three new line extensions proposed; the two major ones involve extensions on the northern line from Den Chai to the Lao border at Chiang Khong, via Chiang Rai; and the second one on the northeast line from Ban Phai to Nakhon Phanom on the Mekong River on the Lao border. Feasibility studies have already been prepared for these two lines and detailed design completed for the line to Chiang Khong. The third new line is primarily of benefit to freight traffic to an inland container depot. We are not enthusiastic about the prospect of SRT embarking on the construction of new lines. While new lines may result in additional traffic for SRT (predominately freight traffic) new line construction may distract management s attention from the more urgent tasks of improving safety, reliability and effective management. We have not included any provision in our passenger forecasts for impact of these new lines, should they be constructed. The table below sets out the estimated time line of major events that will shape the future of SRT: 31

48 Table 12: Time Line of Major Improvements Safety task force - resolve critical safety issues Complete improvements for track, bridge & fencing Complete signals & telecom Complete double tracking Procurement of rolling stock Red Line Project Implement management accounting Establish business units with accountability New Line Extensions Property Development and PPPs Sweden, Hong Kong and Singapore use a number of property development models to support rail projects and ongoing rail operations, particularly in the urban transport area. SRT do earn valuable rentals, etc. from their property operations 1,703 million baht in 2012, however we understand that there is good potential for improving performance and growing the business. The property side of the ARL is currently well below the levels expected in the original feasibility study and business plan. It is understood that SRT is examining Public Private Partnerships (PPPs) as means of developing land at key stations and depots. The new station at Bang Sue is being considered as a potential joint development candidate. The Consultant supports this approach, which can include facilities at existing stations and development of land at depot areas. Not only would PPPs provide private sector finance they would more importantly add private sector management and marketing skills to the project. The only caution would be that PPPs are particularly complex and difficult to deliver requiring skills SRT do not currently have. Assistance would be needed and should be of a high standard to deal successfully with private sector advisors. In addition, such partnership contracts usually require specialist monitoring and control mechanisms that would have to be set. The consultant is aware of vast tracks of sidings in Makkasan and Bang Sue being used to store redundant assets /scrap. Many of these areas are totally overgrown and have not been used for anything else for a long time. Clearly if these areas were cleared of scrap, the land could be redeveloped 9. We investigated the legal issues relating to sale of scrap by SRT and found that no special approval is needed from the Cabinet Examination of rolling stock availability data not in service items locos 107, passenger coaches 433, Diesel Rail Cars 78 and freight wagons 1,687 suggest that as much as 30 km of track length may be occupied with redundant/ scrap items. 10 The old wagons, coaches, locomotives and rails rusting are equipment of train operation. Moreover, the old wagons, coaches, locomotives and rails rusting are not immovable property. Therefore, the SRT can sell them without the Cabinet approval. Legal opinion by our legal expert; the complete opinion is shown in Appendix 7. 32

49 2.6.7 Advertising and Sponsorship Advertising is an area of potential improvement for SRT s passenger business. Although the bigger stations do have some poster sites, SRTs current situation is unlikely to be an attractive prospect for many advertisers. SRT has much to learn from the Urban Transport operators in Bangkok, BTS and MRT. Stations are full of posters, led TV screens, etc. and the trains are covered in laminates advertising anything from mobile phone networks, banks to beauty products. Inside the trains there are posters, led screens, etc. They also advertise on tickets. Clearly as SRT services improve and particularly new rolling stock is introduced all these possibilities should be pursued with companies and advertising agencies. One useful approach may be to approach companies to sponsor rehabilitation of some of the smaller stations. For example, sponsored bench/seating provision on the Mae Klong line. 2.7 Traffic Demand Forecasts to Preconditions for Growth From 2005 to 2012 SRT passengers have declined consistently. For example, PSO passengers have fallen by an average of 2.3% annually, commercial passengers by 4.0% and in total the annual passenger decline has been 2.8% per year. This decline is even more dramatic when it is considered that most of the PSO trains operate free of charge for third class passengers. Without improvements in safety, infrastructure and rolling stock condition, there is not likely to be any reversal of this trend for the future. The following summarizes the major improvements to the SRT organization, infrastructure, locomotives and rolling stock that will affect SRT passenger services in the future. In our Interim Report, we pointed out that several of the studies for double tracking and new lines used the National Model (NAM; see Appendix 10 for full description of this model) to forecast future passengers and freight that would be moved over these routes. In some cases, these forecasts appeared to be quite optimistic, in some cases passenger traffic would increase by a factor of more than 2 if a section of line were to be converted to double track. We concluded that simply the application of a model to project SRT passenger traffic is not a realistic method due to the consistent historical decline in ridership and the need for significant capital improvements to the infrastructure as well as for acquisition of new locomotives and passenger coaches. In addition, in this report, we have emphasized the importance of SRT adopting a more business approach in its management of the company focusing on improving the quality of services provided. Any future traffic growth is contingent on at a minimum, the completion of the infrastructure and rolling stock investment program so that SRT can offer competitive transport services that are attractive to existing and potential customers. Based on this reasoning, we did not use the National Area Model in developing our traffic forecasts but quantified the likely impacts of current and future infrastructure improvement programs as well as the acquisition of new rolling stock and adopting a more aggressive approach to marketing and rebranding of new services. Details of all our assumptions underlying our traffic forecasts are described in the following sections Targets for Growth Since 2005 SRT ridership has experienced steady decline each year as shown in Appendix 13, from 49.6 million passengers to 40.8 million. The primary reason for this decline is the 33

50 poor condition of track infrastructure and the ageing fleet of locomotives and rolling stock; in addition there has been strong competition from bus and low cost air carriers. It is reasonable to assume that as the railway is modernized (completion of the track strengthening, rehabilitation and line doubling projects, the ageing locomotive and coach fleet is replaced with new units), that ridership should eventually return at least to the 2005 levels. With rebranding of services, improvements in running times and reliability, further ridership increases should be possible. An analysis of the ridership data in Appendix 13 shows the gap in ridership between 2012 and amounts to 8.86 million passengers 12. This is the amount by which 2012 ridership should be expected to increase once infrastructure is rehabilitated and new locomotives and rolling stock procured 13. We have assumed that as the modernization takes place, this gap in ridership will return to SRT, in addition to natural growth due to population increase as well as growth due to the introduction of new services will increase SRT ridership Safety Improvements We consider that the improvement of safety is the most urgent task, due to many recent accidents that have resulted in the temporary closure of the Northern line in order to execute emergency repairs. We have proposed to be undertaken a safety audit of SRT to ensure that all infrastructure and rolling stock on all major routes is safe for train operation and that the travelling public can be assured that all measures are being undertaken to ensure safety as the rehabilitation and modernization program continues. We have projected that this safety audit and the creation of a Safety Task Force would be complete during Urgent Improvements to Infrastructure Hua Lamphong Don Mueang This track section is in poor condition and it is not included in the current track strengthening or rehabilitation programs. There are speed restrictions of 40 km/hr over most sections and 30 km/hr over many bridges. In addition, during a previous visit to Hua Lamphong station by our study team members, it was discovered that much of the cabling for signals is old and in a state of disrepair, causing frequent signal failures and even a complete temporary shutdown of the station a few months ago. Upon discussing this issue with SRT management, we were told that due to the planned implementation of the Red Line project, the request for new cabling, amounting to about 30 million baht was rejected. There has also been a track strengthening program identified from Bang Sue (km 6+500) to a point just south of Don Mueang (km ) that includes the replacement of wooden and box sleepers with concrete sleepers, new ballast, replacing 80 pounds rail with BS 100 as well as improving the level crossings. The estimated cost is about 500 million baht; however, this request has not been approved by SRT management. Another serious operating problem on this line is the several level road crossings that often result in long delays to train service while waiting for road traffic to clear the crossing. The only real solution to this problem is grade separation which is, of course, an expensive undertaking ridership minus 2012 ridership million PSO and million commercial train passengers 13 As there are some anomalies for a few train types (small increases in ridership between 2005 and 2012), we used the total ridership for PSO and Commercial trains, respectively, to apply to estimate total SRT ridership after modernization 34

51 Based on an inspection of this line by members of the study team, from the train as well as from on the ground inspection, the condition of the line from Hua Lamphong to Don Mueang should be identified as a high priority for completion. The Red Line project was originally planned to complete by 2018 however with the recent change in scope of the project to construct 4 tracks instead of 3 the realistic opening date we likely be later. The expansion to 4 tracks will likely require additional EIA investigations, which typically take 2 years of more to prepare. Our conclusion is that the line between Hua Lamphong and Don Mueang will continue to be a critical link in the SRT s passenger network for several more years. Even when the Red Line is complete, the plan is for some rail service to remain between Bang Sue and Hua Lamphong, and freight trains will continue to use the existing line to Don Mueang. The condition of the track and other essential infrastructure (such as the signal cabling at Hua Lamphong) also needs to be upgraded to a satisfactory condition at least for another five years; probably longer. We recommend that 530 million baht should be added to the approved budget for urgent improvement of infrastructure between Hua Lamphong and Don Mueang Track Rehabilitation Phases 5 and 6 of the 176 billion baht Rail Infrastructure Development Program include rehabilitation of lines in the Northeast are in progress and expected to be complete by December Track Strengthening Track strengthening is defined as replacement of only rails and sleepers. There are 8 track strengthening projects ongoing and are projected to be complete by mid Other projects are under consideration, including the section Don Mueang to Hua Lamphong, as mentioned previously. It has been estimated that 300 million baht is required for needed improvements. Rehabilitation of this section should be given urgent attention now by SRT Track Doubling Five track doubling projects were incorporated in the 176 billion baht Rail Infrastructure Development Program (shown previously in Table 3) with feasibility studies and detailed design complete and lack only the EIA studies. These five projects have been carried forward to the Two Trillion baht Infrastructure Program and construction is expected to be complete by There are six additional line doubling projects (shown previously in Table 4) and are also included in the Two Trillion baht Infrastructure Development Program. These six project still need to have feasibility studies, detailed design and EIA evaluations completed. Construction of these six projects is expected to be completed by mid Locomotives and Rolling Stock It is proposed to acquire 20 new locomotives for freight and passenger service; previously it was intended to refurbish 56 locomotives with the same funding. As specifications for these locomotives are still under review, tenders have not yet been submitted. It is intended that these locomotives would be acquired by There are also 115 passenger coaches on order from a supplier in China and are expected to be delivered by These will be 1 st and 2 nd class sleeping coaches with head end power cars for overnight services. It has also been proposed to acquire 75 new diesel rail cars by 2018, though this plan has not yet been approved by SRT management. It is 35

52 proposed to restructure some PSO services to eliminate those services not needed or to combine other services, thus saving required numbers of rolling stock to support these services. It is proposed to substitute the new DRC s for the ageing fleet of third class coaches and locomotives to improve service reliability New Lines There are two proposed new line construction projects included in the Rail Infrastructure Development Program (176 billion baht) that would clearly have an impact on future passenger traffic: (i) Den Chai Chiang Rai Chiang Khong and (ii) Ban Phai Nakhon Phanom. Feasibility studies for both of these projects have been completed 14 in 2012 and construction is expected to be complete by Based on information shown in the feasibility studies, the forecasted traffic on the first project (to Chiang Khong) annual passengers were projected to be 2.7 million by The feasibility study for the second new line to Nakhon Phanom projected annual passengers of 6.9 million by We consider that these forecasts are quite optimistic and doubt that these new lines will be constructed. Therefore, in order to avoid projecting overly optimistic passenger forecasts, the forecasted ridership from these proposed new lines have not been incorporated in our 2020 traffic forecast results as shown in Table Forecast Assumptions The following are the assumptions that underlie the traffic forecasts over the forecast period These include projected dates of completion of track repair and rehabilitation programs, double tracking and acquisition of new locomotives and rolling stock. Another important element is the completion of the safety audit that will likely increase passenger confidence in SRT services. There are three major elements that comprise our forecast methodology: (i) annual growth rate due to population increase; (ii) growth due to infrastructure improvements to bring ridership to 2005 levels; and (iii) new growth due to new rolling stock acquisitions, rebranding of services and strong marketing of existing services making them more attractive to the travelling public Population Growth There will likely be an annual increase in SRT ridership due primarily to population growth in the country. Due primarily to recent political unrest in the country, the Thailand Finance Ministry has lowered its GDP estimate for 2013 from 3.7% to 2.8%. Projections for 2014 have also been downgraded to 4% from an initial estimate of 4.9% 15. While this 4% GDP increase in 2014 may have some impact on passenger train ridership, typically passenger travel is related more to population increase. In order to avoid overly optimistic forecasts, we have selected population at the primary driver for normal passenger ridership growth for SRT. Thailand s current population growth is estimated by ADB 16 at 0.8% annually. Some future projections of population growth 17 show a gradual decline in population to 2020; specifically between 2010 and 2015 a growth rate of 0.51% and to 2020 a rate of 0.48%. For our projections of SRT passenger traffic, we have incorporate population growth rate of 0.5% 14 The Construction Project of Den Chai Chiang Rai Chiang Khong Railway; June, 2012 and Feasibility Study of Bu Yai (Khon Kaen) Mukdahan Nakhon Phanom New Railway Line Construction Project; January Basic 2013 Statistics, Economic and Research Department, Development Industries and Policy Research Division, Asian Development Bank

53 annually from 2013 through However, this natural increase in SRT ridership on account of population growth will take place only after the safety audit is complete and confidence in SRT is restored by the travelling public. Another assumption is that only after track strengthening and rehabilitation programs are complete and new rolling stock begins to arrive, SRT passenger ridership will increase in proportion to population increase. Using these criteria, SRT passenger ridership is projected to grow by 0.5% annually, plus the impact of further track doubling and new rolling stock acquisitions. This 0.5% is smaller than the assumed growth rate incorporated in the previous new line feasibility studies; 2.7% per annum for the Den Chai Chiang Khong line and 1.7% per year for the Ban Phai Nakhon Phanom line Impact of Modernization Program Based on the infrastructure projects to improve the track and acquisition of new rolling stock we estimate that SRT ridership could increase to the level achieved during The following are the major components of the modernization program and our projected impacts on ridership. Table 13: Ridership Impact of Modernization Program Component Completion Date Track rehabilitation % Track strengthening Part Part New locomotives % New DRC s % Line doubling Part 1 Part Source: Consultant s estimates through discussion with SRT Other Improvements Percentage of the Gap Ridership Achieved (2005 levels) 30% in total Phase in over 3 years % in total Phase in over 3 years In addition to the infrastructure improvements and new locomotives mentioned previously, there will be additional improvements that should result in increased ridership during the forecast period. These include acquisition of 115 modern 1 st and 2 nd class sleeping cars for some high-end overnight services in major markets, rebranding of services with new rolling stock as well as improved running times and consolidation of train types. The 115 modern sleeping coaches are on order from China and should be delivered by They include 1 st and 2 nd class sleepers, restaurant cars and head end power cars. Assuming 10 coaches per train set this will provide 9 full train sets plus some spare coaches that can be substituted during major repairs. While it is not confirmed, it is likely that there will be three sets operating on the north, north east and southern lines, respectively. With 10 coaches per set including one restaurant and power car, there will likely be 8 revenue coaches with an average of 40 passengers per coach. If the three sets are operated daily on each line this would yield approximately 350,000 passengers per year per line, for a total of 1.05 million passengers per year. These passengers would be incremental to ridership on existing trains on these routes. Rebranding of services will involve a consolidation of the many train types now operated (mixed, ordinary, rapid, express, special express) into two types of trains, with a simplified fare structure. For major routes, these services could be operated on an hourly or clock face 37

54 timetable that is easy for customers to remember and to use on a regular basis. As new rolling stock is introduced and track rehabilitation and doubling programs are completed rail service should be faster and more time competitive with busses and rail should make some inroads into the bus market share on some routes. While it is difficult to predict with certainty, we estimate that SRT ridership should increase by 20% between 2017 and 2020, as the modernization programs are completed. The existing Mae Klong service can be improved through better promotion of the service as well as improved time keeping that is reflected in updated and realistic time tables. It is estimated that ridership can be increased by as much as 20% through concerted efforts. It is projected that this growth would be phased in starting in 2017 reaching full potential of 20% by The following table summarizes the likely impact on passenger ridership of these other improvements to SRT services. Table 14: Ridership Impact of Other Improvements Component Completion Date Ridership Increase Acquisition of 115 new coaches million passengers Rebranding of services % ridership increase, phased over 3 years Annual population growth From %/year Improvements to Mae Klong service From % increase, phase in from Source: Consultant s estimates through discussions with SRT Assumptions during the Forecast Period Near Term Projections ( ) 2013 Considering that during at least 2.5 months (16 September 30 November 2013) the Northern Line to Chiang Mai has been closed for repairs, the historical decline in Northern Line traffic will become worse. This is calculated conservatively in proportion to the number of days (76 days closed out of 365 = 21% of the year). Projections for 2013 passengers reflect the historical growth rates ( ) plus the Chiang Mai line closure penalty for Northern Line trains. We have also assumed that the average annual decline in ridership will continue at the average annual rate during for each train type and region; the overall passenger decline was found to be 2.8% (as shown in Appendix 13) As the SRT safety audit is expected to be complete during 2014 as well as most of the track rehabilitation programs. Based on the assumed increased confidence of the travelling public in the security of SRT services and the improved infrastructure which should result in improved train operations, we have assumed that no further decline in ridership will occur during 2014 and will be essentially the same as during Ridership growth consistent with the factors identified in the previous section and summarized in Table

55 2.7.4 Traffic Forecast Results The following tables show SRT number of passengers during 2012 and projected by the Consultant for 2020; it should be noted that these forecasts include the projected impact of improved infrastructure and rolling stock but exclude new line construction. In section the rationale of the methodology employed are described. It can be seen that SRT total passengers are projected to increase from 41 million in 2012 to just over 57 million by Table 15: 2012 SRT Passenger Ridership NUMBER OF PASSENGERS Northern North Eastern Eastern Southern Mae Klong Total 1. PSO TRAFFIC MIXED 155, ,918 ORDINARY 2,476, ,733 3,071,132 2,766,046 9,027,039 BANGKOK COMMUTER 2,104, ,720 2,789, ,273 3,547,817 9,965,853 LOCAL COMMUTER 1,157,857 4,667,959 4,009, ,975 10,080,734 Total PSO Passengers 5,738,729 6,045,412 5,860,431 7,792,180 3,792,792 29,229,544 Line percentage of total 20% 21% 20% 27% 13% 100% 2. COMMERCIAL EXPRESS 195, , ,081 1,383,337 INTERCITY (EX) 723, ,316 INTERCITY (SP-EX) 278, , , ,274 RAPID 1,552,986 3,184,571 2,908,236 7,645,793 SPECIAL EXPRESS 314, , ,850 SP-EXPRESS 31,146 31,146 SP-EXCURSION , ,332 Total commercial 2,341,769 4,654, ,581, ,579,048 Line percentage of total 20% 40% 0% 40% 0% 100% Total all traffic 8,080,498 10,700,089 5,860,655 12,374,060 3,793,290 40,808,592 Line percentage of total 20% 26% 14% 30% 9% 100% PSO 71% 56% 100% 63% 100% 72% Commercial 29% 44% 0% 37% 0% 28% 39

56 2020 Table 16: Projected SRT Ridership 2020 NUMBER OF PASSENGERS Northern North Eastern Eastern Southern Mae Klong Total 1. PSO TRAFFIC MIXED , ,530 ORDINARY 3,346, ,646 4,150,788 3,738,449-12,200,492 BANGKOK COMMUTER 2,747, ,528 3,641,605 1,123,140 3,859,914 12,239,062 LOCAL COMMUTER 1,618,861 6,526,521-5,606, ,427 14,037,323 Total PSO Passengers 7,713,346 8,357,694 7,792,392 11,019,633 4,145,341 39,028,408 Line percentage of total 23% 25% 24% 33% 13% 118% 2. COMMERCIAL EXPRESS 410,405 1,113,113-1,374,414-2,897,932 INTERCITY (EX) - 1,021, ,021,781 INTERCITY (SP-EX) 379, , ,223-1,104,319 RAPID 2,224,856 4,562,315-4,166,429-10,953,599 SPECIAL EXPRESS 729, , ,669-2,003,451 SP-EXPRESS SP-EXCURSION , ,123 Total commercial 3,743,364 7,298, ,041, ,083,431 Line percentage of total 26% 51% 0% 49% 0% 127% Total all traffic 11,456,710 15,655,902 7,792,511 18,061,155 4,145,561 57,111,839 Line percentage of total 24% 33% 16% 38% 9% 120% PSO 67% 53% 100% 61% 100% 68% Commercial 33% 47% 0% 39% 0% 32% 40

57 Sensitivity Tests In order to reflect the possibility of some elements of the modernization program taking longer than anticipated as well as the risk of some other recommended actions not having the desired impact on ridership we have made two alternative scenarios; the first moderately pessimistic and the second very pessimistic. The assumptions incorporated in each are shown below. Table 17: SRT Ridership Scenarios Scenario Achievement of 2005 Ridership Levels 115 New Sleeper Coaches Rebranding Mae Klong Revival Base case (most likely) 100% % 20% Moderately Pessimistic 50% % 10% Very Pessimistic Continue historical decline Never 0 0 Source: Consultant s estimates Table 18: Traffic Forecast Summary (Millions of Passengers) Scenario Base Case PSO trains Commercial trains Total Moderately Pessimistic PSO trains Commercial trains Total Very Pessimistic PSO trains Commercial trains Total Source: Consultant s estimates Revenues and Expenditures We have made a rough estimate of the future financial situation of SRT. It should be emphasized that this was a very rough estimate of cost changes with future traffic projections. SRT financial data does not allow a detailed calculation of the true level of short term variable costs but we have prepared this demonstration to indicate that improvement to SRT finances is indeed possible and that further refinement of the cost implications should be undertaken at a later date, when improvements are made to the SRT management accounting system. In our SRT financial projections shown in Appendix 11 we have assumed that maintenance costs will be reduced as new equipment is acquired; this reduction has been taken as 2.5% per year. Total operating costs have been assumed to increase at the rate of marginal costs. While detailed cost information is not available for SRT, we have assumed that the transportation cost of 6,845 million baht of total operation cost of 13,380 million baht would represent short term variable cost changes (51% of operating costs). Management costs are assumed to increase by 5% per year and other costs by 3% per year. Pension costs are assumed to be constant from 2013 onwards. Based on these assumptions, contribution margin will turn up from negative to positive from year 2017 onwards which reflect the 41

58 improvement of passenger service, increase in number of ridership, better maintenance cost control. For the Airport Line financial evaluation shown in Appendix 12, assumptions regarding ridership per day from both express line and commuter line are expected to increase from 44,000 passengers per day in 2012 to approximately 74,000 passengers per day in It is assumed that capacity will expand to 2020 resulting in 88,500 passengers per day in Ticket prices are assumed to be 100 baht for the Airport Express train and 40 baht for the City Line. 2.8 Road Map and Implementation Plan The following diagram (Figure 13) provides a simple summary overview of the actions required for SRT to break the circle of decline within the constraints of a narrow gauge conventional rail network. Details of these items were described in detail in the section 2.4. Existing Situation and Suggested Improvements & section 2.6 Preconditions to Viability. Some of these actions can be commenced in the short term but others take longer to develop or depend on other actions to take place first. Figure 14 below estimates the approximate SRT development timeline (action, duration, etc.) based on the review of SRTs current status and pipeline of development projects. The ridership impact of implementing the Road Map and Implementation Plan were incorporated in the passenger forecasts for 2020 as shown in Table 16 and described in detail in section 2.7 Traffic Demand Forecasts to

59 Source: Consultant Figure 13: SRT Strategic Framework Action Required 43

60 Figure 14: SRT Strategic Framework Action Timeline Source: Consultant & SRT data 44

61 3. PREPARATION OF AN SRT PASSENGER RAILWAY STATION MANAGEMENT AND OPERATIONS MANUAL The primary focus of this chapter is to identify improvements needed at SRT stations as identified through our consultants visits to stations as well as from the results of passenger interviews. We will also highlight the content of existing station management and operations manuals and to prepare a draft revised manual focusing on improved customer satisfaction, station integration, safety and comfort/architectural attractiveness. 3.1 General Condition and Appearance of SRT Stations The Consultant has observed that the SRT stations in general are in good condition and the appearance based on the old building stock is still attractive. Nevertheless, the last major interior renovation at Hua Lamphong station was carried out 15 years ago. The Consultant recommends that a detailed inspection be conducted at the station and a renovation budget be prepared for In particular, Hua Lamphong station has good facilities for tourists and security personnel have been observed on several occasions to be doing their job properly. For example, there is a schematic of the station on the wall facing arriving passengers. Each facility is marked clearly with a circled number (taxis, busses, ticket windows, etc.) and the same number is shown on a large sign at that facility. On occasion, many railway stations are attractive places for homeless people to sleep or to while away the hours; Hua Lamphong is no exception. However, on several occasions during the Consultants visits to the station, security personnel were observed to be removing sleeping vagrants from benches in the waiting room as well as in the platform area. Each station master was interviewed by the Consultant and the primary issues regarding the quality of station operations and station management requirements were discussed. While there were several items identified as needing attention at each station, outlined in the following condition report section, the primary constraint of each station master was said to be the fact that there is little or no budget available for emergency repairs and the procedures for requesting such funds is difficult and these requests are often rejected. As a case in point, it was discovered that the replacement of signaling cables at Hua Lamphong, which has been the cause of many delays and accidents, has been proposed but rejected by SRT management. The main reason for this rejection is due to the belief that with the opening of Bang Sue station, Hua Lamphong will no longer be the primary rail station in Bangkok. 3.2 Station Reconnaissance Selected Stations In the Terms of Reference for this project it was stated to undertake a detailed reconnaissance of three preselected passenger stations, two of which will be Bangkok s Hua Lamphong Station, and the main railway station in Chiang Mai. SRT will select a third station, in consultation with the TA consultant during the inception of the project. There was also to be conducted a passenger survey at each station to determine from a representative cross section of suggestions from national and international passengers for improvements at each station. So, in summary, there was to be (i) detailed reconnaissance of three stations and (ii) a passenger survey conducted at each of the three stations. During the Inception Phase of the project, Nakhon Ratchasima (Khorat) was selected at the third station. However, during the month of September, due to continued deterioration of the track condition and several derailments, SRT management decided to close the section of 45

62 the Northern Line between Sila At and Chiang Mai in order to complete emergency track repairs between 16 September and 31 October. As this closure was subsequently extended to 30 November it was clear that another station needed to be identified to substitute for Chiang Mai for the purpose of undertaking the passenger survey. It was agreed between the ADB TA consultants and SRT that this station would be Surat Thani. So, the three stations where passenger surveys were conducted were: (1) Hua Lamphong, (2) Nakhon Ratchasima and (3) Surat Thani. However, in order to undertake as complete a station reconnaissance survey as possible, it was determined to include Chiang Mai as the temporary halting of passenger service at that station would not affect our condition survey of the station. Therefore there were two groups of stations included in the two surveys, as summarized below: (i) Detailed Station Reconnaissance 1. Hua Lamphong 2. Chiang Mai 3. Nakhon Ratchasima 4. Surat Thani (ii) Passenger Surveys 1. Hua Lamphong 2. Nakhon Ratchasima 3. Surat Thani While only four stations were selected for the detailed station reconnaissance, there are many other stations with different characteristics and should also be included in future evaluations and recommendations for improvements. In the condition survey of these four stations, we identified several critical items that should be repaired as top priority projects at these stations. When these items are completed, we suggest that capital improvement budgets be identified for each major station to ensure that in the future needed investments will be included in the capital planning of the Company Station Characteristics Hua Lamphong is the main railway station in Bangkok, serving all of SRT s long distance trains as well as the sizable number of Bangkok Commuter trains that serve many intermediate points. There are currently between 128 and 130 trains operated each day on a regular basis, plus occasional special tourist trains. Annual passenger volumes at Hua Lamphong amount to about 9 million. Chiang Mai station is located in the popular resort city in the northern part of the country served by 12 trains per day. It is a popular tourist destination as well as a business center and the station handles about 375,025 passengers each year. The station Nakhon Ratchasima (Korat) is a major regional center on the north eastern line of SRT, handles about 636,010 passengers through the station and trains each day. Surat Thani is a station in southern Thailand popular with tourists visiting Koh Samui and other neighboring islands by connecting bus and ferry services. There are 32 trains each day through Surat Thani moving 392,161 passengers Survey Timing In order to maximize the use of our resources, we decided, in cooperation with SRT and ADB, to undertake the station reconnaissance at the four stations (Hua Lamphong, Chiang Mai, Nakhon Ratchasima and Surat Thani) and the passenger survey at the same stations, with the exception of Chiang Mai. Interviews with the station master and station visits took 18 Source of trains per day SRT Marketing 46

63 place on the 7 th October at Hua Lamphong, at Chiang Mai on the 15 th October, 11 th October at Nakon Ratchasima and Surat Thani. Passenger surveys were undertaken at each station (with the exception of Chiang Mai) starting on the same date as the station master interviews and continued for 5 days (7 days in the case of Hua Lamphong) Condition Report of Stations Based on our visits to each station and discussions with the station master at each facility, the following are specific items that need attention. Appendix 18 contains photographs of each station showing main facilities; Appendix 19 highlights some safety concerns observed and Appendix 20 describes the station visits and shows track diagrams at each facility. Hua Lamphong Station - Need track rehabilitation within station area during this period. Staff of Civil Department & Traffic Department should meet and discuss about appropriate time to do this job, during p.m a.m. every day. - Staff control the switches within the station area are currently temporarily staff. This is not in accordance with SRT Operation Regulations 2006 and quite hazardous since these are not legally SRT employees. Chiang Mai Station - More lighting (spot light pole) at north & south sides of the station and parking lot in front of station area (dangerous during night time) - Variable Message Sign Board displaying train schedules - Staff control the switches within the station area are currently temporarily staff. This is not in accordance with SRT Operation Regulations 2006 and quite hazardous since these are not legally SRT employees. - Buildings need to be repainted (last painted in 2000) Nakhon Ratchasima Station - Leaking roof over platforms 2, 3 and 4 need repairing. - More lighting (spot light pole) at south side of the station (dark & dangerous during night time) - Variable Message Sign Board displaying train schedules - Staff controlling switches within the station area are currently temporarily staff. This is not in accordance with SRT Operation Regulations 2006 and quite hazardous since these staffs are not legally SRT employees. Surat Thani Station - Leaking roof over office building needs repairing. - Old floor (station area & platform area) need renovation. - Ticket Office, leaking roof need repairing and old air conditioner is out of order. - Variable Message Sign Board displaying train schedules - Toilet for station officers needs renovation. - New electric cable within office building needs replacement. - Parking lot needs markings & signings to separate parking area between passengers cars and station officers cars. 47

64 It is disturbing to see that those individuals controlling the switches within the station area of these stations are temporary staff. This is a serious situation, and it is understood that this is the policy at all SRT stations, on account of the 5% limitation on new hires. The recent derailment and Lamphun station on 2 nd December apparently was caused by the operator changing the points on a switch while a train was moving over the switch. This emphasizes the need for a more effective training program, even for temporary employees Staffing During the station visits, the consultant developed a check list common to all stations for comparison purposes. The following is the station staffing for each station visited. Table 19: Station Staffing Station Hua Lamphong Chiang Mai Nakhon Ratchasima Surat Thani Remarks Station Operation Staff Station Master Deputy Station Master Signaling Officer 2 3 Ticketing Officer Railway Police Security Staff Outsourced Public Relations Officer Luggage Room Officer Station Maintenance Staff Total excluding security staff Total Source: Consultant s station visits Comments on Staffing Ticketing Staff Based on the total staffing figures for all shifts, the consultant considered the staffing levels to be appropriate, with the exception of Surat Thani station, where more ticketing staff should be considered. Considering the need to keep ticket windows open 24 hours/day, a minimum of 4 persons are required to keep one ticket window open. As the number of passengers per day at Surat Thani are similar to those at Chian Mai (392,161 and 375,025, respectively) 19, the number of ticketing staff at Surat Thani should be roughly similar to those at Chiang Mai. Therefore we consider that at least 8 ticketing staff need to be employed at Surat Thani, instead of the existing 4 people. Maintenance Staff The maintenance staff levels for Hua Lamphong and Surat Thani appeared to be overstaffed, but after further investigation the consultant found that the staff is not only assigned for station maintenance but are responsible for rolling stock and vehicle maintenance as well as maintenance of the station. Railway Police and Security Staff It should be noted that railway police are SRT employees while security staff are all outsourced from companies outside of SRT. Security staff work under the direction of the station master and are generally responsible for security issues within the station area, though they cannot perform any law enforcement functions; i.e.; they cannot make arrests. When necessary, they also provide passenger guidance and 19 See Table 21 48

65 information regarding the station to passengers. Railway police belong to the government department and are empowered to enforce the law at station facilities and can make lawful arrests Financial Data Information has been obtained from each of the four stations regarding passenger ticket revenue by category of ticket and operating costs. The following table summarizes this financial information for 2012; prior years data is shown in Appendix 21. Revenues from each station for the year 2012 are shown in Table 21. Table 20: 2012 Station Financial Information (thousands of baht) Operating Costs Station Electricity Water Telephone Other Labor Total Hua Lamphong 7, , ,800 61,464.0 Chiang Mai 1, ,600 12,261.5 Nakhon Ratchasima 1, ,360 11,349.0 Surat Thani (2011) 1, ,500 9,936.9 Source: SRT/Consultant s visits Note: 2012 cost data for Surat Thani was not available. Table 21: 2012 Revenue from Ticket Sales (baht) Station Passengers Revenue Hua Lamphong 9,133,522 1,365,070,145 Chiang Mai 375, ,296,976 Nakhon Ratchasima 636,010 29,669,505 Surat Thani 392, ,768,080 Source: SRT Findings and Recommendation The Station Log Book The Station Log Book is typically used for train arrival and departure issues as well as issues related to unusual events or incidents occurring at the station. In particular, unusual events and passenger incidents should be recorded. Typically, according to internationally recognized best practice, should mainly be used for analysis of daily events such as incidents, accidents as well as maintenance activities at the station, in order to improve the service. However, the information now noted in the Station Log Book is incomplete and often not completed properly by station staff. In order for the Log Book to be a useful tool to improve conditions for passengers at stations and to accurately document significant daily station activities, there must be increased discipline on the part of station staff in completing the Log Book in a responsible manner Fare Collection and Ticketing Offices The ticketing offices are easy to find in all stations and are generally in good condition. The staff is friendly and service minded. Fare rates are shown on boards and/or verbally available at the ticket office. The daily transport of revenue at 9:00 a.m. to the bank is done by SRT s station master and designated staff. In the opinion of the consultant, this is very risky and not in accordance with international best practice. In best practice, cash collected at the station should be transported to the bank by a professional courier service. An additional advantage of using such a service is that SRT staff is not in the risk of being robbed and the money is insured. 49

66 Rolling Stock Maintenance and Cleaning at the Station Platform At present, maintenance of rolling stock and railway vehicles, such as changing brake pads, oil change and/or refill and vehicle washing and cleaning is carried out at the station platforms. This creates a bad image to passengers and leads to unsafe conditions at the platform. Oil spills, wet floors hinders passengers while boarding. Almost all tracks at the station are very dirty and an environmental impact in terms of oil contamination can be observed regularly. In the case of Hua Lamphong, this is the practice as the train washing plant is out of service and that the stabling tracks are all full due to the parking of rolling stock awaiting repairs Concession Area Zoning After visiting several major SRT stations it has become clear that there is not a clear zoning of shops within the station area. For example, it is most convenient for passengers if all fast food restaurants are in the same area; retail shops in another area, etc. The existing situation is that shops and restaurants are randomly located throughout the station. Also the cleanliness in the retail and restaurant areas needs to be improved. For station space rentals at Hua Lamphong station, the Property Management and Development Department of SRT is in charge of the rental areas and at regional stations, the SRT Traffic Department is responsible. Rental periods are typically for 10 years at Hua Lamphong and 5 years at regional stations. During the interview with station masters, they can only ask for cooperation by the shops and restaurants to keep the area clean, but are not able to enforce it as they are not in charge of the concession. This should be changed as the station master needs to have full authority for the station and its activities; he needs to have the authority to insist that the concessions be operated and maintained to a high standard of cleanliness to protect the public. This provision needs to be included in the rental agreements between the concessionaires and SRT, with effect at Hua Lamphong as well as at regional stations First Aid Room Equipped First aid rooms are available in the four stations visited. The problem is that no station staff is trained and regularly retrained in first aid practice. This is a needed in case of an emergency in order to establish proper response and ensure customer care and comfort. It is recommended that at least one SRT employee on duty be trained in first aid in order to be prepared for any incident in the future Standing Procedures Standing procedures for security, inspection and cleaning are available including necessary time schedules. Baggage handling and security at stations is mainly outsourced Future Station Development and Facilities Improvement The following are recommendations to improve the management and operation of SRT stations based on our discussions with station masters. The Station Managers should be assigned an annual budget for station improvements allocated in accordance to station size. These improvements might include renewal of benches, small appearance changes and installation of facilities that increase the passenger comfort and basic renovations. All station and facilities sub-contracts and concession agreements should include clauses to allow direct control of concessionaires and sub-contractors by the station master. 50

67 Maintenance works carried out at station should be limited to minor repair and basic cleaning. Stabling and maintenance tracks should be cleared of rolling stock awaiting repair. A program to undertake necessary repairs to ensure that coach washing plants should be kept in working order so as to make the washing of trains on the station platform unnecessary. Budget for staff training should be available for such items including: English language training, first aid and passenger service training activities. Each station needs to develop a station manual based on the specific station characteristics and station environment in order to have clear procedures and clear lines of authority. According to international standards evacuation and fire alarm procedures should be available including emergency exit signs and assembly points. The train time table displays at all major stations should be modernized using digital displays which can show the actual time table as well as any delay or cancelled trips. 3.3 Passenger Survey A survey of SRT passengers was conducted at three stations (Hua Lamphong, Nakhon Ratchasima and Surat Thani) in order to obtain suggestions from passengers for improvements at stations. These surveys were carried out by the Consultant during October 2013 and involved a total of 500 passengers. As described earlier in this section, the original stations to be surveyed were Hua Lamphong, Chiang Mai and one more station to be identified by SRT. SRT did identify the third station as Nakhon Ratchasima (Khorat); but due to the temporary closure of the Chiang Mai line in October/November, it was necessary to identify an additional station to substitute for Chiang Mai. It was then decided by SRT, and approved by ADB, that Surat Thani would be the substitute station for Chiang Mai Selection of Sample Size The number of population is an average annual number of passengers through the station ( ). The calculation of minimum sampling size is; = N = Number of Population n = Minimum Sampling Size CV = Coefficient of Variation (50%) = 0.5 Z = Standard Score Z at significant 0.05 = 1.96 e = error of estimation ( 2 2 )+( 1) ( 2 ) The sampling errors normally accepted are between 5% 10%. Due to the limitation of budget, the sampling error at Hua Lamphong is 6% and the sampling error at Nakhon Ratchasima and Surat Thani are 10%. The survey was conducted by a university staff member from at each station. The surveyor interviewed both Thais and expatriates according to the questionnaire. The sample of passenger survey at stations is 500 in total which use random sampling method as follows: 51

68 Table 22: Sampling and Survey Plan Sampling Distribution Railway Station Total Samples (set)* Mon. Tue. Wed. Thu. Fri. Sat. Sun. Hua Lamphong Nakhon Ratchasima Surat Thani Remark: * Sampling Error at Surat Thani Station and Nakhon Ratchasima Station are at 10% and Sampling Error on Hua Lamphong Station is at 6% due to limited budget and time constraint Survey Locations and Timing The following is the program of passenger surveys at each station during October. Hua Lamphong Station with 300 interviews (Sampling errors 6%) from Monday 7th Oct. to Sunday 13th Oct Nakhon Ratchasima Station 100 interviews with (Sampling errors 10%) from Friday 11th Oct. Sat 13th Oct. and Tuesday 15th Oct Surat Thani Station 100 interviews with (Sampling errors 10%) from Friday 11th Oct. and Saturday 13th Oct. Sunday 14th Oct Results The survey questionnaire and survey results are shown in Appendix 22. The total survey indicates to a great extent that the respondents are relatively satisfied with SRT stations as most comments were directed toward train services and generally give most questions a moderate to good marking when asked to scale their preference. It may well be the case that such a result is expected when many of the respondents would not know any better and have no benchmark for comparison. Also there is a tendency to go for the average (moderate response) when completing such questionnaires particularly when they are done quickly by people in a hurry and not really read too deeply. The main negative expressed in the survey involved train punctuality and delays, which is really outside of the control of the station management but clearly has a big impact on the traveler and their experience at a station. Those that took the time to express their views regarding areas of improvement (25% of the sample Q16) suggested punctuality, toilet facilities and cleanliness as the main areas needing improvement. Best international practice would suggest that many improvements could be made at the stations covered particularly in the areas of concourse signage and communications, ticketing, toilets, seats and other facilities for waiting passengers and visitors, interchanges, etc. We have identified many of these improvements in the station condition survey, shown previously. 3.4 Station Management and Operations Manual Review of Existing Manuals The Regulations & Operation Manual was issued in 2006 and was developed by a joint committee of SRT senior experts and forwarded for approval to SRT s Governor. The manual is basically the operation rule book of all SRT services and is divided into the following sections: 52

69 Section 1: Definition of specific terms (Glossary), 11 pages Section 2: Signaling, Signing, signals and signs attached to the train, 79 pages Section 3: Train traffic control in/out of stations, 27 pages Section 4: General train operation (Telecommunication, interlocking, track switching), 82 pages Section 5: Track maintenance & maintenance trolley (civil engineering discipline), 21 pages Section 6: Degraded or emergency regulations (e.g. accidents, derailment), 15 pages Section 7: Train operation control via telecommunication equipment (punctuality control), 18 pages Section 8: Central Telecommunication Control (mainly for double track area), 23 pages Performance Standard for all level of SRT Staffs, 44 pages Moving of Stopped Train Technique, 54 pages This manual does not cover specifically the items usually found in a station operations and maintenance manual. Such a manual, to be consistent with international best practice, should focus on station standards that will ensure a high quality of customer service, station integration with other modes of transport, safety and comfort including architectural attractiveness. There has been a program smart station begun in 2008 to improve station standards throughout the SRT system. As of 2012 a total of 209 stations meeting the standards incorporated in this program 20. However, stronger and more enduring measures are needed to ensure high quality stations meeting international standards of passenger convenience and safety. The development of a comprehensive SRT Station Management and Operations Manual consistent with international standards is urgently needed. A draft of this manual has been prepared and it focuses on: ensuring a high quality of customer service, station integration with other modes of transport, safety and comfort including architectural attractiveness. This draft manual in shown in Appendix Revised Manual and Manuals Based on Standards Service and Safety Standards SRT does not have any quality assurance department, though a committee has recently been established to develop a Quality Management System at the request of the SRT Governor. It is impossible for SRT to measure the current service. An example of industry benchmarks of passenger railway performance and safety can be found in documents EN13816 and EN50126 which represent European standards for railway passenger services approved by CEN (European Committee for Standardization) member countries 21 in 2001 and safety management benchmarks also adopted by most European countries and are periodically updated. These safety and service quality standards have been adopted by European railways as well as in Asia (China, Malaysia and India) and it is recommended that the provisions included in these documents be adopted by SRT in the future. EN Railway applications, approved in February 2007, identifies the specification and demonstration of reliability, availability, maintainability and safety (RAMS). These documents 20 See Appendix 23 for a description of the smart station program and identification of stations included 21 CEN member countries include: Austria, Belgium, Czech Republic, Denmark, Finland, Germany, Greece, Iceland, Ireland, Italy, Luxembourg, Malta, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and United Kingdom

70 were approved by CEN 23 in 2001 and member counties are bound to implement their provisions. Essentially these documents provide detailed service criteria against which performance is judged by customers or regulators. It is recommended that SRT pursue the establishment of the Quality Management System and adopt the appropriate international standards as part of the daily work routine as well as include these provisions in the curriculum during staff training Implementation of Station Service and Safety Standards It is a must and a very urgently required issue to implement a Quality Assurance department (QA) as well as a Railway and Work Safety Department. Such departments are independently within the organization and reporting directly to the head of the organization Guideline for Manuals The Quality Assurance Department, once established should be responsible, to identify and integrate all necessary standards (e.g. ISO, NFPA, BS, EN). In addition to this, the QA department may also issue and check documents and procedures and integrate them into the training of new staff and recruits Need for Revised Manuals As described in section the existing Regulations and Operations Manual issued by SRT in 2006 does not cover specific management and operations issues at stations. We have prepared a draft of a Station Management and Operations Manual to be used by station masters focusing on customer service quality, integration with other modes, safety and security comfort. This draft document is shown in Appendix Content of Draft Station Manual The draft SRT Passenger Railway Station Management and Operations Manual covers the following topics: Quality of Services Performance Standards Station Integration Safety Comfort and Attractiveness Station Administration SRT s Training Center The Regulations and Operations Manual is valid for all SRT line and station operation. It is the basis for the training of new SRT employees at the SRT training center in Bangkok. The training is carried out for 3 different levels of SRT employees and related to their career plan within SRT. Level a) staff with bachelor degree and higher for managerial positions. Training duration days. 23 CEN countries (European Committee for Standardization) include: Austria, Belgium, Czech Republic, Denmark, Finland, France, Germany, Greece, Iceland, Ireland, Italy, Luxembourg, Malta, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and the United Kingdom 54

71 Level b) staff with bachelor degree for operational positions. Training duration: 1 st training session of15 days; 2 nd session of 90 days (after 3 5 years); and 3 rd session of 30 days when appointed to be station master. Level c) vocational- higher vocational education staff who will study in railway engineering school. Training duration 1 year in engineering school besides other training courses. The Consultant visited the SRT training center in Rangsit on the 19 th November. Equipment and technical training came from Japan from a JICA grant that was completed in An aftercare program was subsequently completed in After that time, however, there was insufficient funding from SRT to keep the facility functional, compounded by the fact that most equipment and software came from Japan, making it difficult to keep it operational. JICA, in their post evaluation of the project, highlighted several of the difficulties encountered in making the project beneficial to SRT. Appendix 25 shows the text of this post evaluation 24. There are no computers available for trainer and trainees to do interactive training, self-study or internet research in regards to new technology or standards. It is clear that there is a need to renew and refurbish the training center. SRT needs to ensure that all costs for renewal and refurbishment are included in the E&M installation contract of a future contract in order to carry out the training for operation and maintenance staff. Additional training (e.g. English language, safety, quality, performance, security and environment protection) should be made available as well. SRT may also consider online Training as used by the world s leading railway companies. The important point to emphasize is that the lack of safety discipline is quite prominent at SRT and has caused many accidents, in particular the one involving the first train to Chiang Mai on the 2 nd of December after reopening the line following rehabilitation. We have observed many other examples of failing to follow safe practices as shown previously in Appendix 19, these all serve to underline the lack of a safety culture at SRT and the desperate need to improve staff training and safety discipline. The reopening of the training center with sufficient funding and proper training staff and techniques is an important step in the right direction. If the government is willing to spend 783 billion baht to develop a high speed railway, surely sufficient funding can be allocated to developing a sound training system at SRT. 3.5 Poor Station Design and Signage: Case Study of Makkasan Station While not a station identified for our experts to examine, we have used the Blue Line of MRT to transfer to the Airport Express at Makkasan on several occasions and have discovered that this is indeed a difficult and confusing procedure for intending travelers. There is a recently-constructed (August 2013) pedestrian sky bridge linking the MRT Phetchaburi station and Makkasan, however, there is no signage within Phetchuburi station indicating the existence of neither the Makkasan station nor the Airport Link rail line and passengers must walk long distances within Makkasan station with poor signage. Arriving on the MRT at Phetchaburi station the passenger must know to move in the direction of the Don Bosco School exit; only upon reaching this exit, there is a small sign indicating the direction of the Airport Link rail line at Makkasan station. Upon reaching the Makkasan station, there are signs to the city line and airport express. About halfway along the length of the station, is the entrance to the city line and signs for the airport express beyond this location. However, upon reaching the far end of the station, the airport express signs disappear. Only after asking some of the cleaning staff, passengers are told

72 to follow the directions to the China High Speed Rail Exhibit ; beyond this exhibit is the airport express entrance. Moving in the reverse direction, upon arriving on the airport express train, there are no signs to the MRT Phetchaburi station. Passengers must ask station staff to discover that they must first go from the third floor to the first floor, walk again the length of the station, and up again to the third floor to find the (unmarked) entrance to the sky bridge. Clearly, there needs to be more visible signage at both the Makkasan and Phetchaburi stations to make it convenient for passengers to make this connection. This is just an example to show that for the future Bang Sue station, there will need to be a well-thought out plan of directional signs so that passengers can easily find their way between the several transport modes that will use that facility. 3.6 Study Tour Introduction Under this project, there is to be a study tour/workshop with the objective: Organize a study tour/workshop to showcase international/ regional best practice for passenger railway service station operations. We have identified Kuala Lumpur as the location for our study tour due to the high standard of transport services at KL Sentral, the existence of several transport options (LRT, conventional rail, airport link and monorail) good connectivity to and from the airport as well as throughout the city. As the future Bang Sue station will also be a major transport hub in Bangkok, the selection of KL Sentral station was a logical choice Study Tour Program Meetings were arranged with Express Rail Link and ERL Maintenance Support Sdn. Bhd., SEMASA and KTMB for discussions and tour of facilities on the 11 th and 12 th of November 2013 in Kuala Lumpur. The agenda for the meetings and inspection of facilities as well as a list of participants are shown in Appendix November Express Rail Link Results of Study Tour and Lessons Learned The group was met with Mr. Amin of Express Rail Link at the KLIA airport station. We were shown the facilities at the airport station including baggage handling facilities and procedures for ticket sales and station operations. Similar to the airport line in Bangkok, there are Airport Express trains and Transit Trains (similar to the City Line in Bangkok, making intermediate stops). Prior to 2013, these services used different parts of the airport station, similar the practice in Bangkok, due to the handling procedures for checked baggage. However, in order to improve passenger convenience and to improve operational efficiency, both these train types now operate from the same location on the platform at the airport station. It was noted that on average, about 1,000 pieces of luggage are handled daily by the Express Rail Link, so far without any incidence of loss. The staff handling the baggage is contracted out to a third party and has been operating successfully. After travelling by express train to KL Sentral station the group was hosted by the CEO of Express Rail Link Sdn. Bhd. (ERL) Noormah Mohd Noor and CEO of E-MAS Thomas Baake. E-MAS provides maintenance support for the Express Rail Link services. In addition, Mr. Ramesh Balakrishnan, Vice President of Asset Services Management and Mr. Amin joined the meeting and discussions. 56

73 Express Rail Link operates with no subsidy from the government, though the construction was supported by a loan at concessionary interest rates, which was repaid. All capital and operating expenses are funded internally. Income from rentals at KL Sentral as well as from fiber optic cables along the right of way, amount to about 11% of total revenue of the company. Daily ridership of express trains is about 6,000 passengers and from transit trains, 12,000. It is estimated that between 15% and 17% of KLIA passengers use the services of ERL. Ridership grew by 14% from 2012 to 2013 in total; Transit passengers grew at a rate of 12% and express passengers by 18% during this same period. It should be remembered that the Express Rail Link has been operating since The concession company Express Rail Link has three partners: YTL, Tabung Haji and TRISILC with 50%; 40% and 10% shares, respectively. E-MAS was a joint venture with Siemens (51% share) and is responsible for maintenance and operation. E-MAS recently took over the maintenance and operations function and trained staff within a 12 month period. It is interesting to note that drivers were trained within a 4 month period and 80% of the new staff had no prior railway experience. Customer complaints are received and acknowledged within 24 hours of receipt and a reply is sent within 3 working days. 12 November SEMASA We met with SEMASA Sentral staff for a discussion on the management of KL Sentral Station. Discussions were led by the Manager of Operations Salina Sapuan, Ibrahim Tambi Cik Bin Mohamad Senior Executive, Operations, and Suhana Ibrahim, Executive, Operations. SEMASA is responsible for managing the station property at KL Sentral, while the holding company, MRCB, is responsible for the property development for the 72 acres surrounding the station. In 1997 a concession agreement was signed for KL Sentral Sdn Bhd (joint venture between Malaysian and foreign contractors) to construct KL Sentral station, then to return it to the government upon completion in exchange for development rights to the 72 acres of land surrounding the station. Instead, after construction was completed the property was returned to MRCB to manage. Construction was complete in 2000 and the facility was opened in ,000 commuters daily use KL Sentral, amounting to about 58 million passengers per year. Rail operators using the station include the national railway company KTMB, Rapid KL operating one LRT line and the Express Rail Link serving the airport. Bus services are also supported but were not included in the original design of the facility. In terms of percentage of the total area of the station, the Airport Rail Link occupies the largest position with just over 35% of the area, followed by KTMB with 23% Rapid KL with over 3%; common areas amount to over 28% and SEMASA Sentral commercial area comprises the remaining 9% of the station. This 9% of the station area provides a source of income to SEMASA. The government made a conscious decision to not select a rail operator to manage the station. The reasoning was that the core business of a rail operator did not include facility management and that an organization with a proven track record of strong management would be the most logical. 12 November KTMB Discussions were held with KTM Berhad at their offices at KL Sentral Station and a visit to the maintenance facility under the station was arranged. Presentations were made 57

74 highlighting KTM commuter and long distance operations by the following staff: Mohamed Hider Yusoff, General Manager Commuter Services; Siti Badariah Wan Hanafi, Manager Corporate Communications; Zainal Rashid Zakaria, Senior Executive Project and Facilities, KTM Intercity; and Badrul Hisham Bin Mohamad Zakaria Sani, Marketing Executive. KTM Komuter provides rail commuter service for 125,000 passengers daily, with 53 stations along 3 major lines within the Klang Valley. From 2006 to 2012 commuter ridership has been essentially flat due primarily to occasional shortages of serviceable rolling stock. However, during the latter part of 2012 new EMU trains sets were received from China and a 50% ticket price discount policy was introduced resulting in an increase in ridership of about 30%. With regard to KTM intercity services, a total of 20 trains are operated daily as well as 20 ETS (Electrified Train Services) trains between Ipoh and KL Sentral. Government subsidy is received for operating east coast lines intercity services only, though it was said the all services fail to cover costs. Generally, it takes RM1.70 in expenditure to earn RM1 in revenue. It is the intention of KTMB to request subsidy for additional services in order to be compensated for operating losses. All capital investments are made using government funds. Passenger satisfaction surveys are undertaken annually for both KTM Komuter and KTM Intercity. One of the features of KTM passenger services is that there are a minimal number of passenger train classifications for operational and tariff purposes; most services are Intercity trains, with the ETS Ipoh KL Sentral services divided into two categories of trains: gold services with station stops at a minimum and silver services stopping at all stations. Long haul passenger services are not electrified and are equipped with a power generator car to provide electric power for all functions onboard. Most long distance services incorporate 1 st and 2 nd class coaches as well as sleeping cars. At the end of the afternoon a tour of the maintenance depot under KL Sentral station was arranged by KTMB. This facility consists of 15 tracks where repairs are performed by 110 workers primarily on passenger coaches and locomotives. While most of the repair operations are made by KTMB employees, some operations are contracted out to third parties in the case where it would be not economical to undertake this work at the facility. This depot existed prior to the construction of the station and the surrounding developments. Study Tour Summary and Lessons Learned The study tour proved to be an interesting and beneficial experience for all participants. While, in terms of passenger service, KTMB operates a much smaller network and fewer trains than SRT, there are practices and policies that SRT could examine and consider to be implemented in their own organization. The example of the successful airport line operation in Kuala Lumpur in terms of market share of total airport passengers and the relatively high number of passengers using the airport express services compared with transit services is in stark contrast to the operational and managerial difficulties now being faced by the ARL in Bangkok. While the station management of the future Bang Sue station has not yet been determined, the success of the non-rail private station management company in Kuala Lumpur certainly provides food for thought in Thailand. The following are some of the main lessons learned during the study tour: Private sector participation in railway station management can be a viable solution to managing a large and complex multi modal facility; However, strong support for private sector participation is essential from the government; Operation of express and local trains increases convenience of services and can be accomplished to the benefit of users and service providers; this is currently a problem 58

75 on the Bangkok airport line where the City Line and Airport Express lines are physically separated at Makkasan station. If these two train services could be operated from the same location, it would be much more convenient for passengers; KTMB has a minimal number of train classifications (ETS have gold and silver classifications and long distance trains offer 1 st, 2 nd class as well as sleeping cars) thus simplifying the tariff structure and the better understanding of services by the travelling public; we consider that it would be advantageous if SRT were to reduce the number of train classifications in order to simplify the perception of the product from the customers viewpoint. 59

76 APPENDICES

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78 APPENDIX 1 LIST OF PERSONS MET BY THE CONSULTANTS Name Date Designation Agency Voravuth Mala 5 August Marketing Director SRT Chitkamon Pondate 5 August Marketing SRT Chaiyaporn Prasertsri 5 August Chief Passenger Marketing SRT Rungsimun Ekboonmee 5 August Marketing Officer SRT Thanawat Summathana 5 August Marketing Officer SRT Sutep Punthupeng 7 August Operations Director Airport Rail Link Bunyarit 9 August Chief of Train Operations, Bang SRT Sue Control Center Benz Satcharoen 9 August SRT Project and Planning SRT Department Sakchoi Subjaitieng 8 August Department Traffic Planning SRT Chula Sukmanop 13 August Director General OTP Watcharachan 13 August Deputy Chief Mechanical SRT Sinsuwanatash Engineer EK Sittivaekin 14 August Chief Policy Planning Research SRT and Development Bureau Virut Keawtong 14 August Chief Passenger Sales SRT Chula Sukmanop 15 August Director General OTP Danucha Pichayanan 19 August Director of Infrastructure Project NESDB Office Anucha Ninmani 19 August Station Master Hua Lumphong SRT Vatharachan 19 August Deputy Chief Mechanical SRT Sirisuwanatut Engineer Niti Wityatem 21 August State Enterprise Analyst Ministry of Finance, SEPO Pitaya Uthaisang 21 August State Enterprise Expert Analyst Ministry of Finance, SEPO Sutep Punthupeng 19 August Operations Director SRTET Virut Keawtong 2 September Chief Passenger Sales SRT Supat Vorrawattanuthai 5 September Chief District Traffic Division SRT Sujit Chaosirikul 6 September Deputy Chief Engineer; Signals SRT & Telecommunications Thanongsak Pongprasert 13 September Deputy Traffic Manager, SRT Operations Supat Vorrawattanuthai 16 September Chief District Traffic Division SRT Krisada Buathong 21 September Mechanical Engineer SRT Pinai Yhalmag 23 September District Engineer Planning SRT Sutape Chaibod 23 September Assistant Chief Accounting SRT Section Mechanical Division Pisarn Tangtrangonit 23 September Deputy Chief Engineer SRT Ladda Laorkul 26 September Deputy Director Budget and SRT Finance Sakchai Srupjaitiang 2 October Chief Development Division SRT Supat Vorrawattanuthai 3 October Chief, District Traffic Division SRT Tanong Sasom 3 October Thungsong Traffic Inspector SRT Tanongsak Bantadtieng 3 October Chief Clerk Thungsong Traffic SRT Inspector Pinyo Chanmaha 4 October Director, Project and Planning Center SRT Special Project and Construction Dept. Yot Inthasuk 4 October Superintendent Engineer SRT Civil Engineering A-1

79 Name Date Designation Agency Tawan Limprasert 4 October Division Engineer, Research and Analysis Development SRT Civil Engineering Sujit Chaosirikul 4 October Deputy Chief Engineer SRT Signaling and Telecommunications Department Patama Sridaranop 4 October Superintendent Maintenance Engineer Surapol Eiamsaard 4 October Engineer Project Planning Division Sanyawit Aphichatapong 4 October Engineer Project Construction Division Sommart Klinsukol 4 October Engineer Telecommunications Division Chullapong Chulananda 4 October Superintendent Engineer, Mechanical Engineering Center Virut Keawtong 8 October Chief Passenger Sales SRT Krisadapol Manineat 8 October Chief Freight Sales Division SRT Virut Keawtong 9 October Chief Passenger Sales SRT Thagoon Intrachom 9 October Chief Freight Division (line SRT capacity analysis) Somkit Leeloy 11October Station Master, Chiang Mai SRT Somkiet TongJeen 11 October Station Master, Surat Thani SRT Chaiwat Thongkamkoon 14 October Deputy Director General OTP Chula Sukmano 14 October Director General OTP SRT Signaling and Telecommunications Department SRT Signaling and Telecommunications Department SRT Signaling and Telecommunications Department SRT Signaling and Telecommunications Department SRT Mechanical Engineering Mr.Wanlop Ariwong 15 October Deputy Director Stores SRT Procurement Department Mr.Chakrawan 15 October Chief, Contracting Section SRT Procurement Samosorn Peerakan 17 October CEO SRTET Kaewwongwattana Sutep Punthupeng 17 October Operations Director SRTET Kittipong Ruengsan 17 October Acting Finance Manager SRTET Woratep Hwamrasuen 17 October IT Mgr SRTET Yaowalak 17 October Revenue Section SRTET Soonthornnond Pinai Yaimag 24 October Division Engineer SRT Somsak Treanponklang 25 October Station Master Nakhon SRT Ratchasima (Khorat) Virut Keawtong 1 November Chief Passenger Sales SRT Voravuth Mala + 5 November Marketing Department SRT marketing team Sommneung Janbang 7 November Chief Personnel Division, SRT Training Wanchai Kumsri 8 November Chief, Occupational Safety and SRT HR Health Division Natenapit Korsuwan 8 November Chief, Safety Standard Section SRT HR Bundit Waimittra 8 November Chief, Occupational Safety and Health Section SRT HR Pratueng Yodkaew 8 November General Administrative Officer SRT HR Virut Keawtong 11 November Chief Passenger Sales Division SRT Him Sirinypond 13 November Deputy Special Project and Construction Engineer SRT A-2

80 Name Date Designation Agency Suehin Rattamanond 20 November Train Controller, Traffic SRT Department Chariya Tatirat 20 November Marketing Officer SRT Anchana Wongsewang 29 November Senior Expert Public Debt and PDMO Contingent Liability Upama Jaihong 29 November Director of International PDMO Cooperation Division Nantnikorn Tantipong 29 November Senior Economist PDMO Montira Mahinchai 29 November Economist PDMO Thitiporn Yongchaihirun 29 November Economist PDMO A-3

81 APPENDIX 2 DOCUMENTS COLLECTED BY THE CONSULTANTS Electronic copies of the following reports: Thailand: Supporting Railway Sector Reform Final Report, ADB TA 8078 March 2013; Kingdom of Thailand: Improvement of Railway Passenger Service, ADB 46095, October 2012; Data Collection Survey on Basic Information of Railway Sector, JICA, August 2012; Policy Coordination, Planning and Infrastructure Provision: A Case Study of Thailand, November, 2004; Railway Sector Reform Study, Thailand Development Research Institute, MOT, February 2009; SRT Rapid Assessment Report, ADB June, 2008; Thailand Making Transport more Energy Efficient, World Bank, NESDB, March 2009; UK Trade and Investment Rail Sector, Scoping Mission to SE Asia, September 2008; Plan Improvement of the Red Line Mass Transit: Bang Sue Rangsit and Bang Sue Station, OTP January, 2008; The Study on Transport and Traffic Development Master Plan, OTP, February 2011;Review of the Feasibility Study for the Construction of the Den Chai Chiang Rai Chiang Khong Railway, SRT, June 2012; Feasibility Study and Detail Design for Track Doubling Project Chira Junction Khon Kaen, April 2012; Detailed Design of Track Doubling for South Line Project, Nakhon Pathom Hua Hin Section, January 2013; Feasibility Study of Bua Yai )Khon Kaen) Mekdahan Nakhon Phahom New Line Construction, SRT, January 2012; Detail Design of Track Doubling Project Section Prachuapkhirikhun Chumphon, OTP, June 2012; Track Doubling Project Northeast Line Map Krabao Thanon Chira Junction, MOT/SRT January 2013; Track Doubling for North Line Lop Buri Pak Nam Pho, MOT/SRT January 2013 SRT Information Booklet Airport link ridership data PSO Calculation Passenger train analysis October 2011 September 2012 SRT Traffic Department Organization SRT cost allocation spreadsheet Thai Railway Guide 2013 DM Burnstien, Fort Worth Texas Briefing note: Thailand s new PPP framework CLC Asia 17 July 2013 Railways: The World Experience, Thailand Development Research Institute (TDRI) Quarterly Review Vol 8 No1 March 1993 Road Transport in Thailand; UNESCAP 2 Trillion baht schedule of projects (excel file) A-4

82 Hard copies: infrastructure improvement projects Operating statistics 2012 & 2011 Trains per day 2012 Punctuality, speed and incident performance targets Train control center information booklet Train loading data Network map SRT timetable SRT Power Point presentation present and future of SRT High level organization chart Train delay/cancellation data June 2013 SRT Traffic Statistics Passengers, passenger km and revenue 2012 Passenger forecasts Rolling stock list Report of Independent Auditor and Financial Statement 30 September 2009 & 2008 Balance Sheet 30 September 2010 & 2009 Abridged P&L and balance sheet 2012 & 2011 PSO data 2010 to 2014 PSO detailed calculations 2012 PSO detailed calculations 2013 Maintenance/Budget schedule track, signaling and structures PSO payment schedule loans and cash Civil Engineering Department progress of track strengthening project Bridge strengthening project progress of fencing project Signals and Telecommunications Department status of development projects Monthly report passenger performance and statistics (Thai) Statistics Book (2012) Finance Quick Report August 2013 (Thai) PSO schedule PSO Performance Report July 2013 (Thai) ARL performance report September 2013 (Thai) Occupational, Health and Safety Committees (Thai) Set up of Health and Safety Committees (Thai) Ministerial regulations on standards for Administration and Management of Occupational Safety, Health and Environment BE2549 (2006) Train graphs N Line Chiang Mai sections Rolling stock availability information Contract with Hamburg-Consult re ARL Management Accident & compensation procedures Traffic department Specimen accident reports Mae Klong cleaning schedules Compensation calculation information Customer service data complaints, suggestion, etc. (2) Station labor cost schedules Chiang Mae (3) Accident process chart A-5

83 Hard and soft copies: Financial statement (high level) Passenger data SRT passenger and freight forecast 2024 Time table updates excel files A-6

84 APPENDIX 3 SUMMARY OF MEETINGS Date Organization Meeting Highlights 7 August SRT Electrified Train Co Ltd (SRTET) Airport Rail Link Airport Link is somewhat separated from SRT (a subsidiary company) but not financially independent; revenue from fares is transferred daily to SRT, cash back to Airport Link must be supported by receipts of expenditures. AL has no financial independence regarding purchases; funding must be approved by SRT. This is not a good business model as AL has no incentive to increase efficiency and generate funds for own capital expenditures. There are 28.8 route km, 160 km/hr max speed, 8 stations, 31 coaches. Total staff of 543 with 210 operations and 220 for maintenance with the remainder administrative. Staff was trained by Siemens during the warranty period. 30% passengers on the trains are travelling to and from the airport; remainder are commuters on City Line. Expansion plans include a link from Makassan to Don Mueang Airport, links between Don Mueang and Suvarnabumi airports and eventually, including U-Tapao airport. They have capacity problems on the City Line and have an immediate requirement for new trains for the line. System operates from 06:00 to 24:00. Headway is 1 hour for express line and on City line 15 minutes in the peak and 20 mins off peak. Punctuality is very good at 99%. Train availability could be better. 8 August SRT Discussed train performance and accident record during recent years. Obtained statistics for number of accidents by cause. Capital investment plan for improvement of infrastructure and rolling stock obtained for the period Operating performance targets following this investment program were also obtained. 9 August SRT Operations Control Center, Bang Sue Station Visit to the SRT CTC control center at Bang Sue station. Only the tracks in the vicinity of Bangkok are under control of CTC; other sections are controlled by each station, but directed by train dispatchers who communicate with stations by railway phone. It is interesting to note that communications between stations and train drivers is primarily through personal cell phones. 9 August SRT SMART is/was an SRT In-house project to improve the station and stands for: S atisfaction to customers M ind: Service Mind of SRT staff A ctivness of staff R elation to customer T raffic management and safety This includes a program called Happy Toilet. Service Mind program, Call Center voting. However, there is no clear procedure about the information chain in the event of train delay, derailment or other incidents which impact train service. Procedures for normal, degraded or emergency procedure have been requested. There are no procedures for communication for incident management. The line of command is not clear and there is no incident manager. 13 August OTP PSO OTP understands that is does not fully compensate SRT, but as there are no detailed costs by service to estimate the revenue shortfall it is difficult to accurately resolve this. Concept of separation of infrastructure from operations is accepted by the government but not yet implemented. The A-7

85 Date Organization Meeting Highlights government is currently studying the High Speed project (HSR) and other rail infrastructure investments and these may impact on the future shape of SRT and the management of infrastructure. Hence they are awaiting study conclusions before proceeding. Regarding labor unions, they may not really be the road block to efficiency improvements and reorganization if the situation is clearly presented and explained. The team would be provided with the Passenger forecasts included in the HSR study for information. 13 August SRT Primary causes of derailments: broken rails, rotten sleepers and lack of rail fastenings. Also, in sections where contractors are rehabilitating the track, derailments often take place. Availability said to be about 70% for locos. 20 new locos on order from China delivery in about 2 years (20 ton axle load); these will be 3000 hp and to be used primarily for freight trains. 50 additional locos will be tendered (16 tons axle load) for purchase. There are now 204 active main line locos, 144 serviceable. There are 115 new coaches soon to be ordered (10 coaches/train set, 1 st and 2 nd class sleepers) to be operated in complete sets (including head end power cars); but must be maintained as a set, need to be lifted as a train..cannot be accommodated in Makkasan workshop, not sure how to maintain. Red Line: elevated track, parallel to existing line; 5 years Bang Sue to Rangsit will be open; first section Bang Sue Taling Chan open and operated by DMU s (2 trains in morning; 2 in evening). DMU 230 are owned, 200 hp, also 70% availability. Makkasan workshop maintains locos, DRC and coaches. 13 August SRT The Team was provided with a number of reports and data sheets relating to the request for information submitted on Monday 5 th August. In addition, we were informed that details of the PSO calculations as currently carried out would also be provided shortly. The lack of management accounting data was discussed and the impact this has on the PSO calculations, investment planning and general service/product profitability in general. Marketing department staff would be happy to discuss the current limited cost allocation system with the team during the week. Mr Mala outlined the planned SRT expansion projects planned up to 2020 and the potential need for additional staff and resources. SRT were still working on these plans including the impacts of additional spending announced in the government s 2 Trillion baht programme. The team would be provided with details of the initial 2020 plan shortly and comments would be welcome. Task 2 Station Improvements: Mr Mala would provide the team with details of the third station to be covered in the assignment tomorrow. The issue of the planned study tour was raised and it was agreed that the Sentral station in Kuala Lumpur would be a good choice for the visit being one of the biggest stations in the region, which catered for a wide range of services. A-8

86 Date Organization Meeting Highlights 14 August SRT Discussion of expansion plans of SRT including double tracking and new lines. The goal is to move from 8% of double track to 70%. New lines include Den Chai to Chiang Rai and to the Lao border at Chiang Khong (326 km); a second line to the Lao border at Nakhon Phanom (347 km) and a short line (15 km) to an industrial park at BamPachi. Other new projects include extension of the Red Line 10 km north of Rangsit to Thammasat University and an additional 14 km west of Taling Chan. Another new line is an extension of the Airport Link planned for the missing link between Bang Sue and Don Mueang, completing the link between the two major airports in Bangkok. This missing link line will be standard gauge, the same as the Airport Link. 19 August NESDB Discussed the SRT s need for infrastructure renewal as well as the capability of management to undertake efficient operation of the railway as well as difficulties in moving the procurement forward for the needed investments. The 173 billion baht investment plan is approved and only needs to be executed by SRT; thus far, very few of the investment items have been implemented. The separation of infrastructure to government has been approved for several years but government and SRT need to finally undertake the necessary steps to take this difficult step. There is a perception that SRT does not have a workable business plan therefore it is difficult for them to resolve their internal problems or to execute large investment projects, needed for improving their operational capability. SRT have a problem handling procurement and project management. Our study is the latest in a long series of similar studies of improvement of SRT; what is needed is strong initiative on the part of the SRT management and MOT. 21 August MOF, SEPO Discussed the scope of the project and SEPO s general position regarding rail reform and SRT restructuring. They are keen to see rail reform and an improvement in SRTs performance including the establishment of an independent regulator. Progress to date however has been made difficult due to a combination of a strong labour union resistant to change and frequent changes in government. The introduction of a new Management Information System generating timely and realistic management and financial information was a key starting point for improving business development and revising the PSO system. At the moment the PSO application is reviewed by the PSO Committee and independent accounting firms and an attempt is made to include efficiency targets and KPIs to incentivise SRT. However there is little confidence in the data and the targets have little impact on performance. The options regarding implementing change in SRTs organisation and structure were discussed including a 'big bang' effect, the use of change agents including private participation. Involvement of the private sector would involve some legal changes, for example regarding track ownership and rules governing drivers etc. It was suggested that it might be useful for us to meet the Minister of Transport and discuss some of the options for SRT A-9

87 Date Organization Meeting Highlights with him. Mr Wityatem offered to send us some information on the new PPP Law for information. 23 September 23 September SRT SRT Meeting held with Khun Voravuth and other Marketing department staff. Reviewed the proposed agenda for the workshop to be held on 1 October at the ADB Resident Mission. Attendees from SRT will include primarily marketing department staff but also including mechanical and civil works personnel involved in the process for maintenance budgeting. Free trains were discussed and the definition clarified. Free trains are defined every six months; this program began in August 2008 and is expected to be continued. Due to the uncertainty of the Chiang Mai line reopening as planned on the 31 st October, it was decided to substitute Surat Thani for Chiang Mai for the passenger survey; official approval from ADB is being requested. The study tour to KL was discussed and Khun Voravuth offered to help make arrangements as he will travel to Malaysia twice during the next month. November would be the best time to undertake the study tour. Khun Voravuth will begin to nominate SRT staff for the study tour, as well as possibly some stakeholders. The idea to identify a partner railway for SRT was discussed and while the concept is a good one, it may be difficult to implement. An important concept for the future for SRT would be developing a common ticketing system for Bangkok between SRT and other modes (BTS, MRT, etc.). The Red Line was discussed and it was confirmed that the plan is to operate all passenger trains on the elevated Red Line, with only freight trains operating on the existing SRT tracks at grade. Meeting was held with representatives of mechanical and civil engineering departments of SRT to discuss the process of developing the maintenance budget. Civil engineering and mechanical engineering department will set how much needed for maintenance each year based on number of locomotives, rolling stocks, track and structures to be repaired, and then pass the requested budget to finance and accounting department to check and make the decision. A committee from finance and accounting department determines the final budget amount to be allocated based on the SRT current financial status as well as statistics from previous year. Often the latter method is used, permitting only minor increases over the amount allocated during the previous year. However, the total budget amounts typically exceed the revenue (income from ticket sales/freight tariffs as well as PSO subsidy). This shortfall is funded by bank loans, the principal must be repaid by SRT and the interest paid by government grant. We obtained figures from showing the amount of maintenance budget approved and the actual expenditure during each year. Each department promised to provide us with the amount of the initial budget request for each year. This will provide the figures necessary to calculate the amount of deferred maintenance on the railway. In some cases, even the total amount of approved budget cannot be spent due to delays and the cumbersome procurement process at SRT. It is the view of the CDTA team that this process will only perpetuate the chronic lack of maintenance funds and the A-10

88 Date Organization Meeting Highlights condition of SRT infrastructure will continue to decline, unless sufficient funds are allocated for maintenance and the mechanical departments are able to spend the amounts needed to maintain assets in an acceptable condition. The obvious resolution is to complete the acquisition of new locomotives and rolling stock; this should actually decrease the amount of maintenance required. However, until these purchases are made, there needs to be sufficient funds allocated to maintain the existing assets in an acceptable condition. 4 October SRT Civil Engineering 4 October SRT Signals and Telecommunications The investment program of the civil engineering department was discussed covering the detail of the capital program, budget amounts work completed and projected completion date of the entire program. Track rehabilitation programs phases #5 and #6 are about 99% complete and are expected to be fully complete by the end of Essentially these programs cover the main line to the northeast of Bangkok to Nong Khai. The track strengthening projects, which consist primarily of replacement of rail and sleepers, are ongoing. The first group of 8 ongoing projects is expected to be complete by mid-year 2014; the second group of 14 projects are planned for completion by 2016 if approve soon. Double tracking projects have not yet begun construction, though feasibility studies are complete and only EIA work and approval is required. One double tracking project, Kaeng Khoi Chachoengsao has already been tendered and the work is expected to be complete by The other double tracking projects are not likely to be complete before Nearly 97% of the fencing of the right-of-way project has been complete and will finish by the end of Engineers have suggested a 300 m baht strengthening program for the line between Hua Lampong and Don Mueang currently in poor condition but this is currently with the Chief Civil Engineer and not yet approved. The essence of the capital program under the control of this department is 3,565 million baht for signaling improvements at 77 stations, mostly at locations along lightly-used single track lines; 1,623 million baht for level crossing protection improvements and 2,153 million baht for telecommunications. While there were a significant amount of additional improvements included in the 176 B baht program these have been incorporated in the capital costs of the double tracking projects not the departments own program. It was interesting to note that all of the double tracking projects are designed to include Centralized Traffic Control (CTC) while the remaining single track lines will have color light signaling with interlocking systems (automatic block signals). Typically, most railways, when train movements on single track sections are approaching the maximum, CTC is installed to increase line capacity. This is much cheaper than double-tracking and does increase track capacity, and generally it delays the time when double tracking becomes necessary. As part of the telecommunications improvements is the installation of fiber optic cable for railway communications needs. This would present a very good commercial opportunity for SRT to piggy-back on the cables for their own needs capacity that could be sold to other organizations for their communications needs. In particular, this may be a good opportunity for the Government to expand the reach of high A-11

89 Date Organization Meeting Highlights speed broad-band internet services to rural areas of Thailand, not easily reachable by conventional telecommunications. 4 October SRT Mechanical Department 14 October 15 October OTP SRT Procurement The level crossing program is seen as providing the maximum safety impact on SRT operations. Equipment acquisition plans include locomotives, passenger coaches and DMU s. 20 diesel electric locomotives have been ordered from China primarily for container trains moving between ICD s; these are expected to be delivered by August An additional 50 diesel electric locomotives (for passenger and freight service) are being sought, though the initial bidding process did not result in responsive bids and the bidding procedure will be repeated, with revised specifications and requirements. There was a provision for the refurbishing of 56 additional diesel-electric locomotives but this program has been adjusted to include the purchase of 30 new units instead. Specifications are still being discussed. There are 115 passenger coaches, consisting of 1 st and 2 nd class sleepers, restaurant cars and power cars for overnight trains on the northern, northeastern and southern lines. The winning bidder will be announced shortly and delivery is expected by There are also 75 diesel rail cars planned to be ordered and expected to be delivered by These will be air conditioned and non-air conditioned for use on commercial and PSO trains, respectively. The project is currently not approved. Together with ADB Mission staff and the Team Leader from the Accounting and Financial Management System Reform of Thailand s Railway Sector Project briefed OPT on our respective projects, progress and findings to date. SRTs situation was briefly discussed and OTP appeared be happy with the current approach. Procurement Dept. primarily involved in procuring spares and materials for the M&E Dept. (80% of workload of which 80% comes from overseas). Follow Govt. procurement rules. 80 people involved in Dept. includes warehouse at Makkasan. The Procurement Dept. comes under the Deputy Governor Administration. Manual systems but due to be computerized mid next year as part of the M&E Engineers Asset system CMMS? Desperately need some automated system. Negotiates contracts only where there is a single agent/source. Above 2m baht use e auctions (if only 1 bidder have to cancel). No real reporting system have a monthly internal status re orders report. Stock reported on twice a year. Other departments do their own procurement i.e. Construction Dept. doing works projects like the Red Line and double tracking. Track strengthening is done by the Civil Dept. who also procures materials themselves. S&T also do their own thing! Locomotives do come under procurement dept. Problem areas: E auction system difficulties many suppliers join other bids or create dummy bids. When discovered they should be disqualified but considerable pressure put on officers not to do so. Checking legitimacy of e auction bids onerous and traditional system would be better. They do not appear to use a pre-qualification system and set up call off contracts with key rail manufacturers? Tend to have a lot of queries on TOR, A-12

90 Date Organization Meeting Highlights specs, terms etc. 17 October SRTET Computerization will avoid the loss of manual documentation. Note: e auction solely in Thai language Thai regulations place emphasis on products made in Thailand and Thai producers (Part 2 Section 2 Articles 16 and 17 OPM Regulations on Government Procurement B.E. 2535) This essentially eliminates international manufacturers without Thai representation. Also adds middleman and extra costs? Does not make sense where the bulk of railway equipment comes from abroad not Thailand. 1. Accounting System Reviewed accounting system of ARL with staff. ARL Use SAP and essentially run two ledgers, one for SRTET and one for SRT. SRT effectively hold SRTET assets and run ARL on a management agreement. This agreement is understood to cover salary costs as a lump sum and reimburse other costs as incurred and approved. Revenue form tickets and non farebox goes to SRT and most costs other than salary i.e. utilities, cleaning and security are picked up by SRT. Spare parts are procured through the SRT procurement department. ARL enter details into SAP and print outs then sent to SRT. ARL buy emergency parts and consumables but this only account for less than 5% of the total spares requirement. ARL accounts effectively show the management fee from SRT as revenue against the salary and other costs they incur. Assets only include cash and other current assets (debtors money owed by SRT). 2. Maintenance SRT procurement process slow although better this year than last. Management would like to be fully autonomous including doing their own procurement. Express only has 4 trains and one is out of service (been cannibalized for spares etc). Hopefully this will be repaired in the near future. Overhauls are due now but will probably be done March next year. 5 November SRT Marketing Dept. 3. Trains and capacity Requested more trains for the City line currently with government and will take 2 3 years. Met to discuss outstanding issues: meetings, reports & documents required. 1. a) ARL/SRT Accounting consolidation is not produced 2. b) A copy of a recent ARL Performance report would be provided shortly 3. a) Red Line timelines cannot be provided at the present time as the current contract(s) are being amended to provide for 4 tracks not 3. The original timeframe is therefore undergoing considerable change 4. b) SRT manages contracted works through consultants - they do not have their own contract management units managing both the consultants and the contractors. This may change in the future. 5. The most recent PSO Performance report would be provided shortly A-13

91 Date Organization Meeting Highlights 6. The procurement statistics and questions requested will be provided shortly 7. Marketing described the systems used for day and two day tourist packages 8. A meeting would be arranged this week to discuss Environmental, Health & Safety policy & procedures with the HR dept. 9. The lifting of speed restrictions on rehabilitated track depends on hand over timing. 10. A meeting would be arranged on Friday to discuss Hua Lampong- Rangsit track maintenance gap/repairs 11. The Mae Klong line was discussed and it is clearly an area where little planning in terms of strategy and development has taken place. 12. Some of the key reports produced for the Governor each month would be provided for information. 8 November 20 November HR Safety Occupational environmental, health & safety is the responsibility of HR whereas safety matters in respect of passenger is under the Traffic department. SRT Marketing and Traffic Departments Governor has a plan to make Safety a separate department. HR Safety basically follows regulations set out by the Ministry of Labour & relevant laws. There is a policy statement. Even have a SRT Disaster Plan. Set up central Committee and regional Committees. Appoint committee members and appoint safety officer who receive training at the Training Centre. Produce monthly report. Committees make recommendations etc but generally have no budgets for say safety equipment/ measures. Safety Officers do other jobs and their effectiveness depends on the individuals drive etc. Some 24 groups of committees Committees have a safety officer and average of members, so 453 people involved in the 24 group committees. Environmental no audits carried out Accidents-committee examines those affecting staff Plans to outsource accident investigation expertise Discussions of the Consultant s preliminary traffic forecasts with SRT; reviewed time line of major capital projects and improvements within SRT organization and their impacts on passenger traffic forecasts. Also discussed were ideas to improve existing passenger services such as the Mae Klong line, special steam excursion trains and the new overnight services using new sleeping coaches on order. We also discussed the Team s initial passenger forecasts up to 2020 and the methodology used. The marketing department suggested that 2005 would be a good reference year in planning recovery. The likely timing and details of rolling stock procurement and works on strengthening, double tracking and the red line were considered. When discussing the handover of completed works to traffic it became clear that SRT have a problem with the quality of ballast being used in phases 5 & 6. Sub - standard ballast (that crumbles) raises serious concerns about project governance, management and quality control. Also a number of problems in respect of rolling stock procurement were also raised (process on the 50 new locos A-14

92 Date Organization Meeting Highlights stalled and potential financial problems affecting the agent for the 115 coach purchase). 29 November PDMO When discussing the need to amend timetables for realistic running times the traffic representative informed us that the system was totally manual and took too long to amend! When accidents occur, Regional Accident Committees determine what action to take and who should do the investigation. Discussions were held regarding the historical and future debt repayment obligations of SRT. PDMO confirmed that SRT does not have to repay debt obligations for infrastructure but only for locomotives and rolling stock. Of the 2 trillion baht program, only about 10% will be the responsibility of SRT to repay. We received the total amount of debt currently incurred on behalf of SRT as of today. We also discussed the Airport Link and the fact that PDMO had requested SRT to prepare separate financial statements two years ago, but nothing was done. We also discussed the need for technical assistance include training of SRT staff that will should be implemented in parallel with the large infrastructure investments in the future and with the creation of independent business units with financial independence and staff accountable for performance results. PDMO was very supportive of our recommendations as discussed for the future SRT and the importance of the continued technical assistance from IFI s in the form of long term experts guiding SRT through the change from a government entity to a customer and business minded organization. PDMO also commented that the government accepts the separation of infrastructure from operations, with government ownership of infrastructure. A-15

93 APPENDIX 4 SRT MAP A-16

94 APPENDIX 5 TRIP REPORTS: PASSENGER TRAIN JOURNEY TO LOP BURI On Saturday, 21 September, the Team Leader rode train #3 Special Express from Hua Lamphong Station to Lop Buri, returning the same day on Rapid train #112. With the kind permission of the SRT Governor, he was able to ride in the locomotive. Equipment for the Special Express was a three-car diesel rail car set and the Rapid train consisted of six passenger coaches pulled by an Alsthom diesel-electric locomotive. Scheduled running time of the Special Express was 2 hours 10 minutes and for the Rapid train 3 hours 12 minutes for the 133 km journey. Track condition between Hua Lamphong and Don Mueang was not good, with frequent speed restrictions in the vicinity of Red Line construction sites and over bridges; speed varied between 30 and 40 km/hr, though the posted track speed was 70 km/hr. Beyond don Mueang track condition improved dramatically as many of these sections were recently rehabilitated (within the past 6 months) and the diesel rail car maintained the posted track speed of 105 km/hr over most sections. Passenger load factor was estimated at about 50% for train #3 and operation was on time. The return journey on Rapid train #112 was about 10 minutes late at all stations, and load factors were estimated to be about 80% between Ayutthaya and Hua Lamphong; between Lop Buri and Ayutthaya travel was in the locomotive. Speeds for this return journey were lower than for the diesel rail car as the Alsthom locomotives are restricted to a maximum of 90 km/hr, though many speed restrictions on the southbound line kept speeds in many sections at 50 km/hr and lower. Coaches 1 5 on train #112 were wooden benches and were free with no ticket required; coach number 6 consisted of reclining seats and tickets were collected by the conductor. Generally, the operation of both trains was good, with no mechanical malfunctions and station dwell times were short. In particular, it was noticed that the drivers of both trains used the train radios for communicating with the dispatcher. It was told to the study team during previous meetings at SRT that in the majority of cases, communication with drivers was via their personal cell phones. It was also noted that on the return journey to Hua Lamphong, a train load of concrete sleepers was observed moving northbound, likely to the site of the major repair work on the temporarily closed line to Chiang Mai. The major difficulty, and emphasizes the issue raised by SRT in the past is the severe delays incurred at the level crossings in Bangkok, primarily between Sam Sen station and Hua Lamphong. Train #112 stopped 3 times while waiting for these level crossings to clear of vehicles and for the gates to be lowered before the train was able to proceed. It took approximately 5 10 minutes at each crossing to clear road traffic and to lower the gates before the train was able to proceed. As over-all running time according to the time table was not affected, apparently these delays are included in the scheduled running times. These level crossing delays not only are a source of irritation for passengers, and necessarily increase running time; they also delay road traffic and increase the chronic traffic congestion in central Bangkok. With the move of the main rail passenger station to Bang Sue, this will significantly reduce the level crossing issue. A-17

95 BANGKOK TO NONG KHAI Express Train #69 Bangkok Nong Khai On 4 October the 13 coach train #69 departed Bangkok on time and arrive Nong Khai just over 2 hours late. Delays were due primarily to the major track strengthening program that is nearly complete. SRT Marketing Department staff advised that this train typically operates about 1 or 2 hours late due to track condition. However, as the strengthening work is now nearly complete, trains on this route should begin to operate close to schedule once the new track has settled in the ballast. Evidence of the old wooden sleepers and rail were seen at several locations along the line. Maximum speed was about 100 km/hr over most sections. We need to pose this question to the SRT civil engineering people: when will the normal speeds be restored on all rehabilitated track sections on the line to Nong Khai? The first class sleeper was constructed by Hyundai in 1996 was equipped with a chemical toilet. However, the strength of the flushing was so weak that very little waste material was flushed. The concept of chemical toilets is a good one, though a more robust mechanism is needed if it is to be practical. Nearly all of the first class compartments were occupied, though nearly everyone alighted at Udon Thani. Most were Thai nationality with one other foreigner, probably Korean. There was a restaurant car, though first class passengers had the option of ordering dinner, drinks and breakfast from the hostess on board; payment was made the following morning. While the track was generally in good condition, over most of the route, the high vegetation next to the track was encroaching to the right-of-way so much that each passing train scraped the bushes as it passed. This will eventually corrupt the drainage on the track and should be removed. Most of the fixed signals along the track were semaphore type approach signals to stations, controlled by metal wires from each station. There were some color light signals for a short distance just north of Khon Kaen station. Station stops were very short and train handling was generally good. However, at Udon Thani station, after detraining passengers, the train reversed abruptly with a hard jolt, and moved back about 50 meters. After about 5 minutes, the train moved ahead and departed the station. There was no apparent reason for the sudden reverse movement, though there may have been a level crossing that was being blocked by the train. Along the 56 km section between Udon Thani and Nong Khai there were several abandoned stations, and only one crossing loop between these two stations. For those passengers continuing to Laos (about 25 passengers, 90% foreigners) passport exit formalities were performed at Nong Khai station before boarding express train #913, a two coach diesel rail car set. After the 15 minute journey, entry to Laos was accomplished at Thanalang station, where entry immigration formalities were completed. From Thanalang to Vientiane (approximately 7 km) taxis and mini-vans were available at the typical price of 150 baht per person. As there was no exchange office at Thanaleng station, Thai baht was accepted by the taxi drivers. A-18

96 Mae Klong Line General The Mae Klong Line consists of 2 lines separated by a river crossing: 1. Wongwian Yai Maha Chai Bangkok Commuter trains, 34 trains daily (2 ways) 31.2 km. distance (1 hour of travel approximately) Wongwian Yai Maha Chai 10 baht fare During rush hour (a.m. & p.m.) run with 4 DRC per train During off peak (9 a.m. 4 p.m.) run with 3 DRC per train 8 sets of train are circulated daily and another 1 set of train is kept as spare 2. Baan Laem Mae Klong Local trains (Commuter), 8 trains daily (2 ways) 33.5km. Distance (1 hour of travel approximately) Baan Laem Mae Klong 10 baht fare 1 set of train is circulated daily and another 1 set of train is kept as spare A-19

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99 3. Number of Passengers, Passenger-km. and Revenue in 2011 and Remarks Wongwian Yai Maha Chai 1. Number of passenger 3,894,210 3,555, Passenger-km. 69,068,372 66,862, Revenue (baht) 27,064,453 26,804,766 PSO 4. Travel distance /passenger (km) Revenue / passenger (baht) Baan Laem Mae Klong 1. Number of passenger 253, , Passenger-km. 5,227,782 4,884, Revenue (baht) 1,781,750 2,039,664 PSO 4. Travel distance /passenger (km) Revenue / passenger (baht) PSO Public Service Obligation Trains with Passenger Load Factor Less than 40% in 2011 & 2012 % Load Factor Train no. From To Wongwian Yai Maha Chai (Commuter) 4302 Mahachai Wongwian Yai Mahachai Wongwian Yai Mahachai Wongwian Yai Mahachai Wongwian Yai Mahachai Wongwian Yai Wongwian Yai Mahachai Mahachai Wongwian Yai Mahachai Wongwian Yai Mahachai Wongwian Yai Wongwian Yai Mahachai Mahachai Wongwian Yai Mahachai Wongwian Yai Baan Laem Mae Klong (Local Train) 4380 Maeklong Baan Laem Baan Laem Maeklong Baan Laem Maeklong Maeklong Baan Laem Baan Laem Maeklong Baan Laem Maeklong As shown in above table, 12 of the 34 trains on the Wongwian Yai Mahachai Route (2011 & 2012) have Load Factors of less than 40% (10 of 12 trains are from Mahachai to Wongwian Yai and 2 of 12 trains are from Wongwian Yai to Mahachai). In total there are 22 of the 34 trains daily (65%) which have Load Factors of more than 40%. For the Baan Laem Maeklong Route, in 2011 there are 6 of the 8 trains operating daily with a Load Factor of less than 40% (4 trains are from Baan Laem to Maeklong, 2 trains are in the opposite direction). In 2012 there are 5 of the 8 trains operating daily with a Load Factor less than 40% (4 trains are from Baan Laem to Maeklong, 1 train is in opposite direction). In 2011 & 2012 there are only 2 trains and 3 trains respectively per day that operate with Load Factors more than 40%. A-22

100 Variable Costs of Maeklong Line in 2011 & 2012 (baht) Year Fare Revenue Variable Cost Performance ,846,203 55,493,394 26,647, * 28,844,430 62,152,601 33,308,171 Note: * Variable cost in 2012 are estimated figures 5. Since most passengers on the Maeklong Line: Wongwian Yai Mahachai Route (31 km.) and Baan Laem Maeklong Route (34 km.), are students, teachers, workers, officials and merchants (travelling for work, bringing goods, etc.) to Bangkok in the morning and returning in the evening, load factors are much higher for inbound trains than outbound during morning peak and much higher for outbound trains than inbound trains during evening peak. 6. It is not generally government policy to cancel PSO trains even with Load Factor less than 40% because this will have an impact to low income passengers. SRT would save operating costs train but could not make alternative use of rolling stock as the lines are isolated. However, for 34 trains operating daily between Wongwian Yai Mahachai, there may be a possibility to reduce no. of trains operated during off peak hour ( hrs.) to 30 trains by rearranging train schedules with 2 hours/train during off peak period. This would reduce operating cost to some extent. No. of trains for Baan Laem Maeklong route are minimal and could not be reduced without closing the service. 7. Consultants trip report (Sunday 3 rd November 2013) Planned schedule as per the official timetable Outward Wongwian Yai 08:35 Arr Maha Chai 09:28 Ban Laem 10:10 Arr Mae Klong 11:10 Return Mae Klong 15:30 Ban Laem 16:30 Maha Chai 17:35 Wongwian Yai 18:25 Reality however was very different: 1st leg more or less on time Crossed the river and arrived to Ban Laem by10:00 but no train Shown new timetable Had to wait until 12:10 for a train However train does not arrive until 12:18 and only leaves at 12:34 Figure 1: Timetable at Ban Laem Station Also instead of taking one hour did not arrive until 14:10 (1hour 36 minutes) As the only train back was now the 14:30 there was no time to explore Mae Klong Caught 14:30, which left at 14:40 and arrived in Ban Laem at 16:24 (1 hour 44) (DRC did appear to struggle with the journey although the gradients were reasonable) Final Return leg fine and generally on time. A-23

101 General Comments 1. Bangkok Commuter leg to Maha Chai Basically not bad journey Was generally on time and pretty heavily loaded Trains were clean Had rubbish bins Fans tended to work Long Journey & seats were uncomfortable Ride varied from very rough to not too bad (on concrete sleepers) Around an hour for a 30 km journey Lot of housing going up along the line If average speed brought up to say 70 km Would make journey very attractive and encourage traffic Line flat, lots of water around Figure 2: Concrete Sleeper Track WY to MC line Bridges and level crossings a problem (saw two new bridges being built) Figure 3: Bridge Renewal A-24

102 Fare 10 baht not realistic Min fare on BTS/MRT 15/16 Lot of discarded sleepers all along the line Clearly when they changed to complete concrete sleepers Stations not well maintained Lot of SRT staff everywhere Figure 4: Discarded Old Sleepers Figure 5: Poor State of Station Equipment Wat Sai? A-25

103 Figure 6: Discarded Old Sleepers Figure 7: Ban Laem Station Approach Figure 8: Ban Laem Air Conditioned Tourist Train A-26

104 Ban Laem Mae Klong leg Timetable change terrible Tourists had to change their plans Some had travelled on the earlier 07:40 to make sure they caught the 10:10 that disappeared. They were not happy. At least 7 tourists decided at Mae Klong to go to the floating market and get Mini bus back Nothing on website No train communications Train ride terrible horizontal & vertical movement DRC struggled particularly on the way back although gradients not great Lot of water everywhere and level crossings 1hour 30/40 for 33 km trip very slow (22 kmh) Train itself clean and worked and was heavily loaded Lot of SRT staff everywhere Other big problem: Where to go at Maha Chai to cross the river and find Ban Laem Station One map but difficult to see and understand Very little signage One in Ban Laem when you come out of the ferry area points to the station Trains clearly not linked up and not really marketed as a tourist railway Although there was a tourist train at Ban Laem with air conditioning that was not being used. Wasted opportunity Whole trip 40 baht plus 6 for ferry barely the cost of an iced coffee A-27

105 APPENDIX 6 WORKSHOP PROCEEDINGS Interim Report Workshop TA-8183 THA: Improvement of Railway Passenger Services Moving SRT to a Sustainable Passenger Railway 1 October 2013 Asian Development Bank Thailand Resident Mission Office Agenda 09:00 Welcome from ADB Officer in Charge Winfried Wicklein 09: Workshop Introduction T Kennedy, CDTA Team Leader 09:30 10:30 Discussion Topic #1: Existing condition of SRT what steps are needed for improvement? Establish safety task force Infrastructure replacement Renew locomotives and rolling stock Need for improved cost information by service/route Creation of business units with accountability 10:30 10:45 Coffee break 10:45 12:30 Discussion Topic #2: Maintenance Budgets: how are they determined? Why is not all the approved money spent? Budget process from request to approval to expenditure What are the difficulties with this process? Budgets are cut but projects are not how to resolve this issue? How much of SRT can be maintained with the funds that are available? 12:30 13:45 Lunch 13:45 14:30 Discussion Topic #3 Need to revise the PSO obligation system: What is the best format? PSO should be service related Cost basis should be sustainable New study of costs attributable to PSO trains is needed 14:30 15:00 Coffee break 15:00 15:45 Discussion Topic # 4 Impact of Red Line on SRT operations and financial position? Strain on existing SRT management and resources Will cause net increase in PSO funding requirements Interference with existing SRT train services Need to establish separate Red Line organization What should be the shape of this new Red Line organization? 15:45 16:00 Conclusions Format for the workshop will be initial presentations by CDTA consultants, followed by informal discussions with SRT participants on the four Discussion Points. Participants are welcome to join the discussions on any topic of interest. Highlights of the Workshop A draft of the Interim Report was submitted electronically to the ADB and SRT on the 26 th September Based on comments received on the draft, the final version will be prepared by Friday the 4 th October. A-28

106 The workshop was held on the 1 st of October, 2013 at which the Consultants presented the main points of the Interim Report as well as four important discussion topics critical for the next stage of the TA project i.e. the development of a strategy framework. Tasks in Components 1 are essentially complete and for Component 2, the passenger survey questionnaire has been developed together with the budget for the survey which has been approved by ADB. Work will begin during the coming days to undertake the surveys at the three station locations. Work on Component 3 tasks, which lead to the development of a strategy framework for SRT passenger service has now begun. The workshop was attended by 26 participants (ADB 3, SRT 14, SRT FMIS 1 and PADECO/PCBK 8) Discussion Topic #1: Existing Condition of SRT what steps are needed for improvement? The urgent need for track repairs and upgrading was the most cited response from SRT participants during this discussion. It was noted that the emergency repairs that were being undertaken on the temporarily closed section of the Northern line consisted of only replacing rails and sleepers, with no modification to the subgrade or ballast (drainage repairs etc.). In addition, soil testing was also being performed on this closed section to ensure that the line will be safe. Double tracking was also cited as important as it allowed trains to continue to operate on the one track while upgrading was performed on the second track. While the feasibility studies and final design of the double tracking projects have been completed, implementation has been delayed due to structural changes to the project prompted by the Ministry of Transport. In terms of the next steps, once the MOT gave approval to proceed further consultants would need to be selected to prepare tender documents for each double tracking project. The consultants commented that the lack of a strong Project Management Organization within SRT is probably a contributory factor with respect to the long lead times experienced on projects and lack of of execution of maintenance and capital programs. This situation would worsen as more projects are undertaken in line with the current modernization plans. A Project Management organization would be composed of SRT staff as well as specialists from outside the organization, and its primary role would be to ensure timely execution of projects whether it is a track maintenance program or procurement of locomotives and rolling stock. Also, a strong recommendation by the Consultants would be a Safety Audit of all equipment and infrastructure of SRT, coupled with action to rectify areas of acute risk, to assure the travelling public that everything is being done to transform SRT to a safe and reliable mode of transport. Discussion Topic #2: Maintenance Budgets: how are they determined? Why is not all the approved money spent? The large gap between the amount of maintenance budget requested and the amount approved was discussed, and the reason of the narrower gap for the mechanical department compared with civil engineering was stated to be the prioritization by SRT management of locomotive and rolling stock repair over track repair maintenance programs. The interrelationship between the need for maintenance and the capital investment program was discussed as well as the estimated timing of the completion of the components of the previous 176 billion baht capital investment program. In order to obtain this clarity of the likely timing of these investment programs for mechanical, signals and civil engineering departments, follow up meetings were scheduled for Friday the 4 th October. A-29

107 Discussion Topic #3 Need to revise the PSO obligation system: What is the best format? The main point of this discussion topic was that the PSO should be based on specific services and not simply a blanket subsidy for all PSO services of SRT. This view was agreed by all participants. The need for more accurate costs in order to show costs attributable to specific services was agreed by the participants. The representative from the parallel ADB project SRT FMIS project (Financial Management Information System) commented that the fact that PSO trains comprise such a large percentage of SRT train services that there is justification for computing costs attributable to PSO trains on a fully allocated basis on many lines. Khun Voravuth of SRT mentioned that there were some regulations regarding the PSO that the consultants should include in their evaluation of this issue. As this documentation is in Thai, he would send it to the national consultants for translation. Discussion Topic # 4 Impact of Red Line on SRT operations and financial position? The impact of the Red Line was briefly discussed, in particular the future organization structure that will eventually be developed. SRT representatives stated that the current thinking is to add the Red Line to the current responsibilities of the Airport Line organization. The Consultant commented that the eventual structure of the organization responsible for the Red Line will be very important to the eventual success of the operation. The eventual moving of the main Bangkok passenger station to Bang Sue from Hua Lamphong has caused problems with respect to the need for urgent repairs/maintenance that have been turned down by SRT management as the facility is planned to be closed within 5 years. This situation has also caused the deterioration of the entire line from Hua Lamphong to Rangsit, as SRT passenger services are expected to use the Red Line from Bang Sue northwards. This situation points to the need for a short term audit of those facilities that are expected to be redundant upon implementation of the Red Line project. Conclusion The workshop proved to be a success and has set the scene regarding some of the key tasks needing to be addressed during the remainder of the project. SRT was well represented from many departments, and good discussions resulted from the presentation of the issues presented. These discussions have led to follow up meetings and identification of specific avenues of investigation by the Consultants as the project moves into the final phase. SRT Participants: Voravuth Mala Sirima Hiruncharoenvate Chullapong Chulanon Pinyo Chanmaha Surapol Eiamsaard Sakchai Subjaitieng Prasit Jindasri Pattarasuda Namasatr Virat Keowthong Tawan Limprasert Chitkamon Pondate Chaiporn Prasertsri Paisak Laocharoen List of Workshop Participants Marketing Manager Deputy Marketing Manager Superintendent Engineer, Mechanical Engineering Director, Project Planning and Development Engineer, Project and Planning Division Chief, Development and Traffic Planning Division Chief Passenger Division Chief Marketing Division Chief Passenger Sales Division Division Engineer, Research and Analysis Division Chief Marketing Section Chief Passenger Sales and Service Section Traffic Officer A-30

108 Tharasai Choicharoen Parinya Rattanakom Consultants: Thomas Kennedy Donald Selby Walter Gintschel Nippon Yodrak Manus Puntsreerut Suphachai Tangsriwong Noppakorn Klintong Tanakorn Jantarungsri Kunawut Atthasis David Lupton ADB: Winfried Wicklein Oranuch Jetwattana Poramintr Kingphakorn Traffic Officer General Administration Officer, Traffic Team Leader, PADECO Business Planner, PADECO Passenger Railway Operations, PADECO Railway Operations and Management, PADECO Railway Business Planning, PADECO Transport Economist, PADECO Financial Analyst, PADECO Financial Analyst, PADECO Transport Planning/Modeler, PADECO Railway Specialist/Team Leader FMIS Project Principal Country Specialist, Thailand Resident Mission Senior Project Officer, Thailand Resident Mission National Project Assistant, Thailand Resident Mission A-31

109 Final Report Workshop Draft Final Report Workshop TA-8183 THA: Improvement of Railway Passenger Services Moving SRT to a Sustainable Passenger Railway 4 December 2013 Asian Development Bank Thailand Resident Mission Office Agenda 13:30 13:40 Welcome from ADB Senior Project Officer Oranuch Jetwattana 13:40 14:00 Summary of Work Completed T Kennedy, CDTA Team Leader 13:45 14:30 Strategy Framework and Road Map to Viability Historical circle of decline Breaking the circle SRT Capability 2020 Traffic forecast 14:30 15:00 Result of Passenger and Station Surveys Results of passenger surveys and station visits SRT Passenger Station Management and Service Improvement Manual Case study: Airport Link and Red Line management 15:00 15:20 coffee break 15:20 16:00 Action Plan Going Forward Summary of Recommended Actions Role of IFI s Discussion 16:00 16:30 Summary of Workshop Highlights of the Workshop The number of workshop participants from beneficiaries was less than expected as during the day there were demonstrations in the city and some individuals may have had difficulties to travel to the ADB office. The Consultants presented highlights of the Draft Final Report. Emphasis of recommendations included the urgent need to improve safety at SRT which was particularly relevant as only two days before, there was a derailment on the Northern Line with the SRT Governor aboard. The cause was apparently attributed to the inexperience of the leverman in charge of moving the switch points in the station. Our study revealed that these positions are invariably staffed with temporary workers, not SRT permanent staff. This emphasized the need for better safety awareness and training at SRT. The participants concurred. There was considerable discussion regarding the SRT training center and the need to improve its facilities and funding mechanism. Some departments, such as signaling, have their own training facitlity, separate from the main SRT facility. This decentralization of training was raised as one the issues needing rectification. There needs to be a training facility available for all SRT employees, covering all disciplines of railway activities. It was pointed out the the report needed to clearly show the most urgent tasks for SRT for the short and medium term implementation. The Consultants clarified that such a distinction does exist in the full draft report, to be submitted on the 6 th December. SRT agreed with the Consultant s final recommended actions, and agreed that SRT does need some technical A-32

110 assistance some would require external assistance (such as establishing the PMO) but that the safety task force would be constituted from SRT staff. SRT has much to do and will need professional assistance seconded to the company. Clarification of rebranding of SRT services and the nature of the future PSO structure as envisaged by the Consultants; such clarificaitons were presented by the Consultants. It was agreed that comments would be submitted to the Consultants by 15 January and that a Tri Partitie meeting would be held in late January or early February to agree on the final recommendations and discuss SRT s plan for implementation. List of Workshop Participants SRT Participants: Voravuth Mala Prinya Phon Wechakarn Pinyo Chanmaha Paisak Laocharoen Tharasai Choicharoen Sanlayawit Apichatopong Pattarasuda Namasatr Virat Keowthong Thanida Wsohaidit Chitkamon Pondate Dr. Athaphon Kawprasert Visanutep Tipsuche Beneficiaries: Ms Thida Pattatham Phavina Assawamambekul Tamporn Kopresutyina Woitellier Consultants: Thomas Kennedy Donald Selby Walter Gintschel Nippon Yodrak Manus Puntsreerut Suphachai Tangsriwong Noppakorn Klintong ADB: Oranuch Jetwattana Poramintr Kingphakorn Marketing Manager SRT Traffic Dept Director, Project Planning and Development Traffic Officer Traffic Officer Traffic Dept Chief Marketing Division Chief Passenger Sales Division SRT Marketing Chief Marketing Section Divisional Chief Engineer Railway Inspector Director, IPO, NESDB Director, IPO, NESDB IPO Officer, NESDB AFdB representative Team Leader, PADECO Business Planner, PADECO Passenger Railway Operations, PADECO Railway Operations and Management, PADECO Railway Business Planning, PADECO Transport Economist, PADECO Financial Analyst, PADECO Senior Project Officer, Thailand Resident Mission National Project Assistant, Thailand Resident Mission A-33

111 APPENDIX 7 LEGAL OPINIONS 1. What are legal implications of SRT becoming a holding company with several autonomous subsidiaries with financial accountability? For example, Airport Link, Red Line: Intercity passenger services, commuter, etc. What changes would be necessary to the Railway Law? The SRT can become to a holding company with two models. The first model is Private Sector Participation Model. SRT to be a holding company and the second model is the SRT establish a holding company under the SRT. The Consultant is not proposing that either of these two models be implemented at this time. The legal opinion was obtained as information for decision makers going forward. Model I: Private Sector Participation. SRT to be a holding company The SRT was formed by the State Railway of Thailand Act B.E Under the hierarchy of law principle, a latter law will be amend content of the previous law, the hierarchy of latter law must be in the same or higher than previous law. In this case, the previous law is the State Railway of Thailand Act B.E.2494 so; the government is required to introduce a bill to the Parliament to change the SRT to be a holding company. However, another method to incorporate private sector participation in the SRT holding company appears in the Corporatization Act B.E.2542 (1999). According to the Corporatization Act B.E.2542, there were many processes before the cabinet approves a Royal Decree to dissolve the SRT. Moreover, the applying Corporatization Act B.E.2542 to transform the SRT, State owned, to be a holding company may be protested because it creates a sense that the affairs is sold to public. The previous case such as EGAT case or PPT case cause used to confront this resistance. Model II the SRT establish a holding company under the SRT Under the State Railway of Thailand Act B.E.2494 section 9 (10), The SRT has the authority to establish private companies or public companies to run a business or other business pertaining to. Private company is that kind of which is formed with a capital divided into equal shares, and the liability of the shareholders is limited to the amount, if any, unpaid on the shares respectively held by them. 1 Public company is a company established the purpose of offering shares for sale to the public and the shareholders shall have the liability limited up to the amount to be paid on shares. 2 Private company is prohibited to invite to subscribe for shares shall be made to the public while public company can do like that. 3 So the SRT can establish a holding company under private company form or public company form. To establish a holding company under the SRT as private or public companies, the SRT has to follow the guideline of the State Enterprise Policy Commission. 4 The SRT has to submit a proposal to establish a holding company to the cabinet. For submitting a proposal, the SRT is required to prepare following important information. (1) Result of study 1) It s required to establish an associated company. 1 The Civil and Commercial Code section The Public Limited Company Act B.E.2535 section The Civil and Commercial Code section The cabinet had resolution on 4 December B.E.2550 (2007) to approve the Rules for the Establishment and Oversight of the Joint Venture and Wholly Owned Subsidiary of State-Owned Enterprises according to the resolution of the State Enterprise Policy Commission number 1/2550 on 8 November A-34

112 2) The effects of establishing the associated company are industries, economy, society, and environment concerning. (2) Operation plan 1) Procedure and time for the associated company establishment. 2) Details of associated company s operations. 3) Determination of operations to be transferred from the SRT to the associated company. 4) Plans to transfer staff and structure of the associated company to the SRT after establishing the associated company. 5) Executive structure and the committee. 6) Structure of remuneration of commissioner, executive and staff. 7) List of shareholders, registered capital stocks and sources of funding. Time to prepare important information is about three months. After the cabinet approves the establishment of private or public companies, the establishment a holding company as private company has to follow the provisions in the Civil and Commercial Code while as public company has to follow the provisions in the Public Limited Company Act B.E.2535 (1992). Process of Establishment Private Company under the Civil and Commercial Code (1) Promoter at least three persons, by subscribing their names to a memorandum, promote and form a limited company, the memorandum must be deposited and registered at the Registration Office. 5 (2) Promoters must provide the whole number of shares with which the company proposes to be registered must be subscribed or allotted before registration of the company. 6 (3) When all shares to be paid in money have been subscribed, the promoters must without delay hold a general meeting of subscribers which shall be called the statutory meeting. 7 (4) After the statutory meeting is held, the promoters shall hand over the business to the directors. 8 (5) After collection the first share capital, the first directors must apply for the registration of the company within three month after the statutory meeting. 9 (6) After a company is registered, the business is formed as a private limited company. Time to establish private company is about ten days. Process of Establishment Public Company under the Public Limited Company Act B.E.2535 (1) Promoter at least 15 persons, by subscribing their names to a memorandum, promote and form a public company; the memorandum must be deposited and registered at the Registration Office. 10 (2) Promoters must provide the prospectus to the public. 11 The offer of shares for sale to the public or to any person shall be in accordance with the law on securities and stock exchange. 12 (3) When the subscription of shares reaches the number specified in the prospectus, the promoters shall call the statutory meeting of the company The Civil and Commercial Code section 1097 and The Civil and Commercial Code section The Civil and Commercial Code section The Civil and Commercial Code section The Civil and Commercial Code section 1111 and The Public Limited Company Act B.E.2535 section 16 and The Public Limited Company Act B.E.2535 section The Public Limited Company Act B.E.2535 section 24. A-35

113 (4) After the statutory meeting, the promoters shall transfer the business and all the document of the company to the board of directors in order to the board of directors will apply to register the company within three months as from the date of the statutory meeting. 14 (5) After a company is registered, the business is formed as a public limited company. Time to establish public company is about fifteen days. Therefore, the total time to establish private or public companies is about four months. Advantage and Disadvantage between Private and Public Companies Establishment of private company will be ensured that the company will not sell shares to public while establishment of public company may cause to suspect that the public company s shares may be sold to the public in the future. 2. PSO Subsidies...what are the legal implications of implementing a system of service - specific subsidies rather than the existing "blanket subsidies" for all SRT PSO services? Specific services would be by route, or geographic areas. Regulation on PSO subsidy is the Regulation of the Office of the Prime Minister on Providing Subsidized Public Service of State Enterprises B.E The Regulation section 9 states that the State Enterprises who would like to obtain subsidized public service must submit proposals to the Minister for financial subsidies consideration. Then the Minister in charge to the Providing Subsidized Public Service Committee shall consider and approve before the start of the fiscal year at least 10 months. The proposal of the State Enterprises must compose at least the following details. 16 (1) Characteristics of goods or services and the amount requested as a public service. (2) Target groups which are users of goods or services. (3) Objectives and policies to be implemented in the public service. (4) Accounting system, which represents a separate revenue and cost of services for commercial and public service. (5) Estimated cost of providing a public service by identifying the principles and methods of computation cost. (6) Term and conditions for obtaining grants from the government. (7) The expected outcomes including a measure of public service that will be presented to the Providing Subsidized Public Service Committee for funding consideration. (8) Other details concerning determination of proposal Moreover, the Office of the Prime Minister Regulation on Providing Subsidized Public Service of State Enterprises B.E section 7 (1) states that the Providing Subsidized Public Service Committee has powers and duties to determine detailed proposal for granting financial subsidies to State Enterprise. Considering the Office of the Prime Minister Regulation on Providing Subsidized Public Service of State Enterprises B.E section 7 and section 10, the Regulation did 13 The Public Limited Company Act B.E.2535 section The Public Limited Company Act B.E.2535 section 37 and The first Regulation of the Office of the Prime Minister on Providing Subsidized Public Service of State Enterprises promulgated in B.E but it was replace by Regulation of the Office of the Prime Minister on Providing Subsidized Public Service of State Enterprises B.E The Regulation of the Office of the Prime Minister on Providing Subsidized Public Service of State Enterprises B.E section 9 paragraph 2. A-36

114 not specify that the PSO subsidies must to be in blanket subsidies for all SRT PSO service but it depends on proposal of SRT and discretion of the Providing Subsidized Public Service Committee. Therefore, the SRT can determine specific subsidies by route or geographic areas in the proposal to obtain PSO subsidies. 3. Procurement the E-auction system discriminates against foreign suppliers...by the time the domestic E-Auction system is tried, international bidding may be used. How can SRT short cut this procedure and move direction to international competitive bidding? What are the legal implications? The SRT is State Enterprise so the SRT must obey the Regulation of the Office of the Prime Minister on Procurement Electronic Bidding B.E The SRT have to use E- auction only in nation because this Regulation section 10 implies domestic bidding by ruling bidders to show up at biding place. 18 However, if the SRT would like to short cut this procedure and move direction to international competitive bidding, the SRT may apply the Regulation of the Office of the Prime Minister on Procurement Electronic Bidding B.E.2549 section 4 for Procurement Electronic Bidding by the Committee approval. Then, the SRT can be provided goods from international competitive bidding. 19 At the same time, the Office of the Prime Minister on Procurement Electronic Bidding B.E.2549 section 7 paragraph 2 (2) explicitly empowers the Committee on Procurement Electronic Bidding considers to approve exceptions or waivers for no compliance with this Regulation. 4. Fares if SRT simplified its fare structure...fewer train types...simple fare structure..what would be the legal implications? How would this differ for PSO and Commercial trains? If an automatic increase each year based on specified inflation indices...can this be done under existing legislation? The State Railway of Thailand Act B.E.2494 section 9 (3) empowers SRT to set a fare for rail services and facilities of SRT and section 25 (5) (6) states that the Committee of SRT have power to set standard rate of a fare for rail services and facilities of SRT and define a fare for rail services and facilities of SRT occasionally. Therefore, this means the power to set a fare belongs to the Committee of SRT. However, the power of SRT to set a fare must be under the Cabinet policy because the State Railway of Thailand Act B.E.2494 section 41 states that the SRT will not lay down regulation on the use of rail services and facilities, as well as determination a fare for rail services and facilities contrary to the Cabinet policy on economic and fiscal policy. Therefore, the Cabinet has implicit power under section 42 to control a fare rate of SRT. Therefore, if the SRT would like to define fare structure including based on specified inflation indices, the fare structure must be approved by the Committee of SRT and must not be contrary to or inconsistent with the Cabinet policy. This case is comparable to the case of PSO and commercial trains because the power of SRT to define fare structure did not differ from PSO and commercial trains. Fare structure of both cases must be approved by the Committee of SRT and must not be contrary to or inconsistent with the Cabinet policy. Therefore, the fare structure of SRT can be changed without law amendment because it depends on discretion of the Committee of SRT and Cabinet policy. 17 The Regulation of the Office of the Prime Minister on Procurement Electronic Bidding B.E.2549 section The Regulation of the Office of the Prime Minister on Procurement Electronic Bidding B.E.2549 section See the Regulation of the Office of the Prime Minister on Procurement Electronic Bidding B.E.2549 section 4 states: Section 4 Enforcement The procurement of administrative agencies, State enterprises, public organizations and other government agencies under command or supervision of the executive accordance with the law on State administrative or law on establishment of such organization that an activity, project or construction with a value of two million baht or more must obey this regulation unless it has been approved by the Procurement Electronic Bidding Committee to provide with other ways. Procurement of local government is within considering of the Ministry of Interior. A-37

115 5. SRT has literally kilometers of old wagons, coaches, locomotives that no longer function; also, rails rusting away at Bang Sue and Makkasan...is there any regulation and prohibits SRT from selling these old assets for scrap? There is lots of money to be made if they would implement a scrapping policy. The State Railway of Thailand Act B.E.2494 section 9 (1) empowers SRT to sell equipment of train operation except the sale of immoveable property, the SRT need to obtain the approval of the Cabinet before the sale of immovable property under The State Railway of Thailand Act B.E.2494 section 39 (7). The old wagons, coaches, locomotives and rails rusting are equipment of train operation. Moreover, the old wagons, coaches, locomotives and rails rusting are not immovable property. Therefore, the SRT can sell them without the Cabinet approval. In addition, the Regulation of Committee of the State Railway of Thailand No. 158 on Procedures of the State Railway of Thailand section 6.3 states that the properties that were approved by the Committee of the State Railway of Thailand to amortization, the Governor of the SRT can sell them in accordance with existing procedures. So, the Governor of the SRT has discretion to sell the properties which are provided for own use, sale, scraps of the SRT by implementing scrapping policy under the existing law. A-38

116 APPENDIX 8 A. Bus, Air and Train Comparison TRAIN, BUS AND AIR COMPARISONS Lines SOUTHERN EASTERN NORTHEASTERN NORTHERN Origin-Destination Air km. Bus km. Train Air Bus Train T-A T-B A - T B - T Bangkok - Phitsanulok 1:00 4:50 4:50 1, :50 0: :30 6:40 2, :40 1:10-1,871 6 Bangkok - Lampang 1:30 8:00 9:40 2, :10 1:40-1, :30 10:50 4, :20 2:20-3, Bangkok - Chiangmai 1:10 9:30 12: :50 2: :25 10:00 13:35 2, :10 3:35-1,134 5 Bangkok - Buriram 1:05 6:00 5:50 1, :45-0:10-1, :00 7:10 2, :05 1:10-1, Bangkok - Khon Kaen 0:55 6:00 8:00 2, :05 2:00-2, :05 8: :35 2:25-1 Bangkok - Udon Thani 1:00 9:00 9: :50 0: :05 9:00 11:30 3, :25 2:30-2, Bangkok - Ubon Ratchathani 1:05 10:00 8: :10-2: :10 10:50 10:55 2, :45 0:05-2, Bangkok - Chonburi - 1:30 2: (ORD) 1: Bangkok - Pattaya - 2:20 3: (ORD) 1: Bangkok - Aranyaprathet - 4:00 4: (ORD) 0: : (DRC) 5:40-71 Bangkok - Nakhon Si Thammarat 1:10 10:30 15: :15 4: :20 12:00 16:20 2, :00 4:20-1, Bangkok - Trang 1:15 10:00 15: :45 5: :20 10:15 16:00 2,700 1, :40 5:45-1, Bangkok - Hat Yai 1:20 12:30 13: :25 1: :30 13:00 16:50 2,900 1, :20 3:50-2, Sp Ex DRC: 2nd Class A/C Seats only, no sleepers Transit Times (h:m) Fares (Baht) Transit Time Diff. Fares Diff. A-39

117 APPENDIX 9 TRANSPORT SUBSIDIES Direct Subsidy and Indirect Subsidy on Modes of Transportation In most of the world, public transport is subsidized. According to the government role in public services and for the purposes of promoting beneficial economic and social outcomes, government traditionally provides financial support for the development of transportation system including land transportation modes which are road transportation (land arrangement and road construction), rail transportation (land arrangement, track construction, signaling, locomotives, station and depot construction), air transportation mode (land arrangement and airport construction), and sea transportation mode (land arrangement and port construction). Regarding to this, government financial support can be classified into two main types which are direct subsidy and indirect subsidy. Direct subsidies are commonly in the form of cash grant, interest-free loan or interest and principal-free loan arrangement. Indirect subsidies are in form of land arrangement, tax breaks, insurance, rent or loan guarantee. In practice, public transport services are directly subsidized by the government due to financial loss from the operation due to a mandated low fare structure as well as for infrastructure investment requirement especially for rail transportation. As mentioned above, rail transportation was historically subsidized as the primary transportation mode in Thailand. Statistically, Thai government provides direct financial assistance to State Railway of Thailand in the forms of public service obligation or PSO, reimbursement of third class ticket sales, loan interest subsidy, as well as loan principal subsidy. PSO Subsidy Government has provided SRT with the following PSO payments in order to compensate the shortfall of revenue in relation with costs of operation for PSO train each year for the amount of 2,114 million baht in 2010, 2,285 million baht in 2011, and 2,350 million baht in PSO payment in 2010 was in the form of interest and principal-free loan arrangement. Since 2011, the PSO payment has been made in form of cash grant. The PSO payments are demonstrated in Figure 1 as follows; Figure 1: Public Service Obligation Support from 2008 to 2012 (Million baht) Source: State Railway of Thailand financial statements from 2008 to 2012 (unaudited) Cash Grant for Capital Expenditure Government provides financial support in form of cash grant for infrastructure investment expenditure regarding track rehabilitation, procurement of locomotives and rolling stock, renewal & maintenance program, overheads, and signaling and civil structures. A-40

118 Loan Interest Subsidy Regarding to this, government provides financial assistance in form of interest subsidy for Suvanhabhumi Airport City Line project which was funded by loan. In this case, government particularly supports for interest expense for construction loan while SRT will be responsible for principal repayment. The interest subsidies of SRT provided by government which increase across the time from year 2008 to 2012 that are demonstrated in Figure 2 below; Figure 2: Interest Subsidy Support from 2008 to 2012 (Million baht) Source: State Railway of Thailand financial statements from 2008 to 2012 (unaudited) Loan Interest and Principal Subsidy Regarding to this, government provides financial assistance in form of loan interest and principal subsidy for the PSO payment of year The amount of loan is 1, million baht. Main Competition of SRT Passenger Services According to the modes of public transportation services, road transport, primarily bus services are considered as the main competition of SRT passenger services. Referring to this, Bangkok Mass Transportation Authority ( BMTA ) is main competitors for SRT which provide free bus services offered in Bangkok on 800 buses operating 73 routes. Regarding to this free service offered, air conditioned services are not provided for all buses. In this case, BMTA has received a subsidy of 10,475 million baht over the past five years. Although BMTA has been subsidized by the government from the first year of operation, its financial position is still not improving and BMTA retains loss until now resulting in deteriorating quality of service. It can be seen that BMTA faces with the same situation as SRT regarding the public transport service offered. There are various factors regarding to this matter such as insufficient and inconsistency of PSO from government, accumulated debt from accrued interest expense with high cost of operation, lack of corporate governance in operating service. A-41

119 APPENDIX 10 PASSENGER FORECAST MODELS 1. Bangkok Transport Planning Model In 1997 OCMRT (Office of the Commission for the Management of Road Traffic) implemented the project, Urban Transport Database and Model Development Project (UTDM). This project developed the two major transportation planning models for Bangkok and its vicinity province (5 provinces), called Bangkok Metropolitan and Regional Extend City Model (BMR-ECM) and transport planning model for country level called National Model (NAM). The BMR-ECM study area covers Bangkok and its surrounding 5 provinces, Nonthaburi, Pathum Thani, Samut Prakarn, and Samut Sakorn. The BMR-ECM is composed of 625 traffic zones. It has a highway network and public transportation network. At present, the BMR-ECM model was continuous developed and update by Transport Data and Model Integrated with Multimodel Transport and Logistics (TDL) which is done by the Office of Transport and Traffic Policy and Planning (OTP). By this project the BMR-ECM changed its name to ebum (Extended Bangkok Urban Model). Its study area was unchanged, covering Bangkok and 5 provinces. But its traffic zone was divided more accurate in Bangkok central area with total traffic zone now numbering 1657 zones (shown in Figure 1-1). The structure of this model is composed of four step model. It includes both passenger and commodity trip travel in its model. Its model structure is shown in Figures 1-3. The rail passenger demand forecast was generated from Trip Generation, Trip Distribution and Modal Split sub model and Traffic Assignment Model. Details of each sub model are described in the following:- Trip Generation Model is the sub model which calculates all passenger trip end in-out of traffic zone by using socio-economic data input. Trip Distribution Model is the sub model which calculate inter-zonal trip between each traffic zone by using travel cost function (from transportation network). Modal Split Model is the sub model which calculate passenger trip each transportation model by using the Logit algorithm. Outputs of this model are private passenger and passenger of public transport. Traffic Assignment Model is the sub model which calculates traffic volume and passenger for each public transport service route (including SRT commuter and intercity route). Theoretically, for Bangkok and surrounding provinces, ebum can be used to forecast SRT passenger ridership from present to year A-42

120 Figure 1-1: 1657 Traffic Zones of ebum Figure 1-2: Transportation Network of ebum A-43

121 Figure 1-3: ebum Model Structure Table 1-1 Example for Forecasted SRT Red Line Passenger ebum Output A-44

122 2. National Model (NAM) In a similar manner as ebum, the NAM was firstly developed in 1997 by OCMRT and was updated by OTP. At present the NAM s traffic zone is 937 zones. Its internal traffic zones (926 zones) represent political district in 76 provinces in whole kingdom of Thailand. Figure 2-1 shows NAM s traffic zones. The NAM model structure is composed of highway, rail, air, river and coastal transportation network. This model can forecast both passenger and freight volume from present year to The basic network of NAM is highway network while rail, air, river and coastal network are additional networks. Figures 2-2 to 2-5 are motorway network, highway network, rail network and air network, respectively. The procedure to calculate travel demand for each mode is a four step model. They are trip generation, trip distribution, modal split and traffic assignment model. Figure 2-6 shows NAM model s structure. For the passenger model inside NAM, highway, rail and air network are used for calculation. Transportation modes for the passenger model are private car, bus, train and airplane. Modal split sub model is used for calculation base on Multinomial Logit algorithm. Public transport choices in the model are bus train and air. Fare structure and public intercity transport route service were input in the model. Rail passenger forecasting output is shown in Table 2-1. However, it never sub category itself into ordinary train, rapid train, nor express train. The new high-speed train (HSR) is under developed in the current NAM mode in TDL II project. The HSR passenger forecasting was done by a consulting firm that purchased the NAM and modified it for HSR s passenger forecasting process. A-45

123 Figure 2-1: NAM s Traffic Zones A-46

124 Figure 2-2: Future Motorway Network in NAM A-47

125 Figure 2-3: Highway Network in NAM A-48

126 Figure 2-4: Railway Network in NAM A-49

127 Figure 2-5: Air Network in NAM A-50

128 Figure 2-6: NAM Model Structure Table 2-1: Forecasting Passenger Output (000 pax/day) A-51

129 APPENDIX 11 SRT FINANCIAL EVALUATION State Railway of Thailand (SRT) Financial Performance Analysis State Railway of Thailand Asset Structure SRT assets amount to approximately 134,300 million baht in which the majority are fixed assets of railway track and locomotives totaling 88,241 million baht (66 percent of total SRT assets). The next largest item of assets is the Suvarnabhumi Airport City Line amounting to 5,702 million baht or 26 percent of total SRT assets. A lack of renewals of railway track and locomotives and adequate maintenance over many years have led to a stock of assets in poor condition with much of it life expired. Figure 1: SRT Assets from 2008 to 2011 (million baht) Assets structure 150, , , , , , , , Cash and cash equivalents Inventory Other current assets Property, plant & Equipment - net Suvarnabhumi Airport City Line Total assets Source: State Railway of Thailand unaudited financial statements from 2007 to 2011 State Railway of Thailand Capital Structure SRT assets have mainly been financed by loans totaling 88,196 million baht in 2011 or 66 percent of total SRT source of funds. Debt financing of SRT, consists mainly of long-term loans which are comprised of international loans, domestic loans, and State Railway of Thailand bonds totaling 75,370 million baht or 56 percent of total SRT source of fund. The SRT long term loans have increased by 6,239 million baht in 2010 as a result of rolling over existing debt due for payment and to improve SRT liquidity. 16 percent of total SRT liabilities is accounted for by pension fund and pension obligations to retired employee totaling 13,952 million baht in SRT shareholder s equity accounts for 34 percent of total SRT liabilities and is made up of common equity totaling 107,409 million baht and retained losses of 61,932 million baht. SRT shareholders equity has increased approximately 33,000 million baht during previous five years as a result of the investment in the Suvarnabhumi Airport City Line. A-52

130 Figure 2: SRT capital structure from 2007 to 2011 (million baht) Capital structure 150, ,000 12,891 30,972 36,985 39,071 45,477 50,000 81,516 71,731 80,647 85,778 88, Total liabilities Total shareholders' equity Source: State Railway of Thailand unaudited financial statements from 2007 to 2011 Table 1: State Railway of Thailand Profit and Loss Statements (million baht) Income statement Revenue Transportation revenue 6,369 6,569 6,379 6,150 6,296 6,175 Income from property management 1,042 1,115 1,359 1,464 1,684 1,703 PSO ,114 2,285 2,350 Other revenue ,185 1, Total revenue 8,211 8,523 8,490 10,913 11,442 11,171 Operating expenses Infrastructure and buildings (1,332) (1,569) (1,591) (2,048) (2,510) (2,517) Maintenance of locomotives and rolling stock (2,267) (2,260) (2,514) (2,636) (2,972) (3,014) Transportation (6,399) (7,227) (6,245) (6,592) (6,739) (6,845) Management (562) (584) (615) (686) (761) (1,005) Other (10) (8) 8 (13) (17) 1 Total operating expenses (10,570) (11,648) (10,957) (11,975) (12,999) (13,380) Loss from operations (2,359) (3,125) (2,467) (1,062) (1,557) (2,209) Other income 1,916 1,084 2,018 2,403 1,971 2,558 Other expenses Pensions expenses (3,264) (3,220) (3,683) (3,394) (3,320) (4,855) Depreciation (1,701) (1,639) (1,980) (2,017) (1,992) (1,977) Interest (2,168) (2,135) (2,156) (2,202) (2,346) (2,705) Other (288) (1,165) (1,809) (1,587) (1,851) (1,969) Total other expenses (7,421) (8,159) (9,628) (9,200) (9,509) (11,507) Total net loss (7,864) (10,200) (10,077) (7,859) (9,095) (11,158) Source: State Railway of Thailand unaudited financial statement from 2007 to 2012 State Railway of Thailand Revenue Structure Primary revenue of the State Railway of Thailand ( SRT ) is traffic revenue from passenger and freight services. During the past five years from 2008 to 2012, the proportion between passenger revenues and freight revenues of SRT has been relatively stable at around 65 percent and 35 percent of total traffic revenue respectively. Apart from this, SRT receive support from the government for passenger services carried out in the public interest that otherwise may be discontinued on purely commercial grounds. This Public Service Obligation ( PSO ) began in 2010 and has significantly reduced SRTs operating loss from its railway services. However, SRT does not receive the full amount of financial support requested largely due to doubts regarding the accuracy of SRTs accounting information and cost allocation system. In 2012, SRT received government support for PSO totaling 2,350 million baht. A-53

131 SRT receives revenue from its stock of land and buildings; this has grown over the period by some 63 percent. Clearly property management at SRT has improved and this is potentially an area where more non farebox revenue can be generated. Figure 3: SRT Revenue Structure from 2008 to 2012 (million baht) 15, , , , Revenue structure 10, , , , Traffic revenues Concession fares from the government Public Services Obligations Property revenues Other revenues Total revenue Source: State Railway of Thailand unaudited financial statement from 2007 to 2012 State Railway of Thailand Expenses Structure Total expenses in 2012 (24,887 million baht) are made up of Operating Expenses 13,380 million baht (54%) and Other expenses 11,506 million baht (46%). The main SRT operating expense is traffic service expenses (Transportation in Table 1 above) totaling 6,845 million baht or 28 percent of total SRT expenses or 51% of total Operating expenses. Operating expenses can be divided into three main parts which are 1) Transportation expenses 51 percent of total operating expenses 2) Maintenance expenses which consists of maintenance for infrastructure and building and maintenance of locomotives and rolling stock represented 41 percent of total operating expenses and 3) Management expenses represented 8% of total operating expenses. Apart from the SRT operating expenses as mentioned above, SRT Other expenses accounted for 46 percent of total SRT expenses and these are comprised of 1) Pensions expenses 42 percent of total. 2) Interest expense accounted for 24 percent of total SRT other expenses. 3) Depreciation expense accounted for 17 percent of total SRT other expenses and 4) other expenses accounted for 17 percent of total SRT other expenses. Other SRT expenses increased significantly from 2007 due to the increase in the interest subsidized by government from 276 million baht in 2007 to 1,969 million baht in 2012(1% of total SRT expenses in 2007, 8% in However, the government subsidy for the SRT interest expense fully covered all SRT interest expenses. Pension costs made up most of the remaining increase (1,591 million baht) rising from 3,264 in 2007 to 4,855 in A-54

132 Appendix Table 2: SRT Financial Statement Income Statement from 2007 to 2012 (million baht) Income Statement : State Railway of Thailand (SRT) Revenues Traffic revenues 6, , , , , , Concession fares from the government Public Services Obligations , , , Property revenues 1, , , , , , Other revenues , , Total revenue 8, , , , , , Cost of goods sold Maintenance of Track, Signaling and Structures (1,332.00) (1,569.00) (1,591.00) (2,048.00) (2,510.00) (2,516.67) Maintenance of Locomotive and Rolling - Stock (2,267.00) (2,260.00) (2,514.00) (2,636.00) (2,972.00) (3,014.29) Transportation (6,399.00) (7,227.00) (6,245.00) (6,592.00) (6,739.00) (6,845.05) Total cost of goods sold (9,998.00) (11,056.00) (10,350.00) (11,276.00) (12,221.00) (12,376.00) Gross profit (1,787.00) (2,533.00) (1,860.00) (363.00) (779.00) (1,204.75) Selling, General & Administrative expenses Management (562.00) (584.00) (615.00) (686.00) (761.00) (1,005.10) Budget Railway Police Division Expenses (10.00) (8.00) 8.00 (13.00) (17.00) 0.73 Lump pension and monthly pension expenses (2,525.00) (2,777.00) (2,937.00) (3,102.00) (3,028.00) (3,483.41) Successive lump pension and monthly pension expenses (739.00) (443.00) (746.00) (292.00) (292.00) (1,371.28) Total selling, general & administrative expense (3,836.00) (3,812.00) (4,290.00) (4,093.00) (4,098.00) (5,859.07) EBITDA before non-recurring items (5,623.00) (6,345.00) (6,150.00) (4,456.00) (4,877.00) (7,063.82) Other revenues Compensation for fiber obtic cable project Funding for maintenance Profit on conversion of foreign currencies Interest Subsidies Expenses , , , , Other revenues Total other revenues 1, , , , , , Other expenses Loss on writing off property (9.00) (2.00) (8.00) Loss on conversion of foreign currencies - (365.00) (315.00) - (275.00) - Loss on writing off material and supplies (3.00) (2.00) Interest Subsides Expenses (276.00) (796.00) (1,486.00) (1,588.00) (1,576.00) (1,969.47) Total other expenses (288.00) (1,165.00) (1,809.00) (1,587.00) (1,851.00) (1,969.47) EBITDA after non-recurring items (3,995.00) (6,426.00) (5,941.00) (3,640.00) (4,757.00) (6,474.96) Depreciation expenses (1,701.00) (1,639.00) (1,980.00) (2,017.00) (1,992.00) (1,977.27) EBIT (5,696.00) (8,065.00) (7,921.00) (5,657.00) (6,749.00) (8,452.24) Interest expenses (2,168.00) (2,135.00) (2,156.00) (2,202.00) (2,346.00) (2,705.40) EBT (7,864.00) (10,200.00) (10,077.00) (7,859.00) (9,095.00) (11,157.64) Taxes Net profit (loss) (7,864.00) (10,200.00) (10,077.00) (7,859.00) (9,095.00) (11,157.64) Source: State Railway of Thailand unaudited financial statements A-55

133 Appendix (continue) Table 3: SRT Financial Statement Balance Sheet from 2007 to 2011 (million baht) Balance sheet : State Railway of Thailand (SRT) ASSETS Current assets Cash and cash equivalents 1, , , , Accounts receivable Other accounts receivable Advance Inventory 2, , , , , Other current assets , , Total current assets 4, , , , , Non-current assets Investment Property, plant & Equipment - net 74, , , , , Suvarnabhumi Airport City Line 14, , , , , Compensation for fiber obtic cable project Fund deposits and employee retention Other transfer payments pending on transfer Advance payment Other assets Total non-current assets 90, , , , , Total assets 94, , , , , LIABILITIES & SHARE HOLDERS' EQUITY Current liabilities Overdraft account Promissory note Accrude expense 1, , Current portion of long-term debt 3, , , , , Creditor of funds deposit for railway worker Accrued interest expense Other current liabilities , , Total current liabilities 5, , , , , Non-current liabilities Long-term loan 45, , , , , Creditors for construction of Suvarnabhumi Airport City Line 13, Creditors for fund deposits and employee retention Other receives pending on transfer , , , , Deposits and cash deposits Revenue recognition for donation 3, , , , , Pension funds and pension obligations 12, , , , , Total non-current liabilities 76, , , , , Total liabilities 81, , , , , Shareholders' equity Common equity 54, , , , , Retained loss (41,887.00) (47,685.00) (53,901.00) (57,661.00) (61,932.00) Total shareholders' equity 12, , , , , Total liabilities and shareholders'equity 94, , , , , Source: State Railway of Thailand unaudited financial statements from 2007 to 2011 A-56

134 SRT Key Accounting Ratios Growth Ratios Since SRT has not carried out renewals and significant investments in locomotives and railway track and equipment for some time other than the ARL project, the growth of SRT assets is quite stable across the period. The average of SRT asset growth during the past five years is approximately 9.28 percent Figure 1: SRT Assets from 2008 to 2011 (percentage / million baht) 20.00% 10.00% 0.00% Assets 117, , , , % 14.54% 6.14% 7.64% , , , Total assets Asset growth rate Source: State Railway of Thailand unaudited financial statements from 2008 to 2011 In comparison, the volatility of SRT liabilities growth rate is higher than SRT asset growth rate. The rationale behind this is that SRT liabilities amount each year is basing on various factors which are SRT investment policy, SRT financing policy, government support for public service obligation budget allocation each year and for the maintenance of railway tract and locomotives. Figure 2: SRT Liabilities from 2008 to 2011 (percentage / million baht) 20.00% 10.00% 0.00% % % Liabilities 80,647 85,778 88,916 71, % 3.66% 12.43% % 100,000 50,000 - Total liabilities Liability growth rate Source: State Railway of Thailand unaudited financial statements from 2008 to 2011 Considering the past five years from , SRT revenue has significantly increased by 28 percent due to the government support for public service obligations in the amount of 2,355 million baht. However, total revenue has slightly decreased from 2010 to 2012 due to the decrease in traffic revenue. As a result, SRT revenue growth has the average five years growth rate of 6.89 percent. A-57

135 Figure 3: SRT Revenue Growth Rate from 2008 to 2012 (percentage / million baht) 40.00% 30.00% 20.00% 10.00% 0.00% % Revenue 10, , , , , % -0.39% 28.54% 4.85% -2.37% , , , Total revenue Revenue growth rate Source: State Railway of Thailand unaudited financial statements from 2008 to 2012 As for growth of SRT operating service expenses, it tends to grow in the same direction with growth of SRT revenue resulting from the change in variable operating cost such as labor cost, supervisor cost, equipment cost, and fuel cost. Figure 4: SRT Net Profit Growth rate from 2008 to 2012 (percentage / million baht) 40.00% 20.00% 0.00% % % Net profit (10,200.00) (10,077.00) (7,859.00) (9,095.00) (11,157.64) 1.21% 22.01% % % % - (5,000.00) (10,000.00) (15,000.00) Net profit (loss) Net profit growth rate Source: State Railway of Thailand unaudited financial statements from 2008 to 2012 SRT net profit reduced dramatically (22 percent) in 2010 due to the revenue from government support (public service obligation) and decreased significantly for two consecutive years to percent in 2012 due to the decrease in traffic revenue and increase in operating cost which indicates the inefficient in generating revenues to cover the costs of SRT. Liquidity Ratio The current ratio is an indication of SRT s ability to pay short-term debt. Thus, if current ratio is greater than one, then it generally indicates short-term financial strength that current assets comprised of cash and cash equivalent, accounts receivable, and inventories proportionately exceed current liabilities. In general, current ratio should be greater than one to ensure the liquidity status of the firm and smooth operation. Considering SRT current ratio from 2008 to 2012, the ratio implies low liquidity status in paying off current obligations. In 2011, SRT current ratio is 0.73 which slightly increase due to the increase in SRT current assets. A-58

136 Figure 5: SRT Current Ratio from 2007 to 2011 (times) Current ratio Current ratio Source: State Railway of Thailand unaudited financial statements from 2007 to 2011 Profitability Ratio Gross Profit Margin Gross profit margin indicates the ability to control and manage cost of service or cost of production efficiently. SRT has negative gross profit margin for consecutive year which reflect SRT inability to generate sufficient revenue to fully cover the cost of services. However, in 2010, SRT gross profit margin significantly improved from percent in 2009 to 3.33 percent in 2010 due to the increase of revenue support from government for public service obligation totaling 2,114 million baht. Figure 6: SRT Gross Profit Margin (percentage) 0.00% -5.00% % % % % % % Gross profit margin % -3.33% % % % % Gross profit margin Source: State Railway of Thailand unaudited financial statements from 2007 to 2012 Operating Profit Margin Operating profit margin indicates the ability to control and manage cost of service or cost of production as well as selling and general & administrative expense efficiently. SRT has negative operating profit margin and it increases for consecutive year which indicate lack of operating cost management in terms of SRT cost of railway operation and SRT selling and general & Administrative expense. However, due to PSO subsidized by government in year 2010, SRT operating profit margin has slightly increased but it still maintain negative. A-59

137 Figure 7: SRT Operating Profit Margin from 2007 to 2012 (percentage) 0.00% % EBIT margin % % % % % % % % % % EBIT margin Source: State Railway of Thailand unaudited financial statements from 2007 to 2012 Net Profit Margin Net profit margin indicates SRT ability to control total SRT expenses compared with total SRT revenue. It can be seen that SRT net profit margin has consecutive negative net profit margin at a very high rate It significantly increased in 2010 from percent to percent and decreased to percent in 2011 and increase to percent in 2012 respectively. Figure 8: SRT Net Profit Margin from 2007 to 2012 (percentage) 0.00% % % % % % % % Net profit growth rate % % % % % % Net profit growth rate Source: State Railway of Thailand unaudited financial statements from 2007 to 2012 Efficiency Ratio Fixed Asset Turnover The average of SRT fixed asset turnover from 2008 to 2012 is approximately 0.09 times implied that SRT can generate revenue per year around 0.09 times of total fixed asset which appear to be relatively low and reflect low efficiency in utilizing existing fixed assets to generate property revenue. A-60

138 Figure 9: SRT Fixed Asset Turnover from 2007 to 2011 (times) Fixed asset turnover Fixed asset turnover Source: State Railway of Thailand unaudited financial statements from 2007 to 2011 Total Assets Turnover SRT total assets turnover is close to SRT total fixed asset turnover because most SRT assets are fixed asset approximately 90 percent of total SRT assets which can generate average revenue for 0.09 times of total existing asset. It appears to be relatively low and likely stable across the time. Figure 10: SRT Total Asset Turnover from 2007 to 2011 (times) Total asset turnover Total asset turnover Source: State Railway of Thailand unaudited financial statements from 2007 to 2011 Leverage Ratio Debt to Equity Ratio SRT debt to equity ratio tends to decrease continuously from year 2007 to year 2011 due to the increase of shareholder s equity from loan for construction of Suvarnabhumi airport city line and shareholder s equity from domestic loan backed by government continuously since year 2007 onwards. However, part of SRT equities comes from loan backed by government approximately 39 percent of total SRT equity. These reflects that SRT financial structure of SRT mainly come from liabilities. As a result, SRT has relatively high financial risk in paying back the loan. A-61

139 Figure 11: SRT Debt to Equity Ratio from 2007 to 2011 (times) Debt / Equity ratio Debt / Equity ratio Source: State Railway of Thailand unaudited financial statements from 2007 to 2011 Interest Coverage Interest coverage indicates the ability of SRT to pay the interest expense. SRT interest coverage is consecutively negative every year and indicates that SRT does not generate sufficient profit to fully cover for the interest expense from its loans. Figure 12: Interest Coverage from 2007 to 2011 (times) Interest coverage Interest coverage Source: State Railway of Thailand unaudited financial statements from 2007 to 2012 Rate of Return Return on Asset Return on asset indicates the ability of the assets in generating profits from the operation. During 2008 to 2012, SRT has negative return on asset every year. A-62

140 Figure 13: SRT Return on Asset from 2007 to 2011 (percentage) 0.00% -2.00% -4.00% -6.00% -8.00% % % Return on asset (ROA) % -6.77% -8.33% -9.93% -8.57% Return on asset (ROA) Source: State Railway of Thailand unaudited financial statements from 2007 to 2011 Return on Fixed Assets SRT has negative return on fixed asset every year. Figure 14: SRT Return on Fixed Asset from 2007 to 2011 (percentage) 0.00% -2.00% -4.00% -6.00% -8.00% % % Return on fixed asset (ROFA) % -7.31% -8.71% -9.19% % Return on fixed asset (ROFA) Source: State Railway of Thailand unaudited financial statements from 2007 to 2011 Return on Equity ROE measures SRT s efficiency at generating profits from every unit of shareholder s equity. Historically, SRT has negative ROE continuously every year which reflects SRTs inability to generating profits. A-63

141 Figure 15: SRT Return on Equity from 2007 to 2011 (percentage) 0.00% % % % Return on equity (ROE) % % % % % % Return on Equity (ROE) Source: State Railway of Thailand unaudited financial statements from 2007 to 2011 SRT Financial Performance Analysis Summary 1. Maintenance Expenses According to the maintenance expenses of SRT from 2007 to 2012, the maintenance cost comprised of two categories which are 1) Maintenance of track, signaling and structures and 2) Maintenance of locomotive and rolling stocks. Figure 16 below shows that maintenance costs of SRT tend to increase each year. A lack of renewals and investment in modern equipment mean that the majority of the assets in the balance sheet are life expired. Such a situation usually means higher annual maintenance requirements to keep these life expired assets running however it is understood historical restraints on funding have meant that maintenance has been inadequate and not effective impacting on safety and business activity. The planned track renewal and improvement investment plans when implemented should change the situation however asset management systems need to be improved with modern maintenance planning techniques being used. The life expired/damaged assets need to be written off and scrapped generating some cash for the business. SRT should focus on funding a realistic maintenance and renewals programme and this could involve restructuring the balance sheet (ie writing off debt and interest obligations), government taking over pension obligation and ensuring the PSO support is set at a level that compensates SRT fully for running uneconomic services including full maintenance and renewal commitments. A-64

142 Figure 16: SRT Maintenance Expense from 2007 to 2012 (million baht) 6, , Maintenance expenses 4, , , , , , , , , , , , , , , , , , , , , , Maintenance of Track, Signaling and Structures Maintenance of Locomotive and Rolling - Stock Depreciation expenses Source: State Railway of Thailand unaudited financial statements from 2007 to Debt Repayment As Figure 17 shows SRT s Earnings before interest, taxes, depreciation and amortization (EBITDA) is negative every year from 2008 to 2011 which is not sufficient to service debt payment and interest expense. This clearly is not a sustainable situation and action is needed to either improve SRT s EBITDA or reduce the amount of debt service. In the short term improving EBITDA will be difficult in the light of the poor state of the network and operating assets although increased property income may be a possibility. Additional PSO support would help, SRT however need to provide government with all necessary information on which to arrive at a realistic PSO including realistic maintenance and renewal budgets. SRT is technically bankrupt (losing money each year, overburdened with debt, interest and pension obligations and unable to sustain itself without government guarantees re borrowings). Previous studies into SRT s situation have suggested the government writing off debts and taking on the pension obligations. The aim would be to unburden SRT and enable it to operate with a more realistic balance sheet that combined with the PSO mechanism and expanded commercial services would provide a more sustainable way forward for SRT. Figure 17: Comparison among EBITDA, Debt Repayment, and Interest Expense from 2008 to 2011 (million baht) Debt repayment 6, , , (2,000.00) (4,000.00) (6,000.00) 3, , , , , , , (3,640.00) (4,757.00) (6,426.00) (5,941.00) (8,000.00) Debt repayment Interest expense EBITDA Source: State Railway of Thailand unaudited financial statements from 2007 to 2012 A-65

143 3. Public Service Obligation The PSO from government and the services it supports are a significant part of the SRT network and its finances. Since its commencement in 2010 the Government has provided SRT with the following PSO payments; ,114 million baht, ,285 million baht, and ,350 million baht. Unfortunately however the PSOs paid by the government tends to be lower than the amount requested each year by SRT. Also it is unclear whether or not it really compensates SRT fully for having to run 2/3 of its train services bearing in mind they are slow stopping services that take up a considerable amount of track capacity and resources. Figure 18 demonstrates that despite the PSO overall losses are still increasing due to declining traffic, the poor state of the assets and equipment. In 2012, SRT receiving a PSO of 2,350 million baht recorded an EBITDA of 6, million baht and a net loss after depreciation, interest and pension costs of 11, million baht. Figure 18: Comparison between EBITDA include PSO and EBITDA exclude PSO from 2007 to 2012 (million baht) - -1, , , , , , , , , , , , , , , , , , , EBITDA (include PSO) EBITDA (exclude PSO) Source: State Railway of Thailand unaudited financial statements from 2007 to 2012 A-66

144 Trend of Railway Travel Demand in Thailand The statistics of the 5 previous years from are analyzed in order to study the railway passenger trend and financial performance of each type of service offered. The information can be categorized into 2 types in accordance with SRT service offered as follows; 1. Commercial service, information categorized by types of train; namely express train, inter-city train, rapid train, and special express train. 2. Public service obligation service, information categorized by types of train; namely mixed trains, ordinary trains, Bangkok commuter train, and rural commuter train. Railway Passenger Categorized by Types of Train Table 1: Number of Passenger Kilometer (passengers-kilometer) Type of service Public Service Obligations Mixed Trains 6,132,015 8,059,902 7,004,452 7,004,452 6,738,988 Ordinary Trains 858,149,238 1,032,124, ,105, ,105, ,240,350 Bangkok 285,070, ,200, ,839, ,839, ,900,490 Commuter Rural Commuter 737,160, ,218, ,715, ,715, ,148,545 Total PSO 1,886,512,384 2,238,603,959 2,095,664,321 2,095,664,321 1,894,028,373 Commercial Passengers Express 1,350,782,975 1,158,131, ,994, ,981, ,528,848 Intercity 821,475, ,448, ,590, ,930, ,035,214 Rapid 3,368,368,964 3,966,274,631 3,804,115,577 3,694,599,201 3,141,392,367 Special Express 789,443, ,232, ,709, ,125, ,078,441 Total Commercial 6,330,071,267 6,586,087,529 6,091,409,620 5,852,636,668 5,245,034,870 Grand Total 8,216,583,651 8,824,691,488 8,187,073,941 8,032,161,698 7,139,063,243 Source: State Railway of Thailand financial information from 2008 to 2012 Table 1 illustrate the numbers of passengers-kilometer volumes, categorized by train types which are public service obligations railway passenger-kilometer, commercial service passenger-kilometer, and total railway passenger-kilometer respectively. Based on the passenger statistics during the period of 2008 to 2012, the study indicates that number of public service obligations passenger-kilometers has slightly increased by 0.1 percent while commercial service passenger-kilometers has declined by 4.59 percent. Consequently, the growth rate of total passengers-kilometers has decreased by 3.45 percent from 2008 to According to the public service obligations passengers-kilometer, total number of passengers-kilometer has slightly increased by 0.1 percent. Bangkok commuter obtained the highest increase approximately for 5.48 percent during the past five years. Contrastingly, only ordinary train passengers-kilometer has decreased by 1.92 percent while the other types of train increased for last five years. Commercial service passengers- kilometer has decreased and none of types of service has increased during the past five years. Among these, express train has the highest reduction in the amount of number of passengers-kilometer during the past five year by percent. Intercity train is the second rank of reduction approximately for 5.87 percent. In total, total number of passengers-kilometer has decreased by 4.59 percent. A-67

145 Railway Passenger Revenue Categorized by Types of Train Table 2: Railway Passenger Revenue, Categorized by Types of Train (million baht) Type of service Public Service Obligations Mixed Trains Ordinary Trains Bangkok Commuter Rural Commuter Total PSO Commercial Passengers Express Intercity Rapid 1, , , , , Special Express Total Commercial 3, , , , , Grand Total 4, , , , , Source: State Railway of Thailand financial information from 2008 to 2012 Figure 1: Revenue from Social Railway, Categorized by Types of Train (baht) 600,000, ,000, ,000, ,000, ,000, ,000, ,525, ,154, ,918, ,388, ,659, Mixed Trains Ordinary Trains Bangkok Commuter Rural Commuter Total PSO Source: State Railway of Thailand financial information from 2008 to 2012 Public service obligations service or social railway revenue experienced a 0.16 percent revenue reduction during Mixed trains were the most significant decrease approximately for percent followed by ordinary train for 3.68 percent. However, revenue from rural commuter and Bangkok commuter has slightly increased by 3.53 percent and 1.62 percent respectively. Figure 2: Revenue from Commercial Railway, Categorized by Types of Train (baht) 4,500,000, ,000,000, ,500,000, ,000,000, ,500,000, ,000,000, ,500,000, ,000,000, ,000, ,900,380, ,015,705, ,725,117, ,607,990, ,219,078, Express Intercity Rapid Special Express Total Commercial Source: State Railway of Thailand financial information from 2008 to 2012 Further to this, revenue from commercial railway service experienced less passenger revenue during , or 4.69 percent decrease on the average growth from all types of commercial railway service due to the dramatic decrease in number of total commercial railway passenger especially express train. As a result, total revenues from all types of train A-68

146 during the period of 2008 to 2012 were decreased by 4.20 percent due to the decrease in both revenue from public service obligations and social railway service. Figure 3: Total Revenue from Passenger Railway, Categorized by PSO and Commercial (baht) 5,000,000, ,500,000, ,000,000, ,500,000, ,000,000, ,500,000, ,000,000, ,500,000, ,000,000, ,000, ,336,768, ,505,230, ,194,272, ,099,908, ,652,737, ,900,380, ,015,705, ,725,117, ,607,990, ,219,078, ,388, ,525, ,154, ,918, ,659, Public Service Obligations Commercial Passenger Grand Total Source: State Railway of Thailand financial information from 2008 to 2012 Table 3: Revenue per Passenger-km (baht per passenger-km) Type of service Public Service Obligations Mixed Trains Ordinary Trains Bangkok Commuter Rural Commuter Total PSO Commercial Passengers Express Intercity Rapid Special Express Total Commercial Grand Total Source: State Railway of Thailand financial information from 2008 to 2012 A-69

147 Financial Analysis by Categories of Service The statistics categorized by types of trains in 2012 are analyzed in order to study financial performance of each type of service offered. The information can be categorized into 2 types in accordance with SRT service offered as follows; 1. Commercial Passengers: Type of service offered can be divided into five categories as follows; a. Special Express (PSE) b. Express (PEX) c. Intercity (PIC) d. Rapid (PRA) e. Excursion (PXC) 2. Public Service Obligation Passengers: Type of service offered can be divided into four categories as follows; a. Mixed (PMX) b. Bangkok Commuter (PSB) c. Local Commuter (PSR) d. Ordinary (POR) 700,000, ,000, ,000, ,000, ,000, ,000, ,000,000 Figure 1: SRT Passenger Revenue by Categories of Service 2012 (baht) - Special Express (PSE) Express (PEX) Intercity (PIC) Rapid (PRA) Excursion (PXC) Mixed (PMX) Bangkok Commuter (PSB) Local Commuter (PSR) Ordinary (POR) North Northeast East South Maeklong Source: State Railway of Thailand Financial Information 2012 Figure 1 illustrate SRT passenger revenue by categories of service and route service in year As for commercial passenger, rapid train (PRA) has generated highest passenger revenue among other SRT passenger services offered which is approximately 1,384 million baht in which southern line has gained highest portion of total revenue from rapid train (PRA) of 632 million baht in Special Express (PSE) train is the second rand which has also gained high portion of revenue generated of 778 million baht especially from southern part of 482 million baht in 2012 while excursion (PXC) has gained lowest passenger revenue which is 14 million baht in 2012 due to limit number of services offered in eastern line and southern line. According to route perspective among all commercial service categories, southern line has gained highest revenue of 1,632 million baht followed by north eastern line of 1,087 million baht, Northern line of 684 million baht, and eastern line of 29,303 baht respectively. A-70

148 As for PSO passenger, all services offered have generated relatively low revenue. Operationally, Ordinary train (POR) has generated highest passenger revenue among other PSO train services which is approximately 173 million baht, followed by local commuter of 165 million baht, Bangkok commuter of 96 million baht, and mixed train of 2 million baht respectively. For the route perspective among all PSO service categories, likewise commercial service, Southern line has also earned highest revenue of 146 million baht followed by northeastern line of 97 million baht, Northern line of 92 million baht, Eastern line of 73 million baht, and Mae Klong of 28 million baht respectively. Figure 2: SRT Passenger Contribution Margin by Categories of Service 2012 (baht) 200,000, ,000, ,000,000 50,000, ,000, ,000, ,000,000 Special Express (PSE) Express (PEX) Intercity (PIC) Rapid (PRA) Excursion (PXC) Mixed (PMX) Bangkok Commuter (PSB) Local Commuter (PSR) Ordinary (POR) -200,000, ,000, ,000,000 North Northeast East South Maeklong Source: State Railway of Thailand Financial Information 2012 Figure 2 illustrates contribution margin of SRT commercial and PSO passenger services. It can be seen from the bar chart that there are only special express (PSE) and Express (PEX) types of train that can generate positive gross profit after deduction of variable cost which are comprised of 1) Operating cost of transportation 2) Maintenance cost of locomotive and 3) Maintenance cost of civil works and electrical & mechanical works. Special express (PSE) train s contribution margin in 2012 is 217 million baht and Express (PEX) train s contribution margin in 2012 is 181 million baht. Apart from these two services, they has generated negative contribution margin in As for commercial passenger, Intercity (PIC) has generated lowest contribution margin which is approximately 273 million baht, followed by Rapid train (PRA) which is 41 million baht and Excursion (PXC) is 20 million baht respectively. As a result, total commercial passenger contribution margin is 63 million baht. As for PSO passenger, Local commuter (PSR) has generated lowest contribution margin of 539 million baht and total PSO passenger contribution margin in 2012 is 1,087 million baht. A-71

149 Figure 3: SRT Net Profit (Loss) by Categories of Service 2012 (baht) 0-200,000, ,000, ,000,000 Special Express (PSE) Express (PEX) Intercity (PIC) Rapid (PRA) Excursion (PXC) Mixed (PMX) Bangkok Commuter (PSB) Local Commuter (PSR) Ordinary (POR) -800,000,000-1,000,000,000-1,200,000,000-1,400,000,000-1,600,000,000-1,800,000,000-2,000,000,000 North Northeast East South Maeklong Source: State Railway of Thailand Financial Information 2012 Figure 3 illustrates SRT net profit or loss of SRT commercial passenger and PSO passenger (Before Government subsidy) in All categories of SRT service generated losses after deduction of all expenses which are comprised of variable cost (as mentioned in part of Figure 2), fixed cost (Operating and maintenance cost of locomotives, total infrastructure cost), Central cost, Depreciation expenses(operating and maintenance, infrastructure), and interest rate(operating and maintenance, total infrastructure). According to commercial passenger service, Rapid (PRA) train has generated highest net losses of 3,638 million baht followed by Intercity (PIC) of 1,580 million baht, Special express (PSE) of 1,215 million baht, Express train (PEX) of 1,179 million baht, and Excursion (PXC) of 107 million baht respectively. In total, total losses from commercial passenger service is 7,718 million baht in Apart from this, for PSO passenger service, Local commuter (PSR) has generated highest losses which is 1,960 million baht in 2012, followed by Ordinary train (POR) of 1,444 million baht, Bangkok commuter train (PSB) of 758 million baht, and Mixed train (PMX) of 48 million baht respectively. In total, total losses from PSO passenger service is 4,211 million baht. As a result, net profit from all categories of services offered from SRT in 2012 is 11,930 million baht in which Southern line is the route that has generated highest deficit which is 5,035 million baht, followed by Northeastern line of 3,229 million baht, Northern line of 2,759 million baht, Eastern line of 705 million baht, Mae Klong line of 200 million baht respectively. A-72

150 Figure 4: SRT Government Subsidy by Categories of Service 2012 (baht) 400,000, ,000, ,000, ,000, ,000, ,000, ,000,000 50,000,000 - Special Express (PSE) Express (PEX) Intercity (PIC) Rapid (PRA) Excursion (PXC) Mixed (PMX) Bangkok Commuter (PSB) Local Commuter (PSR) Ordinary (POR) North Northeast East South Maeklong Source: State Railway of Thailand Financial Information 2012 Figure 4 illustrates number of Government subsidy for PSO passenger services which are comprised of Mixed (PMX) train, Bangkok Train (PSB), Local Commuter Train (PSR), and Ordinary Train (POR). It can be seen from the bar chart that Bangkok commuter has gained highest amount of Government subsidy of 815 million baht by which Mae Klong line are the route that has been received highest amount equal to 286 million baht. Although Local Commuter has generated highest loss of 1,960 million baht it has been supported from Government in the amount of 798 million baht which is less than amount supported to Bangkok commuter. Mixed train (PMX) has been received the least government support which is 11 million baht due to small size of service offered. In total from every SRT service offered, Southern line has been received highest amount of government support which is approximately around 619 million baht, followed by Northeastern line of 482 million baht, Eastern line of 478 million baht, Northern line of 465 million baht, and Mae Klong of 304 million baht respectively. As a result, government subsidy amount for both commercial passenger service and PSO passenger service is approximately 2,350 million baht. Figure 5: SRT Net Profit after Government Subsidy by Categories of Service 2012 (baht) 500,000, ,000,000 Special Express (PSE) Express (PEX) Intercity (PIC) Rapid (PRA) Excursion (PXC) Mixed (PMX) Bangkok Commuter (PSB) Local Commuter (PSR) Ordinary (POR) -1,000,000,000-1,500,000,000-2,000,000,000 North Northeast East South Maeklong Source: State Railway of Thailand Financial Information 2012 Figure 5 illustrates SRT net profit after the inclusion of government subsidy by categories of service in Net loss of PSO passenger service has been relieved from 4,211 million baht to 1,861 million baht in Mixed train (PMX) s net profit has been increased after included government subsidy from 48 million baht to 36 million baht. Bangkok Commuter train (PSB) s net profit has been turn out to be positive after inclusion of PSO support from A-73

151 758 million baht to 57 million baht. Local commuter train (PSR) s net profit has been increased from 1,960 million baht to 1,162 million baht. Ordinary train (POR) s net profit has been increased from 1,444 million baht to 720 million baht. Total PSO passenger service s revenue after inclusion government subsidy is 1,861 million baht. As a result, net profit from both commercial and PSO passenger service in 2012 is -9,579 million baht which has been increased from 11,930 million baht. Appendix Commercial Table 1: Passenger Revenue by Categories of Service 2012 (baht) Lines North Northeast East South Maeklong Total Special Express (PSE) 295,877, ,450, ,327,271 Express (PEX) 71,703, ,372, ,293, ,368,984 Intercity (PIC) 110,670, ,102, ,292, ,064,862 Rapid (PRA) 206,472, ,863, ,685,361-1,384,020,439 Excursion (PXC) ,303 14,473,714-14,503,017 PSO Sub Total Comm. 684,723,075 1,087,337,859 29,303 1,632,194,336-3,404,284,573 Mixed (PMX) ,225,599-2,225,599 Bangkok Commuter (PSB) 25,252,583 7,738,791 28,050,049 8,136,675 26,835,462 96,013,560 Local Commuter (PSR) 19,429,948 67,905,882-76,259,976 2,044, ,640,157 Ordinary (POR) 47,236,665 21,000,863 44,873,479 60,376, ,487,403 Sub Total PSO 91,919,196 96,645,536 72,923, ,998,646 28,879, ,366,719 Total 776,642,271 1,183,983,395 72,952,831 1,779,192,982 28,879,813 3,841,651,292 Source: State Railway of Thailand financial information 2012 Commercial Table 2: Contribution Margin by Categories of Service 2012 (baht) Lines North Northeast East South Maeklong Total Special Express (PSE) 61,192, ,222, ,415,239 Express (PEX) -25,136, ,605,869-87,108, ,577,462 Intercity (PIC) -113,393, ,529, ,597, ,520,935 Rapid (PRA) -116,561,665 87,336, ,057, ,282,680 Excursion (PXC) -210, ,479-20,324, ,536,769 PSO Sub Total Comm. -194,109,015 91,412,773-2, ,351,038-63,652,317 Mixed (PMX) ,987, ,987,521 Bangkok Commuter (PSB) -33,964,798-16,840,330-47,703,076-45,521,161-36,912, ,941,597 Local Commuter (PSR) -69,768, ,586, ,946,025-14,414, ,715,318 Ordinary (POR) -92,076,317-27,130, ,660, ,981, ,848,159 Sub Total PSO -195,809, ,557, ,363, ,435,969-51,326,236-1,087,492,595 Total -389,918, ,144, ,365, ,084,931-51,326,236-1,023,840,278 Source: State Railway of Thailand financial information 2012 A-74

152 Commercial Table 3: EBITDA by Categories of Service 2012 (baht) Lines North Northeast East South Maeklong Total Special Express (PSE) -209,542, ,393, ,936,085 Express (PEX) -123,777, ,919, ,179, ,875,927 Intercity (PIC) -278,998, ,756, ,799, ,555,193 Rapid (PRA) -431,925, ,909, ,566, ,732,401,230 Excursion (PXC) -281, ,063-65,773, ,086,332 PSO Sub Total Comm. -1,044,526,537-1,001,585,271-31,063-1,484,711, ,530,854,767 Mixed (PMX) ,891, ,891,203 Bangkok Commuter (PSB) -92,251,352-40,346, ,277, ,348,150-84,406, ,630,338 Local Commuter (PSR) -171,891, ,291, ,937,488-28,905,288-1,236,025,859 Ordinary (POR) -209,848,199-69,337, ,835, ,121, ,142,542 Sub Total PSO -473,990, ,975, ,113, ,298, ,311,594-2,553,689,942 Total -1,518,517,471-1,618,561, ,144,481-2,464,010, ,311,594-6,084,544,709 Source: State Railway of Thailand financial information 2012 Table 4: Net Profit (Before Government Subsidy) by Categories of Service 2012 (baht) Commercial Lines North Northeast East South Maeklong Total Special Express (PSE) -557,768, ,895, ,214,663,909 Express (PEX) -240,644, ,273, ,064, ,178,982,367 Intercity (PIC) -464,300, ,347, ,391, ,580,038,308 Rapid (PRA) -773,078,882-1,130,595, ,734,426, ,638,100,566 Excursion (PXC) -315, , ,413, ,784,791 PSO Sub Total Comm. -2,036,106,728-2,251,216,650-55,899-3,431,190, ,718,569,941 Mixed (PMX) ,168, ,168,689 Bangkok Commuter (PSB) -141,549,860-61,127, ,807, ,951, ,071, ,508,277 Local Commuter (PSR) -261,410, ,815, ,225,931-56,364,438-1,960,816,560 Ordinary (POR) -319,725, ,124, ,935, ,395, ,444,180,695 Sub Total PSO -722,686, ,067, ,743,066-1,604,742, ,435,798-4,211,674,221 Total -2,758,792,763-3,229,283, ,798,965-5,035,932, ,435,798-11,930,244,162 Source: State Railway of Thailand financial information 2012 Commercial Table 5: Government Subsidy by Categories of Service 2012 (baht) Lines North Northeast East South Maeklong Total Special Express (PSE) Express (PEX) Intercity (PIC) Rapid (PRA) Excursion (PXC) PSO Sub Total Comm Mixed (PMX) ,896,407-11,896,407 Bangkok Commuter (PSB) 174,627,247 54,527, ,820,201 70,857, ,865, ,698,311 Local Commuter (PSR) 91,118, ,148, ,199,381 19,102, ,568,117 Ordinary (POR) 198,942,386 57,507, ,688, ,964, ,103,163 Sub Total PSO 464,688, ,183, ,508, ,917, ,967,812 2,350,265,998 Total 464,688, ,183, ,508, ,917, ,967,812 2,350,265,998 Source: State Railway of Thailand financial information 2012 A-75

153 Table 6: Net Profit (After Government Subsidy) by Categories of Service 2012 (baht) Commercial Lines North Northeast East South Maeklong Total Special Express (PSE) -557,768, ,895, ,214,663,909 Express (PEX) -240,644, ,273, ,064, ,178,982,367 Intercity (PIC) -464,300, ,347, ,391, ,580,038,308 Rapid (PRA) -773,078,882-1,130,595, ,734,426, ,638,100,566 Excursion (PXC) -315, , ,413, ,784,791 PSO Sub Total Comm. -2,036,106,728-2,251,216,650-55,899-3,431,190, ,718,569,941 Mixed (PMX) ,282, ,282,282 Bangkok Commuter (PSB) 33,077,387-6,599,835 26,012, ,094, ,794,273 57,190,034 Local Commuter (PSR) -170,292, ,667, ,026,550-37,262,259-1,162,248,443 Ordinary (POR) -120,783,068-54,616, ,246, ,431, ,077,532 Sub Total PSO -257,997, ,884, ,234, ,834, ,532,014-1,861,418,223 Total -2,294,104,718-2,747,100, ,289,968-4,416,024, ,532,014-9,579,988,164 Source: State Railway of Thailand financial information 2012 Figure 6: Revenue from Commercial Passenger by Categories of Line 2012 (baht) 700,000, ,000, ,000, ,000, ,000, ,000, ,000,000 - North Northeast East South Maeklong Special Express (PSE) Express (PEX) Intercity (PIC) Rapid (PRA) Excursion (PXC) Source: State Railway of Thailand Financial information 2012 Figure 7: Revenue from PSO Passenger by Categories of Line 2012 (baht) 90,000,000 80,000,000 70,000,000 60,000,000 50,000,000 40,000,000 30,000,000 20,000,000 10,000,000 - North Northeast East South Maeklong Mixed (PMX) Bangkok Commuter (PSB) Local Commuter (PSR) Ordinary (POR) Source: State Railway of Thailand Financial Information 2012 A-76

154 Figure 8: Contribution Margin from Commercial Passenger by Categories of Line 2012 (baht) 200,000, ,000, ,000,000 50,000, ,000,000 North Northeast East South Maeklong -100,000, ,000,000 Special Express (PSE) Express (PEX) Intercity (PIC) Rapid (PRA) Excursion (PXC) Source: State Railway of Thailand Financial Information 2012 Figure 9: Contribution Margin from PSO Passenger by Categories of Line 2012 (baht) - -50,000,000 North Northeast East South Maeklong -100,000, ,000, ,000, ,000,000 Mixed (PMX) Bangkok Commuter (PSB) Local Commuter (PSR) Ordinary (POR) Source: State Railway of Thailand Financial Information 2012 Figure 10: EBITDA from Commercial Passenger by Categories of Line 2012 (baht) 0-200,000,000 North Northeast East South Maeklong -400,000, ,000, ,000,000-1,000,000,000 Special Express (PSE) Express (PEX) Intercity (PIC) Rapid (PRA) Excursion (PXC) Source: State Railway of Thailand Financial Information 2012 A-77

155 Figure 11: EBITDA from PSO Passenger by Categories of Line 2012 (baht) ,000,000 North Northeast East South Maeklong -200,000, ,000, ,000, ,000, ,000,000 Mixed (PMX) Bangkok Commuter (PSB) Local Commuter (PSR) Ordinary (POR) Source: State Railway of Thailand Financial Information 2012 Figure 12: Net Profit (Loss) from Commercial Passenger by Categories of Line 2012 (baht) 0-500,000,000 North Northeast East South Maeklong -1,000,000,000-1,500,000,000-2,000,000,000 Special Express (PSE) Express (PEX) Intercity (PIC) Rapid (PRA) Excursion (PXC) Source: State Railway of Thailand Financial Information 2012 Figure 13: Net Profit (Loss) Before Government Subsidy from PSO Passenger by Categories of Line 2012 (baht) ,000,000 North Northeast East South Maeklong -400,000, ,000, ,000,000-1,000,000,000 Mixed (PMX) Bangkok Commuter (PSB) Local Commuter (PSR) Ordinary (POR) Source: State Railway of Thailand Financial Information 2012 A-78

156 Figure 14: Net Profit (Loss) After Government Subsidy from PSO Passenger by Categories of Line 2012 (baht) 200,000, ,000, ,000,000 North Northeast East South Maeklong -200,000, ,000, ,000, ,000, ,000,000 Mixed (PMX) Bangkok Commuter (PSB) Local Commuter (PSR) Ordinary (POR) Source: State Railway of Thailand Financial Information 2012 A-79

157 State Railway of Thailand Financial Forecast Analysis Table 1: State Railway of Thailand Financial Forecast from 2008 to 2020 (million baht) I ncome statement 2007 A 2008 A 2009 A 2010 A 2011 A 2012 A 2013 F 2014 F 2015 F 2016 F 2017 F 2018 F 2019 F 2020 F Revenue Transportation revenue 6, , , , , , , , , , , , , , Income from property management 1, , , , , , , , , , , , , , PSO , , , , , , , , , , , Other revenue , , , , , , , Total revenue 8, , , , , , , , , , , , , , Cost of goods sold Infrastructure and buildings (1,332.00) (1,569.00) (1,591.00) (2,048.00) (2,510.00) (2,516.67) (2,516.67) (2,453.75) (2,392.41) (2,332.59) (2,274.28) (2,217.42) (2,161.99) (2,107.94) Maintenance of locomotives and rolling stock (2,267.00) (2,260.00) (2,514.00) (2,636.00) (2,972.00) (3,014.29) (3,014.29) (2,938.93) (2,865.46) (2,793.82) (2,723.97) (2,655.88) (2,589.48) (2,524.74) Transportation (6,399.00) (7,227.00) (6,245.00) (6,592.00) (6,739.00) (6,845.05) (6,495.18) (6,495.18) (6,821.28) (7,262.44) (8,108.33) (8,808.45) (9,366.43) (9,579.69) Total contribution margin (1,787.00) (2,533.00) (1,860.00) (363.00) (779.00) (1,204.75) (1,425.87) (1,287.60) (946.69) (536.42) , , Operating expenses Management (562.00) (584.00) (615.00) (686.00) (761.00) (1,005.10) (1,055.36) (1,108.13) (1,163.53) (1,221.71) (1,282.79) (1,346.93) (1,414.28) (1,484.99) Other (10.00) (8.00) 8.00 (13.00) (17.00) Total operating expenses (572.00) (592.00) (607.00) (699.00) (778.00) (1,004.38) (1,054.63) (1,107.38) (1,162.76) (1,220.92) (1,281.98) (1,346.09) (1,413.41) (1,484.10) Loss from operations (2,359.00) (3,125.00) (2,467.00) (1,062.00) (1,557.00) (2,209.13) (2,480.51) (2,394.98) (2,109.45) (1,757.33) (1,155.61) (652.28) (245.12) (62.24) Other incomes 1, , , , , , , , , , , , , , Other expenses Pensions expenses (3,264.00) (3,220.00) (3,683.00) (3,394.00) (3,320.00) (4,854.69) (4,854.69) (4,854.69) (4,854.69) (4,854.69) (4,854.69) (4,854.69) (4,854.69) (4,854.69) Depreciation (1,701.00) (1,639.00) (1,980.00) (2,017.00) (1,992.00) (1,977.27) (1,876.21) (1,876.21) (1,970.41) (2,097.84) (2,342.19) (2,544.43) (2,705.61) (2,767.21) I nterest (2,168.00) (2,135.00) (2,156.00) (2,202.00) (2,346.00) (2,705.40) (2,567.12) (2,567.12) (2,696.00) (2,870.37) (3,204.69) (3,481.40) (3,701.94) (3,786.22) Other (288.00) (1,165.00) (1,809.00) (1,587.00) (1,851.00) (1,969.47) (1,868.80) (1,868.80) (1,962.62) (2,089.56) (2,332.94) (2,534.38) (2,694.92) (2,756.28) Total other (7,421.00) (8,159.00) (9,628.00) (9,200.00) (9,509.00) (11,506.83) (11,166.82) (11,166.82) (11,483.72) (11,912.45) (12,734.51) (13,414.90) (13,957.15) (14,164.40) expenses Total net loss (7,864.00) (10,200.00) (10,077.00) (7,859.00) (9,095.00) (11,157.64) (11,219.77) (11,134.24) (11,043.74) (10,955.47) (10,859.65) (10,775.05) (10,701.59) (10,646.25) Source: State Railway of Thailand Financial Information and Consultant analysis Table 1 illustrates financial forecast of State Railway of Thailand ( SRT ) financial performance during year 2007 to 2020 based on traffic forecast. Traffic demand forecast is expected to increase from 40 million passengers per year in 2012 to 57 million passengers per year in 2020 lead to upward trend of revenue from transportation. Total revenues are running at the average of approximately 11,500 million baht per year from 2007 to Additionally, maintenance cost will be improved from year 2013 onwards by rehabilitation program and effective maintenance cost control. Transportation cost will be increased from year 2013 onwards in accordance with upward trend of traffic demand forecast. Regarding to this, contribution margin will be improved and turn up from negative to positive in year 2017 onwards. Operationally, operating cost is expected to increase due to rising personnel demand and fuel cost during this period end up with loss from operations which are running approximately 1,680 million baht per year. In addition to the operating losses from 2007 to 2020 mentioned above, interest expenses of approximately 2,750 million baht per year, depreciation expense of approximately 2,100 million baht per year, and pension plan expenses of approximately 4,320 million baht. Taking all of the expenses into account, the financial losses they cause are now 10,200 million baht per year. Figure 1: State Railway of Thailand Total Net Profit (Loss) Growth Rate from 2008 to 2020 (percentage) Net profit 30.00% 20.00% 22.01% - (2,000.00) 10.00% (4,000.00) 0.00% % 1.21% 2008 A 2009 A 2010 A 2011 A 2012 A 2013 F 2014 F 2015 F 2016 F 2017 F 2018 F 2019 F 2020 F -0.56% -0.35% -0.27% -0.26% -0.16% -0.24% -0.31% -0.44% % (6,000.00) (8,000.00) % (10,077.00) (7,859.00) (9,095.00) % (10,000.00) % (11,157.64) (11,219.77) (11,258.71) (11,289.26) (11,318.70) (11,337.34) (11,364.02) (11,398.77) (11,448.62) (12,000.00) % (10,200.00) % (14,000.00) Net profit (THBmn) Net profit growth rate (%) Source: State Railway of Thailand Financial Information and Consultant analysis Figure 1 illustrates growth rate of State Railway of Thailand ( SRT ) net profit from year 2008 to year Net profit has been significantly increased from percent in year 2008 to 1.21 percent in year 2009 and reached percent in year However, net profit A-80

158 growth rate has been sharply decreased from year 2010 to percent in year 2011 and 22 percent in year 2012 respectively. During forecast period, the ratio implies that net profit growth rate of SRT is expected to significantly improve from percent in year 2012 to 0.56 percent in year After this, net profit growth rate is expected to keep constant ranging between 0.3 percent to 0.4 percent from year 2013 to year A-81

159 A-82 Table 2: SRT Financial Forecast Year Income Statement : State Railway of Thailand (SRT) 2007 A 2008 A 2009 A 2010 A 2011 A 2012 A 2013 F 2014 F 2015 F 2016 F 2017 F 2018 F 2019 F 2020 F Revenues Traffic revenues 6, , , , , , , , , , , , , , Concession fares from the government Public Services Obligations , , , , , , , , , , , Property revenues 1, , , , , , , , , , , , , , Other revenues , , , , , , Total revenue 8, , , , , , , , , , , , , , Cost of goods sold Maintenance of Track, Signaling and Structures (1,332.00) (1,569.00) (1,591.00) (2,048.00) (2,510.00) (2,516.67) (2,388.03) (2,388.03) (2,507.92) (2,670.12) (2,981.13) (3,238.53) (3,443.68) (3,522.09) Maintenance of Locomotive and Rolling - Stock (2,267.00) (2,260.00) (2,514.00) (2,636.00) (2,972.00) (3,014.29) (2,860.22) (2,860.22) (3,003.82) (3,198.09) (3,570.59) (3,878.89) (4,124.60) (4,218.51) Transportation (6,399.00) (7,227.00) (6,245.00) (6,592.00) (6,739.00) (6,845.05) (6,495.18) (6,495.18) (6,821.28) (7,262.44) (8,108.33) (8,808.45) (9,366.43) (9,579.69) Total cost of goods sold (9,998.00) (11,056.00) (10,350.00) (11,276.00) (12,221.00) (12,376.00) (11,743.43) (11,743.43) (12,333.02) (13,130.65) (14,660.05) (15,925.88) (16,934.72) (17,320.28) Gross profit (1,787.00) (2,533.00) (1,860.00) (363.00) (779.00) (1,204.75) (1,143.17) (1,143.17) (1,200.57) (1,278.21) (1,427.09) (1,550.31) (1,648.52) (1,686.05) Selling, General & Administrative expenses Management (562.00) (584.00) (615.00) (686.00) (761.00) (1,005.10) (953.73) (953.73) (1,001.61) (1,066.39) (1,190.60) (1,293.40) (1,375.33) (1,406.65) Budget Railway Police Division Expenses (10.00) (8.00) 8.00 (13.00) (17.00) Lump pension and monthly pension expenses (2,525.00) (2,777.00) (2,937.00) (3,102.00) (3,028.00) (3,483.41) (3,305.36) (3,305.36) (3,471.31) (3,695.82) (4,126.29) (4,482.57) (4,766.53) (4,875.05) Successive lump pension and monthly pension expenses (739.00) (443.00) (746.00) (292.00) (292.00) (1,371.28) (1,301.19) (1,301.19) (1,366.52) (1,454.90) (1,624.36) (1,764.61) (1,876.39) (1,919.11) Total selling, general & administrative expense (3,836.00) (3,812.00) (4,290.00) (4,093.00) (4,098.00) (5,859.07) (5,559.59) (5,559.59) (5,838.72) (6,216.33) (6,940.38) (7,539.65) (8,017.26) (8,199.79) EBITDA before non-recurring items (5,623.00) (6,345.00) (6,150.00) (4,456.00) (4,877.00) (7,063.82) (6,702.77) (6,702.77) (7,039.28) (7,494.54) (8,367.47) (9,089.97) (9,665.78) (9,885.85) Other revenues Compensation for fiber obtic cable project Funding for maintenance Profit on conversion of foreign currencies Interest Subsidies Expenses , , , , , , , , , , , , Other revenues Total other revenues 1, , , , , , , , , , , , , , Other expenses Loss on writing off property (9.00) (2.00) (8.00) Loss on conversion of foreign currencies - (365.00) (315.00) - (275.00) Loss on writing off material and supplies (3.00) (2.00) Interest Subsides Expenses (276.00) (796.00) (1,486.00) (1,588.00) (1,576.00) (1,969.47) (1,868.80) (1,868.80) (1,962.62) (2,089.56) (2,332.94) (2,534.38) (2,694.92) (2,756.28) Total other expenses (288.00) (1,165.00) (1,809.00) (1,587.00) (1,851.00) (1,969.47) (1,868.80) (1,868.80) (1,962.62) (2,089.56) (2,332.94) (2,534.38) (2,694.92) (2,756.28) EBITDA after non-recurring items (3,995.00) (6,426.00) (5,941.00) (3,640.00) (4,757.00) (6,474.96) (6,144.01) (6,144.01) (6,452.47) (6,869.79) (7,669.95) (8,332.21) (8,860.02) (9,061.75) Depreciation expenses (1,701.00) (1,639.00) (1,980.00) (2,017.00) (1,992.00) (1,977.27) (1,876.21) (1,876.21) (1,970.41) (2,097.84) (2,342.19) (2,544.43) (2,705.61) (2,767.21) EBIT (5,696.00) (8,065.00) (7,921.00) (5,657.00) (6,749.00) (8,452.24) (8,020.22) (8,020.22) (8,422.88) (8,967.63) (10,012.13) (10,876.64) (11,565.63) (11,828.95) Interest expenses (2,168.00) (2,135.00) (2,156.00) (2,202.00) (2,346.00) (2,705.40) (2,567.12) (2,567.12) (2,696.00) (2,870.37) (3,204.69) (3,481.40) (3,701.94) (3,786.22) EBT (7,864.00) (10,200.00) (10,077.00) (7,859.00) (9,095.00) (11,157.64) (10,587.34) (10,587.34) (11,118.88) (11,837.99) (13,216.83) (14,358.04) (15,267.57) (15,615.17) Taxes Net profit (loss) (7,864.00) (10,200.00) (10,077.00) (7,859.00) (9,095.00) (11,157.64) (10,587.34) (10,587.34) (11,118.88) (11,837.99) (13,216.83) (14,358.04) (15,267.57) (15,615.17) Capacity Development Technical Assistance TA 8183 (THA): Source: State Railway of Thailand Financial information and consultant s analysis

160 A-83 Table 3: Financial Statement of SRT / Special Rapid Train (PSE) Commercial Passenger Year 2012 Commercial train by type of train Spacial express train (PSE) Northern line Southern line Total Total fare box revenue 295,877, ,450, ,327, Variable cost Operating cost of transportation (153,880,337.52) (221,374,519.54) (375,254,857.06) Maintenance cost (Locomotives) (39,558,787.64) (60,049,805.25) (99,608,592.89) Maintenance cost (Civil and E&M) (41,245,460.83) (44,803,121.26) (86,048,582.09) Total variable costs (234,684,585.99) (326,227,446.05) (560,912,032.04) Gross profit 61,192, ,222, ,415, Fixed cost Operating and maintenance cost (Locomotives) (132,639,576.85) (190,534,630.60) (323,174,207.45) Total Intrastructure cost (107,323,221.56) (104,415,302.78) (211,738,524.34) Total fixed cost (239,962,798.41) (294,949,933.38) (534,912,731.79) Central cost (30,772,865.10) (66,665,728.91) (97,438,594.01) EBITDA (209,542,996.77) (205,393,089.15) (414,936,085.92) Depreciation expenses Operating and maintenance cost (38,915,238.58) (52,850,634.38) (91,765,872.96) Total Intrastructure cost (51,045,067.90) (77,471,877.44) (128,516,945.34) Total depreciation expenses (89,960,306.48) (130,322,511.82) (220,282,818.30) EBIT (299,503,303.25) (335,715,600.97) (635,218,904.22) Interest rate Operating and maintenance cost (26,034,135.04) (51,334,442.92) (77,368,577.96) Total Intrastructure cost (113,876,346.05) (110,355,177.18) (224,231,523.23) Total interest expenses (139,910,481.09) (161,689,620.10) (301,600,101.19) EBT (Before pension fund) (439,413,784.34) (497,405,221.07) (936,819,005.41) Pension fund (118,354,559.17) (159,490,345.73) (277,844,904.90) Net profit (Loss) (557,768,343.51) (656,895,566.80) (1,214,663,910.31) Capacity Development Technical Assistance TA 8183 (THA): Source: State Railway of Thailand Financial Information 2012

161 A-84 Table 4: Financial Statement of SRT / Special Express Train (PEX) Commercial Passenger Year 2012 Commercial train by type of train Express train (PEX) Northern line North Eastern line Southern lne Total Total fare box revenue 71,703, ,372, ,293, ,368, Variable cost Operating cost of transportation (56,917,389.33) (139,834,104.79) (165,205,565.03) (361,957,059.15) Maintenance cost (Locomotives) (24,280,759.31) (38,293,179.87) (55,946,379.43) (118,520,318.61) Maintenance cost (Civil and E&M) (15,642,146.51) (29,639,081.79) (36,032,917.08) (81,314,145.38) Total variable costs (96,840,295.15) (207,766,366.45) (257,184,861.54) (561,791,523.14) Gross profit (25,136,652.49) 119,605, ,108, ,577, Fixed cost Operating and maintenance cost (Locomotives) (55,723,137.01) (127,845,885.85) (157,417,250.06) (340,986,272.92) Total Intrastructure cost (39,733,807.28) (73,903,067.62) (87,082,387.70) (200,719,262.60) Total fixed cost (95,456,944.29) (201,748,953.47) (244,499,637.76) (541,705,535.52) Central cost (3,183,617.72) (29,776,422.30) (38,787,815.85) (71,747,855.87) EBITDA (123,777,214.50) (111,919,506.43) (196,179,207.71) (431,875,928.64) Depreciation expenses Operating and maintenance cost (5,594,049.95) (33,458,052.02) (33,496,820.25) (72,548,922.22) Total Intrastructure cost (20,672,685.47) (49,415,029.93) (61,758,887.19) (131,846,602.59) Total depreciation expenses (26,266,735.42) (82,873,081.95) (95,255,707.44) (204,395,524.81) EBIT (150,043,949.92) (194,792,588.38) (291,434,915.15) (636,271,453.45) Interest rate Operating and maintenance cost (6,010,564.39) (25,488,279.92) (34,434,935.28) (65,933,779.59) Total Intrastructure cost (39,478,614.11) (75,656,580.81) (90,445,481.66) (205,580,676.58) Total interest expenses (45,489,178.50) (101,144,860.73) (124,880,416.94) (271,514,456.17) EBT (Before pension fund) (195,533,128.42) (295,937,449.11) (416,315,332.09) (907,785,909.62) Pension fund (45,111,178.88) (101,336,495.19) (124,748,784.89) (271,196,458.96) Net profit (Loss) (240,644,307.30) (397,273,944.30) (541,064,116.98) (1,178,982,368.58) Capacity Development Technical Assistance TA 8183 (THA): Source: State Railway of Thailand Financial Information 2012

162 A-85 Table 5: Financial Statement of SRT / Rapid Train (PIC) Commercial Passenger Year 2012 Commercial train by type of train Intercity train (PIC) Northern line North Eastern line Southern lne Total Total fare box revenue 110,670, ,102, ,292, ,064, Variable cost Operating cost of transportation (107,840,282.32) (152,413,781.73) (113,269,085.44) (373,523,149.49) Maintenance cost (Locomotives) (94,044,661.11) (143,468,696.08) (67,977,631.35) (305,490,988.54) Maintenance cost (Civil and E&M) (22,178,470.13) (34,749,939.00) (21,643,251.45) (78,571,660.58) Total variable costs (224,063,413.56) (330,632,416.81) (202,889,968.24) (757,585,798.61) Gross profit (113,393,246.56) (115,529,856.29) (44,597,833.24) (273,520,936.09) Fixed cost Operating and maintenance cost (Locomotives) (110,716,728.58) (180,444,591.89) (112,775,344.85) (403,936,665.32) Total Intrastructure cost (45,157,278.31) (73,856,797.74) (36,447,657.47) (155,461,733.52) Total fixed cost (155,874,006.89) (254,301,389.63) (149,223,002.32) (559,398,398.84) Central cost (9,731,728.94) (29,925,180.76) (12,978,950.09) (52,635,859.79) EBITDA (278,998,982.39) (399,756,426.68) (206,799,785.65) (885,555,194.72) Depreciation expenses Operating and maintenance cost (10,186,558.60) (24,992,244.77) (13,345,272.67) (48,524,076.04) Total Intrastructure cost (41,398,501.43) (70,841,429.21) (50,474,397.70) (162,714,328.34) Total depreciation expenses (51,585,060.03) (95,833,673.98) (63,819,670.37) (211,238,404.38) EBIT (330,584,042.42) (495,590,100.66) (270,619,456.02) (1,096,793,599.10) Interest rate Operating and maintenance cost (15,493,315.05) (37,720,349.95) (17,942,089.41) (71,155,754.41) Total Intrastructure cost (35,039,671.66) (53,536,639.66) (23,571,181.28) (112,147,492.60) Total interest expenses (50,532,986.71) (91,256,989.61) (41,513,270.69) (183,303,247.01) EBT (Before pension fund) (381,117,029.13) (586,847,090.27) (312,132,726.71) (1,280,096,846.11) Pension fund (83,182,986.35) (136,500,037.93) (80,258,439.00) (299,941,463.28) Net profit (Loss) (464,300,015.48) (723,347,128.20) (392,391,165.71) (1,580,038,309.39) Source: State Railway of Thailand Financial Information 2012 Capacity Development Technical Assistance TA 8183 (THA):

163 A-86 Table 6: Financial Statement of SRT / Rapid Train (PRA) Commercial Passenger 2012 Commercial train by type of train Rapid train (PRA) Northern line North Eastern line Southern lne Total Total fare box revenue 206,472, ,863, ,685, ,384,020, Variable cost Operating cost of transportation (194,699,609.41) (286,473,924.08) (417,666,388.59) (898,839,922.08) Maintenance cost (Locomotives) (88,539,926.73) (99,792,287.17) (132,553,626.09) (320,885,839.99) Maintenance cost (Civil and E&M) (39,794,143.33) (71,260,093.12) (94,523,121.83) (205,577,358.28) Total variable costs (323,033,679.47) (457,526,304.37) (644,743,136.51) (1,425,303,120.35) Gross profit (116,561,665.14) 87,336, (12,057,775.44) (41,282,680.49) Fixed cost Operating and maintenance cost (Locomotives) (193,435,251.79) (295,867,737.96) (397,729,299.17) (887,032,288.92) Total Intrastructure cost (92,063,188.83) (168,325,525.52) (220,691,977.56) (481,080,691.91) Total fixed cost (285,498,440.62) (464,193,263.48) (618,421,276.73) (1,368,112,980.83) Central cost (29,865,513.02) (113,052,835.78) (180,087,221.15) (323,005,569.95) EBITDA (431,925,618.78) (489,909,339.17) (810,566,273.32) (1,732,401,231.27) Depreciation expenses Operating and maintenance cost (19,388,348.37) (28,830,258.43) (53,027,944.35) (101,246,551.15) Total Intrastructure cost (66,638,155.49) (118,567,374.30) (164,022,884.03) (349,228,413.82) Total depreciation expenses (86,026,503.86) (147,397,632.73) (217,050,828.38) (450,474,964.97) EBIT (517,952,122.64) (637,306,971.90) (1,027,617,101.70) (2,182,876,196.24) Interest rate Operating and maintenance cost (32,286,133.82) (86,131,985.75) (134,127,073.95) (252,545,193.52) Total Intrastructure cost (78,201,439.52) (164,417,979.82) (233,063,376.51) (475,682,795.85) Total interest expenses (110,487,573.34) (250,549,965.57) (367,190,450.46) (728,227,989.37) EBT (Before pension fund) (628,439,695.98) (887,856,937.47) (1,394,807,552.16) (2,911,104,185.61) Pension fund (144,639,186.63) (242,738,640.53) (339,618,554.76) (726,996,381.92) Net profit (Loss) (773,078,882.61) (1,130,595,578.00) (1,734,426,106.92) (3,638,100,567.53) Capacity Development Technical Assistance TA 8183 (THA): Source: State Railway of Thailand Financial Information 2012

164 A-87 Table 7: Financial Statement of SRT / Excursion Train (PXC) Commercial Passenger 2012 Commercial train by type of train Excursion Train (PXC) Northern line North Eastern line Eastern line Southern lne Total Total fare box revenue , ,473, ,503, Variable cost Operating cost of transportation - - (23,063.17) (24,140,794.30) (24,163,857.47) Maintenance cost (Locomotives) (210,118.64) - (6,013.82) (5,848,849.25) (6,064,981.71) Maintenance cost (Civil and E&M) - - (2,705.72) (4,808,244.33) (4,810,950.05) Total variable costs (210,118.64) - (31,782.71) (34,797,887.88) (35,039,789.23) Gross profit (210,118.64) - (2,479.71) (20,324,172.97) (20,536,771.32) Fixed cost Operating and maintenance cost (Locomotives) (71,608.70) - (18,411.32) (21,405,790.94) (21,495,810.96) Total Intrastructure cost - - (10,170.62) (23,756,162.28) (23,766,332.90) Total fixed cost (71,608.70) - (28,581.94) (45,161,953.22) (45,262,143.86) Central cost - - (1.68) (287,416.64) (287,418.32) EBITDA (281,727.34) - (31,063.33) (65,773,542.83) (66,086,333.50) Depreciation expenses Operating and maintenance cost - - (1,317.75) (1,028,909.65) (1,030,227.40) Total Intrastructure cost - - (4,871.32) (8,453,568.24) (8,458,439.56) Total depreciation expenses - - (6,189.07) (9,482,477.89) (9,488,666.96) EBIT (281,727.34) - (37,252.40) (75,256,020.72) (75,575,000.46) Interest rate Operating and maintenance cost - - (654.52) (1,138,637.73) (1,139,292.25) Total Intrastructure cost - - (4,902.29) (10,911,656.00) (10,916,558.29) Total interest expenses - - (5,556.81) (12,050,293.73) (12,055,850.54) EBT (Before pension fund) (281,727.34) - (42,809.21) (87,306,314.45) (87,630,851.00) Pension fund (33,453.74) - (13,090.24) (19,107,396.79) (19,153,940.77) Net profit (Loss) (315,181.08) - (55,899.45) (106,413,711.24) (106,784,791.77) Capacity Development Technical Assistance TA 8183 (THA): Source: State Railway of Thailand Financial Information 2012

165 A-88 Table 8: Financial Statement of SRT / Mixed Train (PMX) Public Service Obligation Passenger 2012 PSO train by type of train Mixed Train (PMX) Southern lne Total fare box revenue 2,225, Variable cost Operating cost of transportation (2,013,736.46) Maintenance cost (Locomotives) (3,913,587.54) Maintenance cost (Civil and E&M) (4,285,797.00) Total variable costs (10,213,121.00) Gross profit (7,987,521.41) Fixed cost Operating and maintenance cost (Locomotives) (6,289,621.68) Total Intrastructure cost (7,599,239.00) Total fixed cost (13,888,860.68) Central cost (14,821.18) EBITDA (21,891,203.27) Depreciation expenses Operating and maintenance cost (53,669.74) Total Intrastructure cost (4,869,619.29) Total depreciation expenses (4,923,289.03) EBIT (26,814,492.30) Interest rate Operating and maintenance cost (315,931.64) Total Intrastructure cost (13,636,323.55) Total interest expenses (13,952,255.19) EBT (Before pension fund) (40,766,747.49) Pension fund (7,401,941.95) Net profit (Loss) (48,168,689.44) Capacity Development Technical Assistance TA 8183 (THA): PSO 11,896, Net profit (Loss) after PSO (36,272,282.44) Source: State Railway of Thailand Financial Information 2012

166 A-89 Table 9: Financial Statement of SRT / Bangkok Commuter Train (PSB) Public Service Obligation passenger 2012 PSO train by type of train Bangkok Commuter Train (PSB) Northern line North Eastern line Eastern line Southern lne Mae Klong Total Total fare box revenue 25,252, ,738, ,050, ,136, ,835, ,013, Variable cost Operating cost of transportation (35,241,342.20) (15,059,364.34) (44,524,033.13) (28,506,964.54) (31,080,703.07) (154,412,407.28) Maintenance cost (Locomotives) (18,583,744.04) (7,117,414.76) (20,909,978.56) (12,536,401.13) (25,193,307.67) (84,340,846.16) Maintenance cost (Civil and E&M) (5,392,295.38) (2,402,342.81) (10,319,113.57) (12,614,470.50) (7,473,684.13) (38,201,906.39) Total variable costs (59,217,381.62) (24,579,121.91) (75,753,125.26) (53,657,836.17) (63,747,694.87) (276,955,159.83) Gross profit (33,964,798.62) (16,840,330.91) (47,703,076.14) (45,521,161.17) (36,912,232.87) (180,941,599.71) Fixed cost Operating and maintenance cost (Locomotives) (44,381,130.57) (18,133,526.61) (48,015,622.83) (43,264,532.45) (35,342,280.18) (189,137,092.64) Total Intrastructure cost (13,132,252.49) (5,274,170.54) (24,467,261.29) (27,291,270.85) (11,382,982.52) (81,547,937.69) Total fixed cost (57,513,383.06) (23,407,697.15) (72,482,884.12) (70,555,803.30) (46,725,262.70) (270,685,030.33) Central cost (773,170.84) (98,525.90) (1,092,017.51) (271,185.77) (768,811.25) (3,003,711.27) EBITDA (92,251,352.52) (40,346,553.96) (121,277,977.77) (116,348,150.24) (84,406,306.82) (454,630,341.31) Depreciation expenses Operating and maintenance cost (3,217,144.66) (1,313,477.31) (3,733,011.81) (1,966,651.35) (4,010,316.25) (14,240,601.38) Total Intrastructure cost (10,398,856.59) (4,557,484.75) (15,910,178.79) (19,305,926.69) (13,571,149.97) (63,743,596.79) Total depreciation expenses (13,616,001.25) (5,870,962.06) (19,643,190.60) (21,272,578.04) (17,581,466.22) (77,984,198.17) EBIT (105,867,353.77) (46,217,516.02) (140,921,168.37) (137,620,728.28) (101,987,773.04) (532,614,539.48) Interest rate Operating and maintenance cost (3,167,164.09) (1,050,099.68) (3,682,782.79) (2,132,259.68) (4,023,924.66) (14,056,230.90) Total Intrastructure cost (5,537,872.44) (2,783,831.73) (22,959,268.69) (34,851,946.75) (12,303,569.51) (78,436,489.12) Total interest expenses (8,705,036.53) (3,833,931.41) (26,642,051.48) (36,984,206.43) (16,327,494.17) (92,492,720.02) EBT (Before pension fund) (114,572,390.30) (50,051,447.43) (167,563,219.85) (174,604,934.71) (118,315,267.21) (625,107,259.50) Pension fund (26,977,469.96) (11,076,293.57) (36,244,557.01) (33,346,606.17) (25,756,093.51) (133,401,020.22) Net profit (Loss) (141,549,860.26) (61,127,741.00) (203,807,776.86) (207,951,540.88) (144,071,360.72) (758,508,279.72) Capacity Development Technical Assistance TA 8183 (THA): PSO 174,627, ,527, ,820, ,857, ,865, ,698, Net profit (Loss) after PSO 33,077, (6,599,835.00) 26,012, (137,094,216.88) 141,794, ,190, Source: State Railway of Thailand Financial Information 2012

167 A-90 Table 10: Financial Statement of SRT / Local Commuter Train (PSR) Public Service Obligation Passenger 2012 PSO train by type of train Local Commuter Train (PSR) Northern line North Eastern line Southern line Mae Klong Total Total fare box revenue 19,429, ,905, ,259, ,044, ,640, Variable cost Operating cost of transportation (44,599,835.10) (132,896,663.47) (203,979,057.62) (8,913,724.99) (390,389,281.18) Maintenance cost (Locomotives) (31,964,895.21) (113,662,307.65) (66,601,016.59) (3,479,005.14) (215,707,224.59) Maintenance cost (Civil and E&M) (12,633,846.04) (38,933,572.24) (43,625,927.77) (4,065,626.32) (99,258,972.37) Total variable costs (89,198,576.35) (285,492,543.36) (314,206,001.98) (16,458,356.45) (705,355,478.14) Gross profit (69,768,628.35) (217,586,661.36) (237,946,025.84) (14,414,004.65) (539,715,320.20) Fixed cost Operating and maintenance cost (Locomotives) (81,773,233.18) (216,888,855.17) (213,148,563.57) (9,032,872.12) (520,843,524.04) Total Intrastructure cost (19,366,930.74) (62,759,242.76) (65,034,443.89) (5,440,960.22) (152,601,577.61) Total fixed cost (101,140,163.92) (279,648,097.93) (278,183,007.46) (14,473,832.34) (673,445,101.65) Central cost (982,590.94) (10,056,941.02) (11,808,455.45) (17,451.69) (22,865,439.10) EBITDA (171,891,383.21) (507,291,700.31) (527,937,488.75) (28,905,288.68) (1,236,025,860.95) Depreciation expenses Operating and maintenance cost (5,192,215.40) (18,751,804.07) (3,316,370.46) (590,028.52) (27,850,418.45) Total Intrastructure cost (19,543,922.26) (69,613,747.20) (68,024,378.97) (7,241,930.83) (164,423,979.26) Total depreciation expenses (24,736,137.66) (88,365,551.27) (71,340,749.43) (7,831,959.35) (192,274,397.71) EBIT (196,627,520.87) (595,657,251.58) (599,278,238.18) (36,737,248.03) (1,428,300,258.66) Interest rate Operating and maintenance cost (5,259,050.82) (22,163,541.11) (15,986,065.71) (543,204.91) (43,951,862.55) Total Intrastructure cost (13,669,288.09) (50,178,791.50) (80,532,060.23) (10,386,658.97) (154,766,798.79) Total interest expenses (18,928,338.91) (72,342,332.61) (96,518,125.94) (10,929,863.88) (198,718,661.34) EBT (Before pension fund) (215,555,859.78) (667,999,584.19) (695,796,364.12) (47,667,111.91) (1,627,018,920.00) Pension fund (45,854,861.59) (136,815,886.77) (142,429,567.84) (8,697,326.60) (333,797,642.80) Net profit (Loss) (261,410,721.37) (804,815,470.96) (838,225,931.96) (56,364,438.51) (1,960,816,562.80) Capacity Development Technical Assistance TA 8183 (THA): PSO 91,118, ,148, ,199, ,102, ,568, Net profit (Loss) after PSO (170,292,309.37) (434,667,325.96) (520,026,550.96) (37,262,259.51) (1,162,248,445.80) Source: State Railway of Thailand Financial Information 2012

168 A-91 Table 11: Financial Statement of SRT / Ordinary Train (POR) Public Service Obligation Passenger 2012 PSO train by type of train Ordinary Train (POR) Northern line North Eastern line Southern line Mae Klong Total Total fare box revenue 47,236, ,000, ,873, ,376, ,487, Variable cost Operating cost of transportation (88,397,102.09) (31,222,499.44) (71,485,840.65) (123,396,722.44) (314,502,164.62) Maintenance cost (Locomotives) (37,950,310.35) (11,213,840.79) (39,583,445.74) (47,359,352.00) (136,106,948.88) Maintenance cost (Civil and E&M) (12,965,571.35) (5,694,682.26) (39,464,614.05) (23,601,584.61) (81,726,452.27) Total variable costs (139,312,983.79) (48,131,022.49) (150,533,900.44) (194,357,659.05) (532,335,565.77) Gross profit (92,076,317.85) (27,130,159.07) (105,660,421.18) (133,981,262.35) (358,848,160.45) Fixed cost Operating and maintenance cost (Locomotives) (94,224,559.09) (33,325,761.11) (79,907,455.14) (138,125,074.38) (345,582,849.72) Total Intrastructure cost (20,424,121.17) (8,390,471.47) (59,861,129.02) (35,235,907.24) (123,911,628.90) Total fixed cost (114,648,680.26) (41,716,232.58) (139,768,584.16) (173,360,981.62) (469,494,478.62) Central cost (3,123,200.91) (491,165.48) (3,406,436.20) (5,779,100.74) (12,799,903.33) EBITDA (209,848,199.02) (69,337,557.13) (248,835,441.54) (313,121,344.71) (841,142,542.40) Depreciation expenses Operating and maintenance cost (7,163,172.08) (2,250,688.46) (6,259,957.43) (7,169,937.75) (22,843,755.72) Total Intrastructure cost (24,742,426.84) (9,537,764.71) (48,196,098.24) (44,695,527.77) (127,171,817.56) Total depreciation expenses (31,905,598.92) (11,788,453.17) (54,456,055.67) (51,865,465.52) (150,015,573.28) EBIT (241,753,797.94) (81,126,010.30) (303,291,497.21) (364,986,810.23) (991,158,115.68) Interest rate Operating and maintenance cost (7,360,320.18) (1,931,697.05) (7,524,680.58) (10,533,653.99) (27,350,351.80) Total Intrastructure cost (13,101,096.74) (8,501,779.65) (111,461,057.92) (47,512,723.63) (180,576,657.94) Total interest expenses (20,461,416.92) (10,433,476.70) (118,985,738.50) (58,046,377.62) (207,927,009.74) EBT (Before pension fund) (262,215,214.86) (91,559,487.00) (422,277,235.71) (423,033,187.85) (1,199,085,125.42) Pension fund (57,510,239.25) (20,564,622.66) (79,658,054.91) (87,362,654.50) (245,095,571.32) Net profit (Loss) (319,725,454.11) (112,124,109.66) (501,935,290.62) (510,395,842.35) (1,444,180,696.74) Capacity Development Technical Assistance TA 8183 (THA): PSO 198,942, ,507, ,688, ,964, ,103, Net profit (Loss) after PSO (120,783,068.11) (54,616,874.66) (253,246,492.62) (291,431,096.35) (720,077,531.74) Source: State Railway of Thailand Financial Information 2012

169 A-92 Table 12: Ridership Forecast from 2012 to 2020 Ridership 2012 A 2013 F 2014 F 2015 F 2016 F 2017 F 2018 F 2019 F 2020 F Number of passenger PSO traffic Mixed 155, , , , , , , , ,530 Ordinary 9,027,039 8,277,362 8,277,362 8,688,786 9,244,772 10,093,598 10,981,287 11,692,138 12,200,492 Bangkok commuter 9,965,853 9,866,194 9,866,194 10,101,114 10,379,964 11,153,027 11,955,350 12,661,914 12,239,062 Local commuter 10,080,734 9,818,635 9,818,635 10,243,628 10,808,423 11,745,904 12,723,718 13,521,413 14,037,323 Total PSO passenger 29,229,544 28,090,512 28,090,512 29,247,090 30,773,831 33,417,374 36,169,798 38,426,995 39,028,408 Commercial Express 1,383,337 1,229,452 1,229,452 1,471,705 1,826,458 2,164,446 2,527,232 2,777,185 2,897,932 Intercity (EX) 723, , , , , , , ,207 1,021,781 Intercity (SP-EX) 811, , , , , , ,953 1,058,305 1,104,319 Rapid 7,645,793 7,078,117 7,078,117 7,516,811 8,122,780 8,950,260 9,820,097 10,497,199 10,953,599 Special Express 790, , , , ,999 1,927,478 1,978,212 2,003,451 2,003,451 SP - Express 31,146 31,146 31,146 25,073 15,713 9,992 3, SP - Excursion 193, , , , , , ,549 97, ,123 Total commercial 11,579,048 10,632,241 10,632,241 11,419,754 12,523,127 14,922,608 16,344,141 17,413,485 18,083,431 Total all traffic 40,808,592 38,722,752 38,722,752 40,666,843 43,296,957 48,339,982 52,513,939 55,840,480 57,111,839 Source: Consultants forecast Capacity Development Technical Assistance TA 8183 (THA):

170 A-93 Table 13: Ridership by Route 2012 Northern North Eastern Eastern Southern Mae Klong Total PSO Mixed 155, , Ordinary 2,476, , ,071, ,766, ,027, Bangkok commuter 2,104, , ,789, , ,547, ,965, Local commuter 1,157, ,667, ,009, , ,080, Total PSO passenger 5,738, ,045, ,860, ,792, ,792, ,229, Line percentage of total 20% 21% 20% 27% 13% 100% Commercial Express 195, , , ,383, Intercity (EX) - 723, , Intercity (SP-EX) 278, , , , Rapid 1,552, ,184, ,908, ,645, Special Express 314, , , SP - Express 31, , SP - Excursion , , Total commercial 2,341, ,654, ,581, ,579, Line percentage of total 20% 40% 0% 40% 0% 100% Capacity Development Technical Assistance TA 8183 (THA): Total all traffic 8,080, ,700, ,860, ,374, ,793, ,808, Line percentage of total 20% 26% 14% 30% 9% 100% PSO 71% 56% 100% 63% 100% 72% Commercial 29% 44% 0% 37% 0% 28% Source: State Railway of Thailand information

171 A-94 Table 14: Ridership Forecast by Route 2013 Northern North Eastern Eastern Southern Mae Klong Total PSO Mixed , , Ordinary 1,903, , ,988, ,691, ,277, Bangkok commuter 2,083, , ,761, , ,512, ,866, Local commuter 1,127, ,546, ,905, , ,818, Total PSO passenger 5,114, ,898, ,749, ,577, ,750, ,090, Line percentage of total 17% 20% 20% 26% 13% 96% Commercial Express 141, , , ,229, Intercity (EX) - 691, , Intercity (SP-EX) 213, , , , Rapid 1,186, ,079, ,812, ,078, Special Express 238, , , SP - Express - 31, , SP - Excursion , , Total commercial 1,780, ,467, ,383, ,632, Line percentage of total 15% 39% 0% 38% 0% 92% Capacity Development Technical Assistance TA 8183 (THA): Total all traffic 6,895, ,365, ,749, ,960, ,750, ,722, Line percentage of total 17% 25% 14% 29% 9% 95% PSO 63% 55% 98% 61% 99% 69% Commercial 22% 42% 0% 35% 0% 26% Source: Consultants forecast

172 A-95 Table 15: Ridership Forecast by Route 2014 Northern North Eastern Eastern Southern Mae Klong Total PSO Mixed , , Ordinary 1,903, , ,988, ,691, ,277, Bangkok commuter 2,083, , ,761, , ,512, ,866, Local commuter 1,127, ,546, ,905, , ,818, Total PSO passenger 5,114, ,898, ,749, ,577, ,750, ,090, Line percentage of total 17% 20% 20% 26% 13% 96% Commercial Express 141, , , ,229, Intercity (EX) - 691, , Intercity (SP-EX) 213, , , , Rapid 1,186, ,079, ,812, ,078, Special Express 238, , , SP - Express - 31, , SP - Excursion , , Total commercial 1,780, ,467, ,383, ,632, Line percentage of total 15% 39% 0% 38% 0% 92% Capacity Development Technical Assistance TA 8183 (THA): Total all traffic 6,895, ,365, ,749, ,960, ,750, ,722, Line percentage of total 17% 25% 14% 29% 9% 95% PSO 63% 55% 98% 61% 99% 69% Commercial 22% 42% 0% 35% 0% 26% Source: Consultants forecast

173 A-96 Table 16: Ridership Forecast by Route 2015 Northern North Eastern Eastern Southern Mae Klong Total PSO Mixed , , Ordinary 2,383, , ,956, ,662, ,688, Bangkok commuter 2,133, , ,827, , ,595, ,101, Local commuter 1,176, ,743, ,074, , ,243, Total PSO passenger 5,693, ,103, ,783, ,822, ,844, ,247, Line percentage of total 19% 21% 20% 27% 13% 100% Commercial Express 208, , , ,471, Intercity (EX) - 726, , Intercity (SP-EX) 264, , , , Rapid 1,526, ,130, ,859, ,516, Special Express 298, , , SP - Express - 25, , SP - Excursion , , Total commercial 2,298, ,622, ,497, ,419, Line percentage of total 20% 40% 0% 39% 0% 99% Capacity Development Technical Assistance TA 8183 (THA): Total all traffic 7,991, ,725, ,783, ,320, ,845, ,666, Line percentage of total 20% 26% 14% 30% 9% 100% PSO 70% 57% 99% 63% 101% 72% Commercial 28% 43% 0% 36% 0% 28% Source: Consultants forecast

174 A-97 Table 17: Ridership Forecast by Route 2016 Northern North Eastern Eastern Southern Mae Klong Total PSO Mixed , , Ordinary 2,535, , ,145, ,832, ,244, Bangkok commuter 2,192, , ,905, , ,695, ,379, Local commuter 1,241, ,004, ,299, , ,808, Total PSO passenger 5,969, ,427, ,050, ,368, ,957, ,773, Line percentage of total 20% 22% 21% 29% 14% 105% Commercial Express 258, , , ,826, Intercity (EX) - 773, , Intercity (SP-EX) 284, , , , Rapid 1,649, ,383, ,089, ,122, Special Express 328, , , SP - Express - 15, , SP - Excursion , , Total commercial 2,521, ,061, ,939, ,523, Line percentage of total 22% 44% 0% 43% 0% 108% Capacity Development Technical Assistance TA 8183 (THA): Total all traffic 8,490, ,489, ,050, ,308, ,958, ,296, Line percentage of total 21% 28% 15% 33% 10% 106% PSO 74% 60% 103% 68% 104% 75% Commercial 31% 47% 0% 40% 0% 31% Source: Consultants forecast

175 A-98 Table 18: Ridership Forecast by Route 2017 Northern North Eastern Eastern Southern Mae Klong Total PSO Mixed , , Ordinary 2,768, , ,433, ,092, ,093, Bangkok commuter 2,342, , ,104, , ,009, ,153, Local commuter 1,348, ,437, ,670, , ,745, Total PSO passenger 6,460, ,973, ,538, ,145, ,298, ,417, Line percentage of total 22% 24% 22% 31% 15% 114% Commercial Express 306, , ,026, ,164, Intercity (EX) - 844, , Intercity (SP-EX) 311, , , , Rapid 1,817, ,727, ,404, ,950, Special Express 698, , , ,927, SP - Express - 9, , SP - Excursion , , Total commercial 3,134, ,970, ,816, ,922, Line percentage of total 27% 52% 0% 50% 0% 129% Capacity Development Technical Assistance TA 8183 (THA): Total all traffic 9,594, ,944, ,538, ,962, ,299, ,339, Line percentage of total 24% 32% 16% 37% 11% 118% PSO 80% 65% 112% 74% 113% 82% Commercial 39% 56% 0% 47% 0% 37% Source: Consultants forecast

176 A-99 Table 19: Ridership Forecast by Route 2018 Northern North Eastern Eastern Southern Mae Klong Total PSO Mixed , , Ordinary 3,012, , ,735, ,364, ,981, Bangkok commuter 2,497, , ,309, ,020, ,339, ,955, Local commuter 1,460, ,887, ,057, , ,723, Total PSO passenger 6,969, ,543, ,045, ,952, ,658, ,169, Line percentage of total 24% 26% 24% 34% 16% 124% Commercial Express 357, , ,198, ,527, Intercity (EX) - 919, , Intercity (SP-EX) 340, , , , Rapid 1,994, ,090, ,735, ,820, Special Express 719, , , ,978, SP - Express - 3, , SP - Excursion , , Total commercial 3,412, ,559, ,372, ,344, Line percentage of total 29% 57% 0% 55% 0% 141% Capacity Development Technical Assistance TA 8183 (THA): Total all traffic 10,381, ,102, ,045, ,324, ,658, ,513, Line percentage of total 25% 35% 17% 40% 11% 129% PSO 86% 70% 120% 80% 123% 89% Commercial 42% 61% 0% 51% 0% 40% Source: Consultants forecast

177 A-100 Table 20: Ridership Forecast by Route 2019 Northern North Eastern Eastern Southern Mae Klong Total PSO Mixed , , Ordinary 3,207, , ,977, ,582, ,692, Bangkok commuter 2,633, , ,489, ,076, ,631, ,661, Local commuter 1,551, ,254, ,372, , ,521, Total PSO passenger 7,391, ,009, ,467, ,583, ,974, ,426, Line percentage of total 25% 27% 26% 36% 17% 131% Commercial Express 393, ,066, ,317, ,777, Intercity (EX) - 979, , Intercity (SP-EX) 363, , , ,058, Rapid 2,132, ,372, ,992, ,497, Special Express 729, , , ,003, SP - Express SP - Excursion , , Total commercial 3,617, ,008, ,786, ,413, Line percentage of total 31% 61% 0% 59% 0% 150% Capacity Development Technical Assistance TA 8183 (THA): Total all traffic 11,009, ,018, ,467, ,370, ,974, ,840, Line percentage of total 27% 37% 18% 43% 12% 137% PSO 91% 75% 127% 86% 131% 94% Commercial 45% 66% 0% 55% 0% 43% Source: Consultants forecast

178 A-101 Table 21: Ridership Forecast by Route 2020 Northern North Eastern Eastern Southern Mae Klong Total PSO Mixed , , Ordinary 3,346, , ,150, ,738, ,200, Bangkok commuter 2,747, , ,641, ,123, ,859, ,239, Local commuter 1,618, ,526, ,606, , ,037, Total PSO passenger 7,713, ,357, ,792, ,019, ,145, ,028, Line percentage of total 26% 29% 27% 38% 14% 134% Commercial Express 410, ,113, ,374, ,897, Intercity (EX) - 1,021, ,021, Intercity (SP-EX) 379, , , ,104, Rapid 2,224, ,562, ,166, ,953, Special Express 729, , , ,003, SP - Express SP - Excursion , , Total commercial 3,743, ,298, ,041, ,083, Line percentage of total 32% 63% 0% 61% 0% 156% Capacity Development Technical Assistance TA 8183 (THA): Total all traffic 11,456, ,655, ,792, ,061, ,145, ,111, Line percentage of total 28% 38% 19% 44% 10% 140% PSO 95% 78% 133% 89% 109% 96% Commercial 46% 68% 0% 57% 0% 44% Source: Consultants forecast

179 AIRPORT LINE FINANCIAL EVALUATION APPENDIX 12 Airport Rail Link Financial Performance Analysis Airport rail link ( ARL ) owned by State Railway of Thailand (SRT) and operated by SRT subsidiary SRT Electrified Train or SRTET. It opened on August 23, The line provides as an airport rail link from Suvarnabhumi Airport to Phaya Thai station. ARL services consist of express line and city line. The organizational structure of the ARL is unique in that all revenue is passed through to SRT and the only income kept by ARL is termed remuneration which is a payment from SRT to cover operating and maintenance costs of ARL. Airport Rail Link Asset Structure Airport rail link or ARL asset size is million baht in 2012 in which the ARL operating assets were owned by State Railway of Thailand totaling 5,702 million baht or 26 percent of total SRT assets. Thus, ARL asset structure contains only current assets and the majority of asset is cash and cash equivalents for million in baht in 2012 or 62 percent of total assets. According to ARL cash and cash equivalents, it dramatically decreased from million baht in 2010 to million baht in 2012 or decreased by 39 percent. Figure 1: ARL Asset Structure (million baht) Asset structure Total current assets Total non-current assets Source: Airport Rail Link audited financial statement from Airport Rail Link Capital Structure ARL contains total liabilities totaling million baht in 2012 or 87 percent of total capital structure increased from 2.72 million baht in 2011 in which the total of liabilities are current liabilities. As for ARL shareholders equity, ARL has registered common equity totaling 140 million and retained losses increased from million baht in 2011 to million baht in As a result, ARL shareholders equity dramatically decreased from million baht to million baht in A-102

180 Figure 2: ARL Revenue Structure (million baht) Capital structure Total liabilities Total shareholders' equities Source: Airport Rail Link audited financial statement from 2011 to 2012 Airport Rail Link Revenue Structure ARL revenue structure consists of remuneration and other revenues in which the primary ARL revenue is mainly from remuneration from SRT started from year 2012 totaling million baht and total ARL revenue is million baht in 2012 Figure 3: ARL Revenue Structure (million baht) Revenue structure Remuneration Other Revenues Source: Airport Rail Link audited financial statement from 2011 to 2012 Airport Rail Link Expenses Structure Currently, operating cost of ARL is million baht increased from million baht in Apparently, the remuneration from SRT is not sufficient for ARL to cover full amount of operating expenses. As a result, ARL experienced consecutive losses totaling million baht in A-103

181 Figure 4: ARL Expenses Structure (million baht) Expense structure Operating expense Labor expense Administrative expense Source: Airport Rail Link audited financial statement from 2011 to 2012 As for the operation of ARL, the remuneration from SRT is not sufficient for the operating expenses of ARL. For instance, ARL total operating expense in 2012 was million baht while the revenue from remuneration was only million baht. Thus, ARL operating expense exceeded revenue and generated 97.8 million baht losses. In this case, SRT should allocate sufficient budget for ARL to fully cover the cost of operation as well as operate service effectively. Regarding to this, ARL will become another main source of revenue for SRT to improve its financial status. A-104

182 Airport Rail Link Financial Forecast Analysis Table 1: Airport Rail Link Traffic Forecast and Passenger Revenue to SRT from Year 2012 to Year 2020 Expected revenue to SRT 2012 A 2013 F 2014 F 2015 F 2016 F 2017 F 2018 F 2019 F 2020 F Expected reidership per day 44, , , , , , , , , Total revenue to SRT ( Million baht) , , , , , , , Source: Consultant analysis Table 1: Illustrates expected ridership demand forecast per day of commuter train and express train from year 2012 to year 2020 under the assumption of capacity expansion for Airport Rail Link as well as future extension line. As a result, expected revenues generated by ARL project to SRT are running approximately 1,235 million baht a year. Regarding to this, to improve financial performance of ARL, SRT should increase the amount of remuneration to ARL each year to cover the operating expenses which exceeds the amount of remuneration from SRT each year. In this case, expected subsidy from SRT in addition to remuneration from SRT should be equal to net loss each year of ARL as shown in Table 2 as below. Table 2: Airport Rail Link Financial Forecast from Year 2011 to Year 2020 I ncome statement 2011 A 2012 A 2013 F 2014 F 2015 F 2016 F 2017 F 2018 F 2019 F 2020 F Revenue Remuneration from SRT Other revenues Total revenue Cost of goods sold Operating costs (23.09) (108.86) (109.85) (185.16) (211.10) (212.42) (213.87) (215.46) (217.22) (219.15) Gross profit (22.02) (71.65) (72.30) (121.87) (138.94) (139.81) (140.76) (141.81) (142.96) (144.23) Operating expenses Labor expenses (4.40) (23.01) (23.22) (39.15) (44.63) (44.91) (45.21) (45.55) (45.92) (46.33) Administrative expenses (0.56) (3.14) (3.17) (5.34) (6.09) (6.13) (6.17) (6.21) (6.26) (6.32) Total operating expenses (4.96) (26.15) (26.39) (44.49) (50.72) (51.03) (51.38) (51.77) (52.19) (52.65) Net income (26.98) (97.80) (98.69) (166.35) (189.66) (190.84) (192.14) (193.57) (195.15) (196.88) Source: Airport Rail Link Financial Information and Consultant analysis Table 2 Illustrates financial forecast of Airport Rail Link ( ARL ) financial performance during year 2011 to 2020 based on traffic forecast. Traffic demand forecast is expected to increase under the assumption of capacity expansion for ARL. Remuneration from SRT and other revenues are expected to slightly increase in accordance with upward trend of traffic demand forecasts. By the way, revenue are inadequate to cover for the operating cost each year lead to negative gross profit every years from 2011 to 2020 as shown in the table above. Total revenues are running at the average of approximately 58 million baht per year from 2011 to Additionally, operating cost is expected to increase due to rising personnel demand and fuel cost during this period end up with loss from operations and net income which are running approximately -150 million baht per year. A-105

183 Appendix 1. Income Statement ( ) Unit: million baht Income Statement : Airport Rail Link (ARL) 2011A 2012A Revenues Remuneration Other Revenues Total revenues Cost of goods sold Operating Cost (23.09) (108.86) Gross profit (22.02) (71.65) Operating expense Labor Expense (4.40) (23.01) Administrative Expense (0.56) (3.14) Total operating expenses (4.96) (26.15) Net Income (26.98) (97.80) Source: Airport Rail Link audited financial statement from 2011 to Balance sheet ( ) Unit: million baht Balance sheet : Airport Rail Link (ARL) 2011A 2012A ASSETS Current assets Cash and Cash Equivalents Inventory Other Accounts Receivable SRT Accounts Receivable Other current assets Total current assets Total non-current assets - - Total assets LIABILITIES & EQUITY Current liabilities Accounts Payable Other Accounts Payable SRT Accounta Payable Deposit Accrued Expenses Other Current Liabilities Total current liabilities Total non-current liabilities - - Total liabilities Shareholders' equity Registered Common equity Paid Common Equity Retained loss (26.98) (124.79) Total shareholders' equity Total liabilities and shareholders'equity Source: Airport Rail Link audited financial statement from 2011 to 2012 A-106

184 3. Statement of Cash flow ( ) Unit: million baht Statement of Cashflow : Airport Rail Link (ARL) 2011 A 2012 A Operating activities Net j Income (Loss) p y (26.98) (97.80) operations : Interest received (0.17) (0.95) Accounts receivable (0.03) (0.06) SRT accounts receivable (0.10) (38.89) Inventories - (0.22) Other current assets - (4.03) Accounts payable 0.09 (0.03) Other accounts payable SRT accounts payable 0.25 (0.25) Deposits Accrued expenses Other current liabilities Interest received from bank Net cash provided by operating activities (24.57) (45.20) Financing activities Cash received from equity financing Net cash provided by financing activities Net cash increase (decrease) for period (45.20) Cash and cash equivalent at beginning of period Cash at end of period Source: Airport Rail Link audited financial statement from 2011 to 2012 A-107

185 A-108 APPENDIX 13 HISTORICAL SRT PASSENGER RIDERSHIP ( ) SRT Historical Passenger Ridership Average Annual NUMBER OF PASSENGER Growth Y 2005 Y 2006 Y 2007 Y 2008 Y 2009 Y 2010 Y 2011 Y 2012 PSO TRAINS MIXED 578, , , , , , , , % ORDINARY 10,877,273 10,256,975 10,552,204 10,727,316 10,899,608 10,049,163 10,623,896 9,005, % BANGKOK COMMUTE 10,893,821 10,487,026 10,095,866 11,430,905 11,101,925 10,708,418 11,530,404 10,144, % LOCAL COMMUTER 11,960,282 12,590,655 11,293,840 11,104,631 11,116,337 10,846,378 10,592,023 9,931, % TOTAL PSO 34,310,298 33,888,657 32,055,375 33,491,751 33,309,699 31,770,108 32,945,516 29,229, % COMMERCAIL EXPRESS 2,563,897 2,466,338 2,315,546 2,297,001 1,995,578 1,566,971 1,400,763 1,383, % INTERCITY (EX) 990, , ,075 1,039, , , , , % Capacity Development Technical Assistance TA 8183 (THA): INTERCITY (SP-EX) 997,109 1,003, , , , , , , % RAPID 9,662,362 9,370,804 7,672,519 7,819,296 9,387,915 9,100,914 8,841,274 7,646, % SPECIAL EXPRESS 1,044,526 1,031, , , , , , , % SP-EXPRESS ( TANAL ,894 32,529 34,460 30,552 SP-EXCURSION 102, , , , , , , , % TOTAL COMMERCIAL 15,360,401 14,978,768 12,994,632 13,116,221 14,176,433 13,351,910 12,887,352 11,579, % GRAND TOTAL 49,670,699 48,867,425 45,050,007 46,607,972 47,486,132 45,122,018 45,832,868 40,808, %

186 APPENDIX 14 SAFETY TASK FORCE A-109

187 A-110

188 A-111

189 APPENDIX 15 SAFETY CASE RAILWAY SAFETY CASE The purpose of the safety case is to demonstrate that all risks have been identified and managed, with suitable risk control measures in place to ensure that they are reduced to a level which is as low as reasonably practicable, the ALARP test, which is standard across high-risk industries. Key Elements Details of the safety case duty holder and a description of its operation. Details of risk assessments, including methodology, results and the implementation of risk control measures. Description of the health and safety management system and a demonstration of its effectiveness, including provisions for audit and review. Description of the technical specifications for plant and equipment. Description of the operational and maintenance procedures. Particulars of arrangements for records of training and competence of staff. Arrangements for cooperating with other railway bodies. Arrangements for incident investigation and emergency response, including evacuation of stations and trains. Safety case development plan. The safety case should be reviewed on a regular basis every three years ALARP As low as reasonably Practicable A concept involving weighing a risk against the trouble, time and money needed to control it. A-112

190 APPENDIX 16 Airport Rail Link Case Study Introduction AIRPORT RAIL LINE DESCRIPTION The key airport link contract was signed in January 2005, and construction began in July The line was built by a consortium of B Grimm, STECON and Siemens. The estimated cost of the project was 25.9 billion baht. After long delays in construction and several test runs, Suvarnabhumi Airport's Link began commercial services Monday 23rd August The link offers two different services, a non stop express service to the airport which was the main reason for being constructed and a commuter line service covering some eight stops along the route. The design separated the two to a great extent at the Makkasan and Suvarnabhumi stations with separate entrances, platforms and track layouts and a key element of the project was the establishment of Makkasan as the Bangkok City Air Terminal (BCAT) offering passengers the ability to check in their baggage at the station for their flights. The project included an expensive automated baggage handling system, check in desks at Makkasan station and an additional car for baggage on the express trains (making them four car not three). The line alignment covers areas of the city that are undergoing considerable growth and development and the so called City line commuter service is a tremendous success. Indeed management wants to increase the number of trains to take advantage of this growth, The City Line runs every 15 minutes from 6am to midnight. The trains have a maximum speed of 160 kilometres per hour and take 30 minutes from Phaya Thai to Suvarnabhumi. Passengers using the City Line pay a fare ranging from 15 baht to 45 baht, depending on the distance travelled. The service has a fleet of 5 three car trains. The Express Service is only a 15-minute non-stop journey between the City Terminal and the airport with a fare at Bt 90 per trip. There are total of 4 train sets required to provide these Express Services however one set has been out of service for the past several months so only three sets are now utilized, resulting in a reduction in frequency. Each train set has 3 passenger cars with a total of 170 seats, and 1 baggage car. Express service is provided from to everyday Unfortunately the Express service has not worked out as planned and suffers from many problems. The project depended heavily on land owned by SRT being used and Makkasan is a very difficult place to get to and from. The area is very congested and appears to be one of those areas in Bangkok that Taxi drivers do not like to go to! It is understood that a link to the MRT station (Phetchaburi) was originally planned to be via a tunnel but this has not happened and until August this year passengers had to struggle along a road in difficult conditions (poor access, inadequate signage, and stair access). After three years there is now a skybridge linking Petchaburi station with Makkasan but access and signage are still not ideal! For example, there are no signs in the arrival areas of A-113

191 Petchaburi station indicating the direction to the Airport Line at Makkasan. Arriving on the MRT at Petchaburi station the passenger must know to move in the direction of the Don Bosco School exit; only upon reaching this exit, there is a small sign indicating the direction of the Airport Link rail line at Makkasan station. Upon reaching the Makkasan station, there are signs to the city line and airport express. About halfway along the length of the station, is the entrance to the city line and signs for the airport express beyond this location. However, upon reaching the far end of the station, the airport express signs disappear. Only after asking some of the cleaning staff, passengers are told to follow the directions to the China High Speed Rail Exhibit ; beyond this exhibit is the airport express entrance. Moving in the reverse direction, upon arriving on the airport express train, there are no signs to the MRT Petchaburi station. Passengers must ask station staff to discover that they must first go from the third floor to the first floor, walk again the length of the station, and up again to the third floor to find the (unmarked) entrance to the sky bridge. Clearly, there needs to be more visible signage at both the Makkasan and Petchaburi stations to make it convenient for passengers to make this connection. Frequency is also a problem with the trains only departing every 45 minutes, many tourists in fact go on the City line which is more frequent and cheaper. The journey time into Bangkok does not appear to be a problem. One whole train set out of action does not help although SRTET performance statistics fail to disclose this loss of 25% of capacity. The company has now put on an express between the airport and Phaya Thai which takes some 19 minutes. This service is only however offered every 60 minutes and although it operates from 06:30 to 23:30 from the airport it starts from Phaya Thai only at 10:00 am (to midnight). Other system inflexibilities also hinder changes i.e. no pass through on the express line platforms in Makkasan through to Phaya Thai, trains can only go back to Suvarnabhumi. Changing the line layout would be very expensive. This situation prevents the running of an express between Phaya Thai and Suvarnabhumi with an intermediate stop at Makkasan. A-114

192 Figure 1: ARL Map Source: SRTET Website There is an additional express service (hourly) from Suvarnabhumi. and Phaya Thai (06:30 to 23:30) and from Phaya Thai to the airport (10:00 to midnight). Ridership Projections & Actual Performance A brief examination of the ridership projections contained in the original Feasibility study & business plan 20 puts the situation into perspective. Although ridership as a whole is currently above 50,000 a day and the level of revenue appears to cover most of SRTs costs the performance is well below what was planned. 20 a). Study, Investigation, Review and Updating of the Feasibility Study of Suvarnabhumi Airport Rail Link, March 2004, AEC / TEC /PCI, b). Business Plan : 20 October 2008, Airport Link Company Planning Office State Railway of Thailand A-115

193 Figure 2: City Line Passenger Numbers Compared to Initial Forecasts Source: ARL/Consultants The business plan clearly took a more realistic view of what was achievable but performance to date is still well below plan. Figure 3: Express Line Passenger Numbers Compared to Initial Forecasts Source: ARL/Consultants Project Governance and Performance The business model chosen by SRT for the ARL does not appear to be working. The Airport Link is set up with SRT owning the assets and its subsidiary SRTET operating and maintaining the service. There is a management contract between the two parties with SRT in effect hiring SRTET to perform O&M duties for SRT. Initially outside consultants were also used to establish the link, the last of such contracts finished in September of this year (contract with Hamburg Consult for over US$6m to provide O&M services and train the local team to operate the system). The set up is not however fully arms length with SRT retains considerable control over SRTET particularly in respect of expenditure and SRT takes all revenue from SRTET. SRT A-116

194 controls many of the outsourced contracts i.e. cleaning, security, etc. and provides spare part procurement for SRTETs maintenance operations. It is understood that this arrangement does not work very well and leads to difficulties and delays that impact on the successful operation of the ARL. The Consultant has had little time to examine the operation in detail but understands that for example the use of SRTs procurement dept. for parts together with SRT budget constraints have delayed the provision of spare parts and meant that the broken down train set rather than be repaired has been cannibalized for spare parts and all the trains are in desperate need of overhaul. A maintenance spares pack from Siemens was taken out of the original contract but intended to be procured as part of SRTETs working capital. This did not happen and has limited SRTETs access to much needed spares. After expensive training from the foreign consultants SRT are losing a number of key managers and staff apparently as a reaction to the working environment. From the start the media have been very critical of the project. 21 When visiting the locations and riding the services the consultant s team were certainly surprised about the poor access for customers with baggage and the generally poor signage directing passengers. The impression given to a foreign traveller was very confusing about what service was available, when, how much and where to go? This is particularly surprising bearing in mind the high cost of foreign consulting support provided for O&M over the project life (see further examples below). Accounting Systems, Financial and Management Information The following schematic illustrates how revenues & costs are arranged between SRT and SRTET Figure 4: EAccounting Arrangements between SRT & SRTET Source: ARL/Consultants 21 Bangkok Post and various blog sites, i.e. A-117

195 Reporting 1. SRTET SRTET account for mainly salary costs (Traffic & administration) and their income is the management fee received from SRT. Table 1: SRTET Financial Statements Income Statement ( ) (million baht) Income Statement : Airport Rail Link (ARL) 2011A 2012A Revenues Remuneration Other Revenues Total revenues Cost of goods sold Operating Cost (23.09) (108.86) Gross profit (22.02) (71.65) Operating expense Labor Expense (4.40) (23.01) Administrative Expense (0.56) (3.14) Total operating expenses (4.96) (26.15) Net Income (26.98) (97.80) Balance Sheet ( ) (million baht) Balance sheet : Airport Rail Link (ARL) 2011A 2012A ASSETS Current assets Cash and Cash Equivalents Inventory Other Accounts Receivable SRT Accounts Receivable Other current assets Total current assets Total non-current assets - - Total assets LIABILITIES & EQUITY Current liabilities Accounts Payable Other Accounts Payable SRT Accounta Payable Deposit Accrued Expenses Other Current Liabilities Total current liabilities Total non-current liabilities - - Total liabilities Shareholders' equity Registered Common equity Paid Common Equity Retained loss (26.98) (124.79) Total shareholders' equity Total liabilities and shareholders'equity Source: Airport Rail Link audited financial statement from 2011 to 2012 A-118

196 2. SRT SRT account for traffic revenue and the remaining costs of the ARL including the sizeable contracts for foreign management assistance during set up and initial operation. These are accounted for in the Metro System Management Unit of the Infrastructure II department. O&M accounts are produced by SRTET but there are not any full financial statements (balance sheet, income statement and cash flow) encompassing the entire ARL operation. During discussions by the Consultant with PDMO, it was revealed that such financial statements have been requested from SRT two years ago by PDMO, but with no result. The following data was provided by the ADB FMIS project team for information. Table 2: Accounting Data SRT & SRTET (million baht) Metro office SRTET Combined Revenue 477, ,614 Management fee from SRT 37,213 Other 1,037 1, ,651 Expense items: Wages 2,948 Traffic management 108, ,861 admin employees 23,014 23,014 management 3,140 6,742 Staff welfare 654 Electricity 163, ,851 Water 3,957 Phone 82 4,039 Repairing car and sign fuel 64 Appliance repair Other expense 23,608 Contracts 194, ,801 SRTET 37,213 Other stationery expense 18,602 42,210 Input vat 28,154 Adjustments * (65,176) Totals Expenses 474,446 69, ,285 Source: SRT FMIS Consultants * Adjustments : elimination of double counting ( i.e. Management fee 2x 37,213) In line with comments made during visits these cost appear rather light on maintenance (track, equipment, rolling stock, etc) and do not include depreciation and interest. One would expect the following type of statement and content for the whole ARL operation: A-119

197 Table 3: ARL Financial Reporting Statements BALANCE SHEET SRT SRTET CONSOLIDATED FIXED ASSETS LAND TRACK SYSTEMS BUILDINGS ROLLING STOCK TOTAL FIXED ASSETS STOCKS DEBTORS CASH OTHER TOTAL CURRENT TOTAL ASSETS EQUITY RESERVES LOANS CREDITORS TOTAL LIABILITIES Source: Consultants PROFIT AND LOSS ACCOUNT SRT SRTET CONSOLIDATED REVENUE TICKETS RENTALS OTHER TOTAL REVENUE COSTS SALARY ELECTRICITY WATER TRANSPORTATION CLEANING SECURITY TICKETING CONSUMABLES INFRASTRUCTURE MAINTENANCE BUILDING MAINTENANCE TRAIN MAINTENANCE OTHER TOTAL COSTS PROFIT/(LOSS) INTEREST SRTET have a complete SAP system and are capable of producing accounting and financial information for the whole ARL. Indeed they do account for some SRT costs in a separate ledger, which is then printed out for SRT to manually input into their system. In addition SAP has a complete procurement system but order requests are printed out and then handled manually by SRTs procurement dept. A-120

198 Other Examination of the original feasibility study and business plan also suggests that the development of station facilities and the earning of non farebox revenues is well below what is planned. This under performance may be related to the slow progress in developing the Bangkok City Air Terminal (BCAT) at Makkassan station. It is the consultant s view that more can be done on advertising in the stations and the trains. ARLs urban transport competitors BTS and MRT are good examples to follow. The car park at Makkasan is free and clearly a revenue earning opportunity. Phaya Thai Station Access A skywalk linking the Airport Rail Link's Makkasan station to the MRT underground's Phetchaburi station was opened 8 th August years after opening! SRTET s Website SRTET Website 22 says Makkasan has parking for 300 cars but no parking is shown on site map or directions how to get there etc? Conclusion Although elements of ARL can be considered successful is a totally different operation in practice that for which it was designed and funded by the government. The consultant recommends that a post investment appraisal be conducted comparing the ARL with the original project and estimated economic and social benefits. In addition it is suggested that a complete business unit is created for the ARL with the ARL CEO responsible for the whole operation, full accounting and funding (Revenue and costs) responsibility. Complete accounts can be run on the SAP system and they can also do their own maintenance procurement. SRT will still own the company and have representation on the board but that is all, SRTET will be responsible for all operations including infrastructure. All balance sheet accounts would be transferred across A-121

199 The consultant considers that the SRTET management if in total control of their business will rapidly rectify many of the minor problems raised earlier particularly regarding signage, access, etc. It is not clear whether or not the ARL will require funding support but if applicable separate PSO arrangements can be considered with the government. It is further recommended that a study be carried out on the future of the ARL. New trains are urgently needed for the City line but what should be done re the airport expresses? Makassan is a limitation and the original track layout limits development options. Transport between the City and the airport is still a priority but is a BCAT in Makkasan a realistic option? A-122

200 APPENDIX 17 PROJECT MANAGEMENT ORGANIZATION A-123

201 A-124

202 A-125

203 A-126

204 A-127

205 A-128

206 A-129

207 A-130

208 A-131

209 APPENDIX 18 VIEWS OF STATIONS INCLUDED IN SURVEYS Hua Lamphong Station A-132

210 Chiang Mai Station A-133

211 Nakhon Ratchasima (Khorat) station A-134

212 Surat Thani station A-135

213 SAFETY CONCERNS AND PASSENGER INCONVENIENCES APPENDIX 19 Live Electrical Box Uncovered at Hua Lamphong Station Switch Machine Mounted on Rotten Sleepers A-136

214 Faulty Switch Machine Cable Leaking Water Tap A-137

215 APPENDIX 20 STATION VISITS AND LAYOUTS Krungthep (Hualampong) Station Item Observations Staffing 154 officers & 24 security guards Condition of buildings/facilities Old repainted buildings, neatly organized. Seats for passengers are provided both within station area & platform area. Right side of lower & upper floor area are office area. Foods & shops are available within station area. Volume data trains, passengers trains daily comprises of: Special Express, Express, Special Express Diesel Rail Car(DRC), Express DRC, DRC, Rapid, Commuter and Ordinary trains Number of passengers : 9,133,522 in 2012 Revenue : 1,365,070,145 baht Passenger access (public areas, Station situates on main road and easy for access. platforms) Parking lots for private cars are available. Public transport services (bus, taxi) are also available. There are 14 platforms of 400 m. long and 6 m. wide each Disabled access & assistance offered There is ramp for wheel chair from parking lot to station area. And wheel chair can be lifted up into train by special equipment fitted on the train. Signage including for international Both Thai & English language signs are provided as well travelers as information counter for query Communications systems Handheld radio & Telephone for communication announcements, displays between staffs, Public relations counter for information of train scheduling, Sign boards for general information, Announcement for incoming & outgoing trains and other important information Help points, Maps, Timetable information Available at Public Relations office & counter Interchange with bus, taxi & other rail Interchange with bus, taxi and MRT within station area Health & safety Fairly clean (heavily used) Uniformed & non-uniformed policemen are at station area for passenger safety Fire & first aid Fire extinguisher (wall type) / office for general medicine / nurse /blood test Emergency Planning evacuation sites There is annual rehearsal for emergency according to SRT Regulations Passenger facilities toilets, food & All are available within station area beverage, waiting rooms, porters Ticketing provision & organisation 20 Ticket booths for traveling day and advanced booking office, 24-hour service Security including cash management There is a safe for keeping fare revenue at the station prior to bank deposit Appearance of staff, uniforms etc. Service minded staffs, clean uniforms Visibility A-138

216 Item Staffing Condition of buildings/facilities Volume data trains, passengers Passenger access (public areas, platforms) Disabled access & assistance offered Signage including for international travellers Communications systems announcements, displays Help points, Maps, Timetable information Interchange with bus, taxi & other rail Health & safety Fire & first aid Emergency Planning evacuation sites Passenger facilities toilets, food & beverage, waiting rooms, porters Ticketing provision & organisation Security including cash management Appearance of staff, uniforms etc. Visibility Nakhon Ratchasima Station Observations 32 officers & 6 security guards Old repainted buildings, neatly organized. Seats for passengers are provided within platform area. Upper floor area are office for administration level and doctor s room. 26 trains daily comprises of: - 4 Express trains - 10 Rapid trains - 12 Local trains (free) Number of passengers : 636,010 in 2012 (mostly 3rd class passengers) Revenue : 29,669,505 baht Station situates on main road and easy for access. Parking lots for private cars are available. Public transport service is also available. There are 3 platforms of 400 m. long and 6 m. wide each. There is ramp for wheel chair from parking lot to station area. And wheel chair can be lifted up into train by special equipment fitted on the train. Both Thai & English language signs are provided Handheld radio & Telephone for communication between staffs, Public relations counter for information of train scheduling, Sign boards for general information, Announcement for incoming & outgoing trains and other important information Available at Public Relations office & counter Interchange with bus, minibus and taxi in front of station area Quite clean since there is a contest which giving award to station that brings passenger safety into consideration Fire extinguisher (wall type) / office for general medicine / dentist There is annual rehearsal for emergency according to SRT Regulations All are available within station area 4 Ticket booths for traveling day and advanced booking office, 24-hour service There is a safe for keeping fare revenue at the station prior to bank deposit Service minded staffs, clean uniforms A-139

217 Item Staffing Condition of building / facilities Volume data train Passenger access (public areas, platforms) Disabled access & assistance offered Signage including for international travelers Communications systemsannouncements, displays Help points, Maps, Timetable information Interchange with bus, taxi & other rail Health & Safety Fire & First Aid Emergency Planning Evaluation sites Passenger facilities toilets, food & beverage, waiting rooms, porters Ticketing Provision & Organization Security including cash management Appearance of staff, uniforms etc, Visibility Suratthani Station Observations 63 officers & 14 security guards Old repaint buildings Seats for passenger are provided within platform area 32 trains daily: - 14 Express trains - 10 Rapid trains - 8 Local trains (Free) 392,161 passengers/year Station situates on main road and easy for access. Parking lots for private cars are available. There are 3 platforms of 400 m. long and 6 m. wide each. There is ramp for wheel chair from parking lot to station area. Both Thai & English language signs Handheld radio & Telephone for communication between staffs. Public relations counter for information of train scheduling, sign boards for general information, announcement for incoming & outgoing trains and other important information Available at public relation office & counter Interchange with bus, minibus and taxi in front of station area Quite clean since there is a contest which giving award to station that brings passenger safety into consideration Fire extinguisher (wall type). No office for general medicine in station area There is annual rehearsal for emergency according to SRT regulations All are available within station area 4 Ticket booths for traveling day and advanced booking office, 24-hour service There is safe for keeping fare revenue at the station prior to bank deposit Service mind staffs, clean uniforms A-140

218 Chiang Mai Station Item Observations Staffing 36 officers & 6 security guards Condition of buildings/facilities Old repaint buildings, neatly organized. Seats for passenger are provided within platform area Volume data trains, passengers 12 trains daily: - 4 Special Express trains - 2 Express trains - 4 Rapid trains - 2 Local trains 375,025 passenger/year Passenger access (public areas, Station situates on main road and easy for access. platforms) Parking lots for private cars are available. There is 1 platform of 400 m. long and 10 m. wide. Disabled access & assistance offered There is ramp for wheel chair from parking lot to station area. And wheel chair can be lifted up into train by special equipment fitted on the train. Signage including for international Both Thai & English language signs are provided as well travellers as information counter for query Communications systems Handheld radio & Telephone for communication announcements, displays between staffs, Public relations counter for information of train scheduling, Sign boards for general information, Announcement for incoming & outgoing trains and other important information Help points, Maps, Timetable information Available at Public Relations office & counter Interchange with bus, taxi & other rail Interchange with minibus and taxi within station area Health & safety Quite clean since there is a contest which giving award to station that brings passenger safety into consideration Fire & first aid Fire extinguisher (wall type) / First Aid Box Emergency Planning evacuation sites There is annual rehearsal for emergency according to SRT regulations Passenger facilities toilets, food & All are available within station area beverage, waiting rooms, porters Ticketing provision & organisation 4 Ticket booths for traveling day and advanced booking office, 24-hour service Security including cash management There is safe for keeping fare revenue at the station prior to bank deposit Appearance of staff, uniforms etc. Service mind staffs, clean uniforms Visibility A-141

219 A-142

220 A-143

221 APPENDIX 21 STATIONS FINANCIAL INFORMATION Railway Station Operating Expenses Krungthep (Hualampong) Year Operating Expenses Electricity Water Supply Telephone Others Total ,885,450 1,012,754 54,032 n.a. 7,954, ,172,344 1,044,077 55,134 n.a. 8,273, ,549,836 1,065,385 48,792 n.a. 8,664,013 Remarks: Electricity : 85% for building area and 15% for rental area. unit: Baht Chiangmai Year Operating Expenses Electricity Water Supply Telephone Others Total ,377, ,444 19,507 79,085 2,243, ,489, ,016 16,894 63,268 2,285, ,756, ,101 19,602 66,598 2,661,635 Nakorn Ratcha Sima (Korat) Year Operating Expenses Electricity Water Supply Telephone Others Total , ,958 2,844 77,864 1,729, ,017, ,962 2,994 97,330 1,717, ,211, ,776 3,403 92,696 1,993,876 Surat Thani Year Operating Expenses Electricity Water Supply Telephone Others Total ,229, ,188 11,521 86,332 1,532, ,064, ,272 11, ,916 1,437,119 A-144

222 A-145 Number of Passenger and Revenue Fiscal year 2010 Station Code 1st Class 2nd Class 3rd Class Total 1st Class 2nd Class 3rd Class Total Special Expres Express Rapid Sleeper A/C Car (Baht) 1001 Krungthep (Hualampong) 49,555 1,115,862 6,282,050 7,447,467 25,880, ,330, ,192, ,403, ,218, ,760, ,986, ,399, ,013,200 1,356,782, Nakorn Ratcha Sima 89 16, , ,301 12, ,526, ,417, ,956, ,770 1,426,200 1,978, ,910 1,023,110 32,513, Chiangmai 12, , , ,383 6,983, ,123, ,534, ,641, ,323,210 8,201,310 27,044,910 31,070,720 31,859, ,141, Surat Thani 8, , , ,443 4,096, ,080, ,093, ,271, ,084,670 10,443,680 8,576,740 15,118,040 16,465, ,959, Number of Passenger and Revenue Fiscal year 2011 Station Station Station Number of Passenger Fares Fees Number of Passenger Fares Fees Code 1st Class 2nd Class 3rd Class Total 1st Class 2nd Class 3rd Class Total Special Expres Express Rapid Sleeper A/C Car (Baht) 1001 Krungthep (Hualampong) 49,434 1,038,154 9,390,398 10,477,986 25,153, ,386, ,723, ,264, ,651, ,894, ########### ########### ########### 1,332,673, Nakorn Ratcha Sima 81 16, , ,723 11, ,520, ,106, ,639, ,005, ,665, ,039, , ,036, ,536, Chiangmai 11, , , ,780 6,464, ,918, ,915, ,298, ,406, ,272, ,336, ,623, ,726, ,663, Surat Thani 8, , , ,627 4,290, ,933, ,884, ,108, ,900, ,413, ,131, ,397, ,772, ,724,711 Revenue Revenue Capacity Development Technical Assistance TA 8183 (THA): Number of Passenger and Revenue Fiscal year 2012 Station Station Number of Passenger Fares Fees Code 1st Class 2nd Class 3rd Class Total 1st Class 2nd Class 3rd Class Total Special Expres Express Rapid Sleeper A/C Car (Baht) 1001 Krungthep (Hualampong) 50,683 1,146,526 7,936,313 9,133,522 25,915, ,854, ,347, ,117, ,888, ,226, ,386, ,311, ,139,745 1,365,070, Nakorn Ratcha Sima 84 14, , ,010 10, ,347, ,635, ,993, ,910 1,439,110 2,287, , ,167 29,669, Chiangmai 12, , , ,025 7,080, ,149, ,269, ,499, ,681,782 9,218,990 26,076,552 32,210,152 33,610, ,296, Surat Thani 8, , , ,161 4,331, ,660, ,182, ,174, ,633,560 10,872,655 10,330,717 16,158,522 17,598, ,768,080 Revenue

223 Station Labor Costs The following are the station staffing and costs at the four stations evaluated. Station Number of Staff Annual Labor Cost (million baht) Hua Lamphong Nakhon Rachasima (Khorat) Chiang Mai Surat Thani Source: SRT A-146

224 PASSENGER SURVEY QUESTIONNAIRE AND SURVEY RESULTS APPENDIX 22 A-147

225 A-148

226 SRT SELECTED STATIONS REVIEW PASSENGER SURVEY QUESTIONNAIRE SUMMARY OF RESULTS SURVEY RESPONSES: THREE STATIONS STATION RESPONSES % BANGKOK NAKORN RATSIMA SURAT THANEE TOTAL QUESTIONS: PART 1 GENERAL INFORMATION Q1 NATIONALITY: 1. THAI 2. OTHER SEX: 1. MALE 2 OTHER STATION MALE % FEMALE % NOT % ANSWERED BANGKOK NAKORN RATSIMA SURAT THANEE TOTAL NATIONALITY STATION THAI % OTHER % NOT % ANSWERED BANGKOK NAKORN RATSIMA SURAT THANEE TOTAL foreigners were surveyed over all three locations making up 11% of the total sample. A-149

227 Q2 STATION < 15,000 BAHT % 15,001 35,000 % 35, ,000 % >100,000 % NO ANSWER BANGKOK NAKORN RATSIMA SURAT THANEE TOTAL % 150 respondents (30%) declined to provide salary information. Of the 350 who did respond the majority (302 60%) earned less than 35,000 baht a month (US$1200). A-150

228 Q3 Station Total 1 Bangkok 2 Nakorn Ratchasima 3 Surat Thani Source of information about this service Internet Newspaper/Magazi ne Friend/Family Others not specified Total % 10% 42% 12% 12% % 12% 30% 10% 18% % 7% 70% 1% 4% % 5% 49% 29% 0% 25% of total respondents used the internet to find out about railway services. This increased to 29% with the Bangkok sample. The largest source of information however was from friends and family (42%). Q4 Station Total 1 Bangkok 2 Nakorn Ratchasima 3 Surat Thani Purchase the ticket at this station Yes No not specified Total % 26% 10% % 30% 16% % 8% 3% % 33% 0% Station Total 1 Bangkok 2 Nakorn Ratchasima 3 Surat Thani Other Places of purchase Internet Travel Agent/Reseller At the station before Others Tota l % 22% 50% 11% % 29% 44% 10% % 25% 75% 0% % 3% 61% 15% In total 63% of those surveyed bought their ticket at the station on the day of the survey. Of those that did not buy their ticket at the station on that day some 50% bought it at the station previously. These responses show the importance of the ticket offices to SRT station operations particularly outside Bangkok. A-151

229 PART 2 OPINIONS ABOUT THE SERVICE PREFERENCE SCALING Q5 96% of total responses considered buying a ticket as moderately easy to very good (45% good & 20% v good). Considering the results from Q4 the ease of buying tickets at the station is important for customers as it still remains their primary method of acquiring a ticket. Responses by Station Bangkok Nakornratsima Suratthanee Total % Very bad % Bad % Moderate % Good % Very Good % No answer % Total % Q6 The majority of respondents (97%) considered SRT services as moderate to very good value for money (35% responding as moderate, 46% Good and 16% very good). It is assumed that the high use of free tickets by travellers (Q15) had a positive influence on the responses to this question. Responses by Station Bangkok Nakornratsima Suratthanee Total % Very bad % Bad % Moderate % Good % Very Good % No answer % Total % A-152

230 Q7 Overall some 35% of respondents considered punctuality to be bad to very bad (17% Very Bad, 18% Bad). The majority (59%) however considered the situation to be moderate to good (32% Moderate, 27% Good). Bangkok however displays a more positive attitude with only 18% responding bad to very bad and over 80% considering punctuality moderate to very good. The difference may be explained by the fact that Bangkok is a terminus station and trains departing tend to leave on time whereas trains arriving from elsewhere tend to be late. It is possible that the survey respondents tended to be departing customers rather than those that had just arrived. Bangkok Nakornratsima Suratthanee Total % Very bad % Bad % Moderate % Good % Very Good % No answer % Total % A-153

231 Q8 18% of total respondents tend to consider station comfort bad to very bad with 40% considering comfort moderate and 42% good to very good. Nakornratsima goes against the general trend with some 54% of respondents considering comfort bad to very bad and only 11% considering station comfort good. Bangkok Nakornratsima Suratthanee Total % Very bad % Bad % Moderate % Good % Very Good % No answer % Total % Q9 Overall a positive response with some 43% of responses considering information and announcements at the stations to be moderate and 35% Good. Nakornratsima goes against the general trend with some 34% of respondents considering information and announcements bad to very bad. Bangkok Nakornratsima Suratthanee Total % Very bad % Bad % Moderate % Good % Very Good % No answer % Total % A-154

232 Q10 A positive response with some 84% of responses considering security at the stations to be moderate to very good. Only 14% considered security to be bad to very bad although at Nakornratsima some 47% of respondents considered security to be bad to very bad Bangkok Nakornratsima Suratthanee Total % Very bad % Bad % Moderate % Good % Very Good % No answer % Total % Q11 Comfort of connection overall was considered by the majority (89%) to be moderate to very good. Only Nakornratsima goes against the overall trend with 28% of respondents considering the comfort of connections to be bad to very bad. A-155

233 Bangkok Nakornratsima Suratthanee Total % Very bad % Bad % Moderate % Good % Very Good % No answer % Total % Q12 Almost a quarter of the total respondents considered the overall appearance and cleanliness of the stations to be bad to very bad. In Nakornratsima this increased to almost 60% of respondents (59%) who considered the overall appearance and cleanliness of the stations to be bad to very bad. Bangkok Nakornratsima Suratthanee Total % Very bad % Bad % Moderate % Good % Very Good % No answer % Total % A-156

234 Q13 Overall the respondents were positive about the station facilities in terms of shops and cafes, etc. 45% expressed a moderate preference and 37% good to very good. Only 16% considered them bad to very bad, although at Nakornratsima 35% considered them bad to very bad. Bangkok Nakornratsima Suratthanee Total % Very bad % Bad % Moderate % Good % Very Good % No answer % Total % Q14 91% of responses consider the variety of services to be moderate to very good. 20% of Nakornratsima respondents however consider the variety of services to be bad. Bangkok Nakornratsima Suratthanee Total % Very bad % Bad % Moderate % Good % Very Good % No answer % Total % A-157

235 Q15 Some 75% of respondents had taken advantage of the Government s free fare policy. Station Total 1 Bangkok 2 Nakorn Ratchasima 3 Surat Thani Ever used the SRT free train 1 Yes 2 No not specify Total % 23% 2% % 23% 4% % 8% 0% % 40% 0% 25% of those that used the free train did not answer the second part of the question, but the 75% that did considered the free trains to be generally moderate to good in terms of quality and comfort. A-158

236 Q16 Open questions are always difficult in surveys and overall at all three stations only 25% of respondents answered this question. All 124 answered with one suggestion with 51 giving two, 17 three and 3 four suggestions.only 9% of the respondents at Suratthanee answered the question. Respondents One comment 2 comments 3 Comments 4 Comments Total comments Bangkok % of sample 21 Nakornratsima % of sample 53 Suratthanee % of sample 9 Totals % of sample 25 Key themes raised by these respondents were mainly to do with timeliness of trains, cleanliness and appearance of the stations and the toilet facilities (as follows). Key areas for improvement stated Themes Bangkok Nakornratsima Suratthanee Total % of total responses Timeliness Punctuality Delay Station appearance Cleanliness Smell Facilities Toilets Safety Total comments % Of responses REPONSES FROM FOREIGNERS VERSUS OVERALL RESPONSE A-159

237 The sample included some 58 foreign respondents (11% of the total). The questions relating the free train were not applicable to the foreign respondents. Only five of the 58 foreign respondents answered question 16 on suggestions for improvements. This may have been due to language problem with the surveyors and the respondents. 33 (57%) were Male and 25 (43%) Female, although 17% failed to answer the salary question some 55% covered the less than 15,000 to 35,000 per month baht range indicating a high number of students/backpackers. 40% found out about their service on the Internet compared to the overall figure of 25% and ticket purchasing behavior was very similar to the total overall sample results. Tickets were considered very easy to buy Q5; Total survey Foreigners % % V bad 0% 0% Bad 4% 3% Moderate 31% 10% Good 45% 29% V Good 20% 53% Non replies 0% 3% 100% 100% Value for money Q6 The tourists generally found Thai prices cheap and good value. Punctuality Q7 Total survey Foreigners % % V bad 0% 0 Bad 3% 5 Moderate 35% 19 Good 46% 34 V Good 16% 41 Non replies 0% 0 100% 100% The preferences expressed by the Tourists were not dissimilar to the overall sample results. Total survey Foreigners % % V bad 17% 12 Bad 18% 14 Moderate 32% 33 Good 27% 31 V Good 5% 5 Non replies 1% 5 100% 100% A-160

238 Question 8 to Q 14 responses were very much in line with the general overall sample results although the foreigners tended to be more positive on Station security (Q10) than the total overall sample result. CONCLUSIONS The total survey indicates to a great extent that the respondents are relatively satisfied with SRT stations and generally give answers to most questions as Moderate to Good. It may well be the case that such a result is expected when many of the respondents would not really know any better (SRT has experienced deterioration of infrastructure and old rolling stock for many years) and have no benchmarks to compare with. Also there is a tendency to go for the average (moderate response) when completing such questionnaires particularly when they are done quickly by people in a hurry, not really reading too deeply into the purpose of the questionnaire. The main negative expressed in the survey involved train punctuality and delays, which although generally outside of the control of the station management has a big impact on the traveller and their experience at a station; long delays cause passenger to spend a long time waiting and increases dissatisfaction with services. Those that took the time to express their views regarding areas of improvement (25% of the sample Q16) suggested punctuality, toilet facilities and cleanliness as the main areas needing improvement. Best international practice would suggest that many improvements could be made at the stations covered particularly in the areas of concourse signage and communications, ticketing, toilets, seats and other facilities for waiting passengers and visitors, interchanges, etc. The survey does show considerable scope for SRT to move customer opinion from average (moderate) preferences to the good and very good categories. In the main text of our report, based on our inspection of each of four SRT stations 23, we have identified several items needing attention at each of the four stations surveyed by the Consultant that may help to improve the experience of SRT passengers in the future. 23 In addition to the three stations included in the passenger survey (Hua Lamphong, Surat Thani and Nokorn Ratchasima), we have also inspected and interviewed the station personnel at Chiang Mai station A-161

239 APPENDIX 23 SRT SMART STATION PROJECT Background The SMART Station Project was firstly represented in 2008 and then started the operation which originally contains 12 stations from each districts such as Ayutthaya, Chachoengsao, Saraburi, Khon Kaen, Ubon Ratchathani, Nakhon Sawan, Phitsanulok, Chiang Mai, Hua Hin, Chumphon, Surat Thani and Yala. After the accomplishment from the first project, SMART station has become widely well-known around Thailand, therefore, SRT had decided to expand to the second period of SMART station which also contain another 12 stations from each districts as followed; Hua Mak, Hua Takhe, Muak Lek, Nong Khai, Buri Ram, Lop Buri, Sila At, Lamphun, Kanchanaburi, Prachuap Khiri Khan, Thung Song Junction and Sungai Kolok. Then to the 3rd period of SMART station which also contain another 13 more stations; Bang Pa-in, Prachinburi, Pak Chong, Sikhiu, Nakhon Ratchasima, Uthumphon Phisai, Ban Mi, Bang Mun Nak, Den Chai, Rachaburi, Thap Sakae, Trang and Phatthalung. In 2011, the 4rd SMART project has already begun to proceed with 12 more stations; and these 4 th phrase stations will be evaluated later in year SRT hope that this project will expand to reach more up-to-date and higher standard for the train stations in Thailand for the future. Principles SMART Station is the theory to improve the train station to satisfy the customers. As State Railway of Thailand (SRT) do not have the standard of what the train station should be. This theory would come in and help to improve the station to be more up-to-date, more convenience, Where do SMART stand for? S = Satisfaction: Provide the service to reach customers satisfaction. M = Mind: Given service with the service mind. A = Activeness: Activeness of staff R = Relation: Aiming to create a warm relationship with customers.. T = Traffic: Efficiency manage the traffic to be on-time and safety. Objective: 1. To improve and maintain the standard of services and facilities for customer satisfactions that could reach to One Stop Service. 2. To increase efficiency of the service in the stations. 3. To develop the stations and become more international standardization. 4. To create the familiar name of the SMART Station project (Brand Name) to the customers knowledge. 5. Becoming the model of what the stations should be for the future improvement. Goal: To improve and maintain the physical standard, facilities and service on the stations as the standard of SMART station. Total Stations that pass the standard evaluation are 49 stations A-162

240 Background Happy Toilet State Railway Department of Health, Ministry of Public Health has suggested SRT to improve the toilets on the stations and on the trains that reach the national standard, which is called HAS healthy, accessibility and safety. The representative of SRT and representative of Department of Health have signed the Memorandum of Understanding at Bangkok station (Hualumpong) on 3 rd December 2008 What do HAS stand for? H A S Healthy: Toilets have to be in sanitation conditions, which are clean, do not smell, good atmospheres and have all of the facilities, such as soap, water, tissue paper. bins etc. Accessibility: There are enough toilets to support the customers needs, including the disable toilets. Safety: the location of the toilets has to be safe and there are separate of male/ female toilets indications. Total Stations that pass the HAS standard are 209 stations A-163

241 APPENDIX 24 DRAFT SRT PASSENGER STATION MANAGEMENT AND OPERATIONS MANUAL 1. QUALITY OF CUSTOMER SERVICES 1.1. Management of Platforms and Passenger Flow Avoiding the Building-Up of Crowds During situations when it is expected that overcrowding may occur, station staff shall pay particular attention to: Observing passenger flows through CCTV; Regularly patrolling the station environs especially the critical areas, entrances and exits to ensure that there are no obstructions; and Reporting any significant increases (beyond the normal) in passenger flow to the STATION CONTROL ROOM who shall advise the STATION MASTER Station Cleanliness Cleaners (numbers of cleaners are related to station size) shall be available during the operating hours of the stations. For the cleaning activities a cleaning schedule is provided to ensure that the appropriate cleaning is given systematically to all parts of the station. Station cleaning shall be carried out at times that do not adversely affect the passengers and the operation of the station. The STATION MASTER will monitor the overall performance of the station cleanliness and shall advise the SERVICE MANAGER if the contractor work is not satisfactory. From time to time the SERVICE MANAGER shall arrange inspections on station cleanliness. The STATION MASTER shall note the result of the inspections in the Station Log Book Passenger Information Displays (PIDs) Passenger Information Displays or PIDs are electronic information systems which provide real-time passenger information. It may include both predictions about arrival and departure times, as well as information about the nature and causes of disruptions. Usually, the system owner will define Service Quality Criteria in accordance with EN13816 Transportation Logistics and Services Public Passenger Transport Service Quality Definition, Targeting and measurement". From this point, the system owner or operator will decide how much and where real-time passenger information is needed. It is not recommended to provide PIDs at all Stations. SRT may choose to install PIDs only at major stations and interchange stations, or may choose to install them in accordance with passenger numbers on that station, or may choose to install them at all stations Toilets Toilets are a provision on the Train or in the Station that usually is in correspondence with the Service Provisions that are detailed in the Service Criteria as developed in accordance with EN13816 Transportation Logistics and Services Public Passenger Transport Service Quality Definition, Targeting and measurement". A-164

242 From this point, the system owner or operator will decide how many and where toilets are needed. It may not be necessary to provide toilets in many locations, depending on the layout of each station. It usually recommended that many toilets are provided as they increase the cleaner's workload and need to be inspected, in accordance with topic 0 regularly. They also provide a problem to the safety of passengers and staff as they are a non-controllable area and cannot be monitored by CCTV. The toilet management shall be in accordance with by SRT's "Happy Toilet" Program Parcel and Baggage facilities Parcel Arriving Trains shall be oriented in such a manner that the SRT's Parcel Service does not obstruct the Passenger Flow. If this is not possible, due to obstruction and passenger safety, the parcel services shall hold the off-loading of parcel until passengers have departed the Train. To ensure passenger safety and decrease the risk of theft, loading of Parcel shall be conducted just before the Train departs. Under no circumstances shall heavy parcel trolleys be moved past passengers or across passenger flows to other trains, unless the area has been secured by Station Staff or the Station Security Passenger Baggage Baggage Trolleys Baggage trolleys are only provided in Makkasan station. The trolleys can only be used at the Express platform and are not allowed into the train. At all times one (1) Trolley Handler staff will be on duty at the platform. They are to ensure that: No trolleys are brought into the train The platform is kept free from unattended trolley 1.5. Management of Concession Area's In order to provide a safe and clean station, especially in terms of fire hazards and odors, the station concession areas shall be zoned in accordance with the type of service provided by the concessionaire. Food Stands and Restaurants shall be confined to an area in the station in order to keep the rest of the station free of odors and ensure that food wastes are not distributed all over the station. A Concession Zoning Plan shall be developed for all stations, before concession agreements are made. The Concession Zoning Plan shall consider and mitigate at least the following: Hazards that may occur out of the concessionaires service type (especially Fire) A-165

243 Negative Effects on the Station Environment that may occur out of the concessionaires service type (especially Odors, trash, wastes) Passenger Cross flows Usage of SRT property to the benefit of the concessionaire (e.g. benches and chairs) Accessibility and Visibility of the concessionaires area Rent and other payments, in relation to all the above 2. QUALITY AND PERFORMANCE STANDARDS 2.1. Cleaning Standards Cleaners shall be available during the operating hours of the stations. For the cleaning activities a cleaning schedule is provided to ensure that the appropriate cleaning is given systematically to all parts of the station. Station cleaning shall be carried out at times that do not adversely affect the passengers and the operation of the station. The STATION MASTER will monitor the overall performance of the station cleanliness and shall give advice the cleaning contractors management if the work is not satisfactory. From time to time the STATION MASTER shall arrange inspections on station cleanliness. The STATION MASTER shall note the result of the inspections in the Station Log Book Staff Duties Station Staff shall report for duty to the STATION MASTER in accordance with the duty roster. A duty reporting form will be available in the STATION CONTROL ROOM where station staff shall sign in and out for duty as shown below. Booking On/Off Book For the Month of: Station ; Date; Name Staff No: Book on Time Sign Book Off Time Sign Any unplanned leave (i.e. sick leave, emergency leave, etc) shall be reported as soon as possible to the STATION MASTER so that arrangements for replacement can be made. If any member of staff does not report for duty at the required time and location the STATION MASTER shall be informed immediately. The staff member due to be relieved shall remain on duty until the relief staff arrives or other arrangements have been made. The STATION MASTER shall carry out Station inspections at regular intervals during Revenue Operation Time and the nightly Maintenance Working Period. Regular inspections shall focus on: Station facilities to be in good working conditions Incident / Accident prevention Cleanliness of the station Efficiency of station operation A-166

244 2.3. Staff Behavior and Appearance All station staff has to wear cleaned provided uniforms all time while on duty. This is for an easy identification of staff by passengers on duty and for a clear identification in case of emergency Customer Contact and Assistance Station staff shall be always polite and friendly while in contact with passengers. Station staff shall be always willing to help especially while in contact with disabled passengers. 3. STATION INTEGRATION WITH OTHER MODES 3.1. Ease of Intermodal Transfers In order to easily obtain access to the station, each passenger can arrive at the station by the following methods: Walk to the Station Drive to the Station Take a Taxi to the Station or be dropped off by another person Take a Bus to the Station Use the Rail Based Transit (e.g. MRT, the Red Line, Airport Link, BTS) Others Therefore, the SRT stations must be able to facilitate passengers arriving by these modes. Usually feasibility Studies are conducted, presenting quantitative assumptions for passengers arriving with each mode. Therefore, the SRT or the station designer can then build the facilities in accordance with the expected passenger numbers. These facilities usually include, but are not limited to: Save walking path to the Stations Long Term Parking and/or Park and Ride Facility Signed stopping locations for Taxis and drop off passengers Bus Stops Direct access bridges or tunnels to Rail Based Transit Others, as appropriate Usually, these accesses are provided during the design stage of each project in accordance with the feasibility study and the requirements posed in the contract. Later on they are rechecked by a document called the Walk-ability Study, which assesses station accessibility for normal passengers and passengers with special needs. In the case that the station has already been constructed, a mutually beneficial way would be to approach the owner and/or operator of the other mode of Transport in order to provide mutual benefit for both Station Signage Usually, each owner has a Graphics and Signage Policy, which indicates the sizes, types and amount of signage required for each station. This policy helps SRT to identify the correct size and type of Sign for all locations quickly and eases the procurement process. Signs in all stations should always be the same, no matter the location, in order to not confuse the A-167

245 passengers and to produce a unified system. The signage policy is usually categorized into the following: Illuminated/Non-Illuminated Safety Relevant Signage (e.g. escape path signage) Permanent Illuminated/Non-Illuminated Information Signage (e.g. Train Schedule) Non-Permanent Illuminated/Non-Illuminated Signage (Such as Fare Tables) Commercial Billboards In order to provide appropriate signage, the consultant recommends SRT's QA department to produce a Standard Set of Signage for SRT and its sub-sideries. The exact need for Signage shall be analyzed in accordance with escape paths, safe-points, station facilities, etc. It is also recommended to conduct a hazard analysis of the Station and utilize signage in order to reduce system risk. 4. SAFETY 4.1. Security of Rooms and Offices All doors leading into non-public or restricted areas at stations shall be kept locked at all times. When maintenance or cleaning work shall be performed within non-public or restricted areas, the STATION MASTER shall make arrangements to ensure that the security is maintained Unauthorized Person on Premises Station staff and Security Guards shall ensure that street vendors, hawkers, pamphlet distributors and other unauthorized persons do not loiter or enter the station, annoy passengers, cause obstruction or generally create a public nuisance Station Security General Tasks of the Security Guards The security guards shall: Assist in the control of the public, Ensure passenger security in the station, Prevent unauthorized access to the System Provide a deterrent to vandalism and inappropriate behaviour of persons inside the stations Assist in other station activities, e.g. crowd control Specific Tasks of the Security Guards during Revenue Operation During Revenue Operations the Security Guards have the following tasks: Observe that the passenger s behavior is in compliance with SRT security regulations for passengers and the general law, Patrol regularly through the station and to the station entrances, Report irregularities to the STATION MASTER, take action to prevent violation of regulations and secure evidence, Accompany STATION STAFF, when they transport cash from the Ticket Offices to the Cash Handling Room, Investigate fire alarms in the public area, upon instruction of the STATION MASTER, Report incidents in the public area to the STATION MASTER, A-168

246 Perform additional tasks as instructed by the STATION MASTER Specific Tasks of Security Guards to Support the Money Transfer During transferring of money, the Security Guards shall assist as follows: Conduct a visual inspection of the transport route prior to the arrival of the Money Transport Company, Secure and observe the door to the Audit Room, Accompany the staff of the Money Transport Company when they transport Money Containers through the public area. Report irregularities to the STATION MASTER Opening and Closing the Station during the Night Hours Since the entrances of the stations cannot be closed in all station, a security guard shall be placed at the gates to control access if there is no Revenue Operation. The security guard will ensure there is no unauthorized person in the premises if the Station is closed. The entrance door at the ground level will be the only entry to enter and exit during Station Close. Security Guard needs to contact and get approval from STATION MASTER for Contractor to enter premises Supervision of Security Staff by the STATION MASTER The STATION MASTER supervises the Security staff and ensures that they work in compliance with their tasks. The STATION MASTER shall inform the SERVICE MANAGER when Security Staff does not comply with their tasks Passenger Safety Station Crowd Management General The objective of station crowd management is to prevent overcrowding of station premises (e.g. Songkran, New Year). When a situation occurs that crowds are building up in a station and preventive actions shall be taken, the STATION MASTER shall inform the SRT OPERATIONS immediately Potential Problem of Crowds Overcrowded station areas pose a risk in that: Passengers feel uncomfortable due to the jostling and pushing The situation results in an incident or emergency as passengers may: o Get injured due to being pressed against station equipment/facilities o Get injured due to being pushed from the platform into the track area. o Get injured due to being pushed down the stairs or escalators (if applicable). o Get injured due to being pushed over and trampled underfoot. o Suffer from heat exhaustion. o Faint through lack of air. The passenger flow cannot be controlled A-169

247 Overcrowded stations also pose a problem with proper communications between station staff and passengers, as well as the potential safety hazard of large groups of people close the active railway tracks. A great number of persons make it difficult for the crowd to start moving, to move or to stop Critical Areas and Occasions of Crowd Build-up Crowds are likely to build up in certain areas of a station and at particular occasions. Critical areas, which are at risk for crowds to build up are: The platforms, particularly the platform edge, the escalator (if applicable) and stair entrances, The concourses, particularly the gate arrays, the escalator (if applicable) and stair entrances, The station entrances and exits, All other areas where passengers shall pass through a bottleneck or where passengers cannot continue to proceed due to physical obstacles (such as stairs, fences etc.), but the crowd is still pushing from behind. Particular occasions when it shall be expected that crowds may build up are: During peak hours, particularly when trains are delayed or another event additionally increases the number of passengers, During adverse weather, During service disruptions, During times of increased passenger demand due to special events, During incidents and emergencies, particularly during situations of evacuation Measures to be taken when a platform is overcrowded When the STATION MASTER is advised of overcrowding at the platform level, the STATION MASTER shall: Inform SRT OPERATIONS. Instruct STATION STAFF on the platform to take charge of platform operation and passengers movement; Turn off all escalators (if applicable) to the platform and barricade their entrances; Position security guard at the lower level of stairs to the platform (if applicable) to control the movement of passengers to the platform in accordance with the STATION STAFF instruction. Minimize the number of open ticket windows or entry gates to slow down the flow of passengers; If necessary position security guard at the entry gates to control the movement of passengers to the platform in accordance with the STATION STAFF instruction. If necessary position security guard at the station main entrances to control the movement of passengers in accordance with the STATION STAFF instruction If necessary close the station to incoming passengers until the overcrowding subsides. A-170

248 Crowd Management Methods The fastest and most effective method of crowd control is to stop passengers from entering the station. There are a number of methods for managing crowds. The STATION MASTER shall exercise their judgment, which method shall be used. Crowd Management Method Who does it Expected Result Regulate Passenger Flow Put staff at the entrances to carry out group release to limit the number STATION STAFF, Security Guards Regulate the passenger flow into the stations. incoming passengers Close the Entry Gates STATION MASTER Limit the passenger flow to the platforms. Use loud hailers to direct passengers Introduce one-way flow at strategic locations and entrances STATION STAFF, Security Guards Speed up the passenger flow. Avoid conflicting movements and improve the flow of the moving crowds Clear Passengers from the Station Arrange for empty trains to pick up passengers Make PA announcements asking passengers to leave. Prevent Passengers from entering the Station Arrange for non-stop running of trains Close station entrances Put up notices at entrances and entry gate arrays to inform: Why the station is closed Stop escalators (if applicable) leading to platforms SRT OPERATIONS, STATION MASTER, TO STATION MASTER SRT OPERATIONS, STATION MASTER, TICKET OFFICE STAFF STATION STAFF, Security Guards STATION STAFF Clear passengers from the platforms. Clear passengers from the station Prevent passengers from entering the station from trains. Prevent passengers from entering the station through entrances. Prevent passengers from entering the station or specific areas of the station. Restrict the number of passengers entering the platforms Station Cleanliness At least two cleaners (at major stations) shall be available during the operating hours of the stations. For the cleaning activities a cleaning schedule is provided to ensure that the appropriate cleaning is given systematically to all parts of the station. Station cleaning shall be carried out at times that do not adversely affect the passengers and the operation of the station. The STATION MASTER will monitor the overall performance of the station cleanliness and shall advise the SERVICE MANAGER if the contractor work is not satisfactory. From time to time the SERVICE MANAGER shall arrange inspections on station cleanliness. The STATION MASTER shall note the result of the inspections in the Station Log Book Item dropped onto the Track Area at Stations When the STATION CONTROL ROOM receives a report from a passenger or station staff that an item has been dropped onto the track, the STATION CONTROL ROOM shall: A-171

249 Report to the SRT OPERATIONS and confirm the location of the item dropped. If the passenger is present, advise the passenger to stay at the platform area. Request an unscheduled TP from the SRT OPERATIONS to enter the track area to collect the item. After receiving the authorization from the SRT OPERATIONS, enter the track area and collect the dropped item, Hand back the access authorization. Report to the SRT OPERATIONS when the item is retrieved and all staff has left the Track Area, Make an entry into the Station Log Book Employee Safety Protective Equipment All Station Staff shall be fully equipped with Personal Protective Equipment (PPE) as soon as they enter areas such as: Tracks Machine and Equipment Rooms Electrical Rooms Storage Rooms Others with working conditions as required by local and SRT regulations This PPE may consist of: Hardhat Steel-Toed Shoes High Visibility Vest High Visibility Clothing Others as applicable Training and Evaluation All Staff shall be fully trained in the procedures in accordance with their works. Staff that has not received proper training shall not conduct any work he is not trained for. In addition, Station Staff and Security Guards shall fully be knowledgeable to provide preliminary emergency response, such as Cardiopulmonary resuscitation (CPR) and the use of Fire Fighting equipment. They shall be regularly evaluated and retrained in order to provide the highest status of emergency preparedness and readiness Safety on the Mainline The details for entering the track area are described in the Operations Procedure in the SRT Manual. Any doubt shall be clarified with the immediate Supervisor. Prior entering the track area the STATION MASTER shall request the SRT OPERATIONS to block the section of track to be entered. If required the adjacent track shall be blocked as well. A-172

250 4.8. Emergency Operations Emergency Operations considers potentially life-threatening situations to passengers and / or staff and other events that may cause severe damage or system loss Incident Management For details regarding incident management refer to present SRT procedures. In addition, consider the following: Reporting an Incident/Accident In order to initiate the appropriate emergency response, incidents shall be reported immediately to the SRT OPERATIONS (Annex B) Line of Information during Service Disruption, Incident, Accident or Emergency During service disruption, incident, accident or emergency the STATION MASTER shall obtain the following information from the SRT OPERATIONS: Estimated duration of the event Arrival/departure time of next train at terminal stations Eventual alterations of the train schedule The STATION MASTER shall inform the passengers in the station about the next possible train services or alternative transportation Uncontrolled or Emergency Evacuation Uncontrolled Evacuation occurs when the safety of passengers is at immediate risk and an immediate evacuation is required. Efforts shall be made to support the evacuation. The STATION MASTER shall: Assume the role as the INFORMATION MANAGER. Position Station staff to provide support (first aid, stretcher etc.) and guide passengers out of the station Stop Escalators (if applicable) after an announcement is made to use the staircases and the stopped escalators as staircases. Request the Assistance of Emergency Services if required Fire General When fire alarm is triggered by the fire alarm system or reported by a person, who is not an SRT staff member, the STATION MASTER shall immediately send a Security Guard or STATION STAFF to the incident location to verify the situation. If the fire alarm is confirmed, the following fire alarm response shall be implemented: The STATION MASTER shall assume the role of the INFORMATION MANAGER. Staff on site shall attempt to extinguish the fire, without exposing themselves or others to danger, If the fire cannot be extinguished: A-173

251 The INFORMATION MANAGER shall report the fire to the SRT OPERATIONS. The SRT OPERATIONS assuming the role of the Incident Controller (IC)shall alert the Fire Brigade. The station shall be evacuated immediately. All gates to the station area shall be Opened. The INFORMATION MANAGER shall establish a command post Security or STATION STAFF shall be positioned at the station entrance to await the arrival of the Fire Brigade and to guide them to the command post. Inform maintenance and contractor staff to leave the station Inform tenant at commercial outlet level Staff Assembly Point After staffs have evacuated the station, they shall report to the STATION MASTER that they have reached the designated assembly point. The designated assembly point for staffs is a location at street level near the Main Entrance. The STATION MASTER shall instruct the STATION STAFF to ensure that all staff (Station Operators, Maintenance Contractors staff, Cleaners, Security Guards, and Tenants) working in station have been evacuated from the station and that they have gathered at the Assembly Point Fire in Station Respond to Fire Alarm In case of a fire alarm on the Fireman s Control Panel (if applicable), The STATION MASTER shall: Press the ACKNOWLEDGE button within 15 seconds and start the investigation immediately. Silence the buzzer pressing the ALARM SILENCE button. Check the location of the fire alarm displayed on the Mimic Panel. Check whether the location of the alarm is in a public area. Instruct STATION STAFF to investigate the situation. Concentrate surveillance on the area concerned via CCTV, if possible. Report the case to the SRT OPERATIONS. Should the investigation reveal a false alarm the STATION MASTER shall press the RESET button on the Fireman s Control Panel to abort the alarm before the 3 minute investigation time has expired, Should the investigation reveal that there is a genuine fire that cannot be extinguished immediately, the STATION MASTER shall press the DRILL button to initiate a general fire alarm. The STATION MASTER shall report the result of the investigation to the CCO. The STATION STAFF or staff appointed by the STATION MASTER shall: Proceed to the site without delay and take the master keys and a hand portable radio with him/her, Investigate the cause of the fire alarm and inform the STATION MASTER whether: There is a fire or not, A-174

252 o The fire protection system has been activated, o The fire can be extinguished immediately Genuine Fire Alarm If there is a genuine fire alarm, the STATION STAFF shall: Inform Station staff of the fire. Indicate the severity of the fire whether it can be extinguished locally with fire fighting equipment or not. Take actions to extinguish the fire: o Operate the fire protection system manually if necessary, o Use the portable fire extinguishers to extinguish the fire if it is safe to do so, Keep a safe distance from the fire and warn other persons to stay away. STATION MASTER shall: Assume the role of the INFORMATION MANAGER. Press the RESET button to abort the alarm before 3 minutes have expired in case there is a small fire that can be extinguished locally. Confirm that there is a genuine fire that they cannot extinguish, Press the DRILL button in order to initiate a general alarm. Request the SRT OPERATIONS to call out the External Emergency Services, Initiate the evacuation of the station and deploy Station Staff to instruct the passengers to leave the station according to the Emergency Operation Clause 9.3 (Uncontrolled and Emergency Evacuation) Close the ticket offices and the STATION CONTROL ROOM (as necessary). In case the STATION CONTROL ROOM shall be evacuated, the STATION MASTER shall proceed to the entrance, Advise the SRT OPERATIONS of the circumstances, including the possibility to use trains for the evacuation purposes. Update the SRT OPERATIONS at frequent intervals on the progress of the firefighting efforts and on any changes to the extent of the fire False Fire Alarm In case the fire alarm is false, the STATION MASTER shall: Reset the fire alarm panel in order to avoid station evacuation or to abort it. Inform the passengers, the STATION STAFF, the Security Guards, the Contractors Staffs and the Tenants that the alarm was a false alarm and that the evacuation procedure has been cancelled, Report to the SRT OPERATIONS, Have the defective fire detector isolated accordingly Evacuation in Case of Fire The station evacuation in the event of fire at the station is differentiated by: Evacuation to the track Evacuation by train A-175

253 General If the evacuation of a platform cannot be performed through the concourse level, because the fire is cutting off the escape routes, the STATION MASTER assuming the role of the INFORMATION MANAGER shall inform the SRT OPERATIONS and requested a train to the platform, to realise the evacuation from platform to train. The SRT OPERATIONS shall confirm whether a train can be provided within a short time. If no train can be provided within a short time, the INFORMATION MANAGER shall request the authorization to evacuate the platform into the track area. The evacuation may start after the authorization to enter the track area is obtained Evacuation to the Track The STATION MASTER shall: Make PA announcements to the passengers in the affected area and inform that station staff will guide them to the nearest station or place of safety via the tracks and ask the passengers to follow the instructions. Request the SRT OPERATIONS to stop train movements in conflict with the evacuation route, When the SRT OPERATIONS informs that the track is clear and the STATION STAFF reports that the Earthing Devices (in case electrified) have been installed: The STATION MASTER shall: o Instruct a STATION STAFF to guide the passengers to the nearest station or a place of safety, o Make PA announcements to the passengers that the track is safe to enter and that they will be guided to the nearest station or a place of safety. o Inform the STATION MASTER of the nearest station concerned about the evacuation arrangements. o Ensure that the platform is clear of passengers and follow the last passenger to the nearest station or place of safety. o Upon arrival at the nearest station, or place of safety report arrival with all passengers to the SRT OPERATIONS. The STATION MASTER of the nearest station shall: Request the SRT OPERATIONS to have the track cleared, if required Instruct Station Staff to meet with the passengers and to assist them Fire on Board a Train at a Station When a train is on fire at a station or approaching a station platform, the STATION MASTER shall: Assume the role of the INFORMATION MANAGER. Report the fire to the SRT OPERATIONS, who assumes the role of the Incident Controller (IC) Ensure that evacuation announcements are made. Immediately evacuate the train Immediately evacuate the station platform. Confirm the evacuation of train and platform and station to the SRT OPERATIONS, A-176

254 4.9. Security Accident to Passengers and Staff In case of an accident at the station, the STATION MASTER as the INFORMATION MANAGER shall: Report to the SRT OPERATIONS (IC). Provide First Aid, if necessary. Indicate whether external emergency response is required. Ensure the accident site is sufficiently protected (barricade the accident site). Investigate the circumstances of the accident. Wait for assistance if needed. Write an Incident Report Accident Involving Fatal or Serious Injuries Person on the Track When apers on fell on a platform track the STATION MASTER shall: Inform the SRT OPERATIONS, and request all trains approaching the station to stop Request authorization to access the track area Assume the role of the INFORMATION MANAGER Proceed to the incident location immediately Activate the Emergency Stop Plunger if not already done by passengers Instruct station staff to assist Provide assistance, if the person is able to stand up and can leave the track area Request medical assistance, if the person is unable to stand up. Report to the SRT OPERATIONS when operation can be resumed The incident shall be investigated immediately. CCTV records shall be taken as evidence Unauthorized Track Intrusion If an unauthorized track intrusion is reported, station staff shall report this immediately to the STATION CONTROL ROOM giving the exact location of the unauthorized intrusion. The STATION MASTER shall: Advise the SRT OPERATIONS who shall: o Stop trains at the affected location; o Request police attendance; o Advise the SRT OPERATIONS. Advise the STATION STAFF who shall: o Arrange security presence on the platform; o Arrange a Track Possession for STATION STAFF and police to enter the track to look for and detain (if possible) the offender or report the location to the STATION MASTER for police intervention. A-177

255 5. COMFORT AND ARCHITECTURAL ATTRACTIVENESS 5.1 Buildings and Equipment In order for SRT to define the service quality that is to be provided to the passengers, SRT needs to develop a Service Quality Criteria in accordance with EN13816 Transportation Logistics and Services Public Passenger Transport Service Quality Definition, Targeting and measurement. This will enable SRT to estimate which and to what extent comfort in each station should implement. The general criteria to for this definition of service quality are shown below: Availability Access Information Time Customer Service Comfort Safety Environment e.g. network, operation time, reliability e.g. interfaces, ticketing e.g. travel information, regular and occasional e.g. travel time, punctuality, regularity e.g. availability of personal, competence, assistance e.g. space, driving, environment e.g. Freedom from crime, avoidance of criminal attacks and of accidents, Emergency response e.g. pollution, resources 5.2. Internal Design for Comfort All existing Station buildings should be reevaluated in terms with the Service Quality Criteria as shown in topic 0. Future Stations that are to be designed and built must also be evaluated in terms with these criteria. 6. STATION ADMINISTRATION 6.1. SRT Procurement Procedures The STATION MASTER has to report all financial or investments to the STATION MANAGER of SRT. The STATION MANAGER needs to ensure that all financial issues are properly addressed within SRT s commercial department. For further details, refer to procurement, financial rules and regulations of SRT. 6.2 Duty Rostering and Reporting of Station Staff Duty Rosters for Station Staff The Station Department shall prepare a monthly duty roster for the deployment of the station staff. The duty roster shall be endorsed by the SERVICE MANAGER Log Books Station Log Book During their duty the STATION MASTER shall keep records about events, irregularities and the actions taken in the Station Log Book (Annex A). Reportable events are: Incidents. Accidents. Technical failures and defects Any other irregularities / events that need to be followed up. A Station log book shall be stored for at least 10 years after completion. A-178

256 Accident and Incident Reporting In order to initiate the appropriate emergency response, incidents shall be reported immediately to the SRT OPERATIONS (Annex B) Reporting, Monitoring & Control Maintenance Work within the Station Area Reporting for Work Any SRT s personnel / 3rd party contractors shall report to the STATION CONTROL ROOM before: Performing any work within the Station Area, Using the station as access / exit point to the Mainline for the purpose of Maintenance Work. The staff shall show their ID card and an approved Work Permit/Track Possession, where purpose, time and location of work are identified. The STATION MASTER shall check the correctness of the documents. He may reject or stop any work that: Is not approved by a valid work order, Has the potential to endanger passengers/public/staff/equipment May significantly disturb the comfort of the passengers Access to Restricted Areas within Stations 3 rd Party Contractors requesting access to a restricted area within a station shall be accompanied by authorized SRT staff. The STATION MASTER shall reject the access to a restricted area when authorized SRT staff does not accompany the 3rd Party Contractor staff Station Staff Reporting for Duty Station Operators and Ticket Officers Station Staff shall report for duty to the STATION MASTER in accordance with the duty roster. A duty reporting form will be available in the STATION CONTROL ROOM where station staff shall sign in and out for duty. Any unplanned leave (i.e. sick leave, emergency leave, etc) shall be reported as soon as possible to the STATION MASTER so that arrangements for replacement can be made. If any member of staff does not report for duty at the required time and location the STATION MASTER shall be informed immediately. The staff member due to be relieved shall remain on duty until the relief staff arrives or other arrangements have been made Contractor Staff Contractor s staff (e.g. cleaners and security staff) report for duty to the STATION MASTER at the commencement and at the end of their shift duty. A-179

257 Modifications of Duty Roster Modifications of the duty roster shall be accepted by the STATION MASTER and endorsed by the SERVICE MANAGER. Station staff who want to change their duties shall request the modification at least three days in advance of the duty which is intended to be changed. The STATION MASTER may amend the duty roster dependent on the operational requirements. The Station Department shall be informed about any modifications as soon as possible Management & Financial Reporting The STATION MANAGER shall develop financial reporting in accordance with SRT financial rules and regulations Budgets Requests The STATION MASTER has the duty to prepare a yearly budget request for normal daily operation and necessary investments, repair or refurbishments and send to STATION MANAGER at the Head Quarter in time for budget preparation. The STATION MANAGER shall then review that budget together with the station master in order to verify the requirements. This budget must be scaled in accordance with the stations size and last general renovation. A-180

258 ANNEX A: STATION LOG BOOK (EXAMPLE FORM SRT-ET) Station Log Book Location : Date : From : 0700hrs (date) 0700hrs (date) 1. STATION MASTER On Duty STATION MASTER on Duty STATION STAFF on Duty Remarks Morning A Shift Start-End 0700hrs 1530hrs Afternoon B Shift Start-End 1500hrs 2330hrs Night C Shift Start-End 2300hrs 0730hrs Off/Rest Day Name Status Remarks 1. Events No. Time of Event Event (Location, Description, Effects, Solutions) Remarks & Action 2. Key Log No. Name Dept Key No Purpose Time Out Time In Remark A-181

259 ANNEX B: INITIAL INCIDENT REPORT (EXAMPLE FORM SRT-ET) หน วยงาน Department Station พน กงานควบค มรถ TD Other (Please specify) Engineering CCR รายงานเหต การณ Initial Incident Report ส าหร บส วนความปลอดภ ยและค ณภาพ For SS&Q Dept use only หมายเลขเหต การณ Incident No. ระด บความร นแรง Incident Category ช อ (Name) ลายเซ นพน กงาน (Employee s signature) ว นท (Date) ว นท ส งรายงาน ต าแหน ง (Position) หมายเลขประจ าต ว (ID) เวลาท เข ยนรายงาน (Report time) สถานท เก ดเหต (Location) (Report Submit Date) ว นท เก ดเหต (Date notified) เวลาท เก ดเหต (Time notified) ทางว งรถไฟ (Track Section) ประเภทของเหต การณ (Type of Incident) สถาน (Station) เล อกได มากกว าหน งประเภท ( More than one type can be selected) ภายนอกพ นท (Off property) อ นๆ (Other) บาดเจ บ (Injury) ท าลายทร พย ส น (Property Damage) ช นออกบ ตรโดยสาร(Concourse) ค กคาม ท าร ายร างกาย (Assault/ Threat) รถไฟตกราง (Derailment) ช นชานชาลา (Platform) หกล ม (Fall) รถไฟชนก น (Collision) ช นกลาง (Intermediate) ศ นย ซ อมบ าร ง (Depot) รถไฟชน ( Hit by train) อ คค ภ ย (Fire) บนรถไฟ (Onboard train) โรงซ อมบ าร งหล ก (Main workshop) บ กร ก (Trespasser) รถไฟจอดเส ย (Stalled train) ทางเด น (Walkway) Track No. ข วางระเบ ด (Bomb threat) เหต ระเบ ด (Explosion) บ นไดเล อน (Escalator) อ นๆ (Other) การท าผ ดกฎ ระเบ ยบ (Offense) อ นๆ (Other)-โปรดระบ (Please specify) ล ฟต (Elevator) เหต จวนเจ ยน หร อ การฝ าส ญญาณห าม (Near-miss or SPAD) บ นได (Stairway) ผ จ ดการเหต การณ ประจ าการ ณ จ ดบ ญชาการ เวลา(Incident Manager at command post? Time) - ผ จ ดการประชาส มพ นธ ประจ าการรายงานต ว ณ จ ดบ ญชาการ เวลา( ARPM reports at command post? Time) - เจ าหน าท ส วนความปลอดภ ยและค ณภาพประจ ากา รายงานต ว ณ จ ดบ ญชาการ เวลา (SS&Q Staff reports at command post? Time) - ห วหน าหน วยก ค นระบบรายงานต ว เวลา (IRT leader on site? Time) - หน วยงานบร การฉ กเฉ นภายนอกเข ารายงานต ว ณ จ ดบ ญชาการ (EES at command post? Time) - ผจก. ส วนการเด นรถ / ผจก. ฝ ายการเด นรถประจ าการ ณ ศ นย ควบค มการปฏ บ ต การ เวลา(CCR Manager at CCR? Time) - ส าหร บเหต การณ ท เก ดข นบร เวณบ นได (Stairway Occurrence) ส าหร บเหต การณ ท เก ดข นบร เวณบ นไดเล อนหร อล ฟต (Escalator / Elevator Occurrence) ท ต งบ นได (Location of stair) ช น (Floor) ส วนใดของบ นได (Which part?) ส วนล าง (Bottom) ส วนกลาง (Middle) ส วนบน(Top) ข นบ นไดเม อน บจากด านล าง (Number of stairs from bottom) ท ศทางการเคล อนท ของผ ประสบเหต (Persons moving) ข น (Up) ลง (Down) หมายเลขอ ปกรณ (Equipment No) ช น (Floor) ท ศทางการเคล อนท (Equipment Movement) ข น (Up) ลง (Down) หน วยสน บสน นในกรณ ฉ กเฉ นท ปฏ บ ต งานในพ นท (Emergency services on site) สภาพพ นท เก ดเหต (Condition of Site) ตรวจสอบหล งจากเก ดเหต (Inspected after occurrence) นาท (min) พ นท ท ปฏ บ ต งาน (Exact Location) พ นท ม สภาพล น (Was it slippery?) ใช (Yes) ไม ใช (No) ต ารวจ (Police) จ านวน : 1 คน หน วยแพทย ฉ กเฉ น (Emergency Medical น า (Water) รก สกปรก (Litter) Services) จ านวน : คน ส งก ดขวาง (Obstacle) ช าร ด (Defect) เวลาเข า/ออก(Arrival/Departure time): / เวลาเข า/ออก(Arrival/Departure time): / ช อสถาน (Police station) : ช อโรงพยาบาล(Hospital) : ด บเพล ง (Fire Brigade) จ านวน : คน อ นๆ (Other) ระบ จ านวน : คน เวลาเข า/ออก(Arrival/Departure time): / เวลาเข า/ออก(Arrival/Departure time): / ช อสถาน สปภ. (Station) : ส งก ด (Affiliated with) : โปรดอธ บายสภาพช าร ดหร อส งก ดขวางในพ นท (Describe defect or obstacle) สภาวะอากาศ (Weather conditions) แดดจ า (Sunny) เมฆ (Cloudy) แสงสว าง (Lighting conditions) ไฟแสงสว างปกต (Normal lighting) ม ด (Dark) ฝนตก (Raining) หมอก (Fog) สล ว (Dim) ฝนฟ าคะนอง (Thunder storm) อ นๆ (Other) ไฟแสงสว างฉ กเฉ น (Emergency lighting) อ นๆ (Other) A-182

260 ผ บาดเจ บ / ผ เส ยหาย ท 1 (First injured person / Victim) อาการบาดเจ บ (Type of injury) ส วนท บาดเจ บ ( Injury parts) การร กษาพยาบาล (Case of injury) ช อ-สก ล (Name) แผลถลอก (Bruise) ศ รษะ (Head) ปฐมพยาบาล (First Aid) ท อย (Address) แผลใหญ ม เล อดออก (Wound) ม อ (Hand) แพทย (Physician) เขต/อ าเภอ (District) จ งหว ด (Province) กระด กห ก (Fracture) ขา (Legs) โรงพยาบาล (Hospital) ท ท างาน (Work) อ นๆ(Other) อ นๆ(Other) อ นๆ(Other) หมายเลขโทรศ พท (Phone) บ าน (Home) โรงพยาบาลท เข าร บการร กษา (Name of hospital) ความส ญเส ยท ผ เส ยหายได ร บ (Harm Occurrence) Injured at head and face ผ บาดเจ บ / ผ เส ยหาย ท 2 (Second injured person / Victim) อาการบาดเจ บ (Type of injury) ส วนท บาดเจ บ ( Injury parts) การร กษาพยาบาล (Case of injury) ช อ-สก ล (Name) แผลถลอก (Bruise) ศ รษะ (Head) ปฐมพยาบาล (First Aid) ท อย (Address) แผลใหญ ม เล อดออก (Wound) ม อ (Hand) แพทย (Physician) เขต/อ าเภอ (District) จ งหว ด (Province) กระด กห ก (Fracture) ขา (Legs) โรงพยาบาล (Hospital) หมายเลขโทรศ พท (Phone) ความส ญเส ยท ผ เส ยหายได ร บ (Harm Occurrence) ท ท างาน (Work) อ นๆ(Other) อ นๆ(Other) อ นๆ(Other) บ าน (Home) โรงพยาบาลท เข าร บการร กษา (Name of hospital) พยาน (Witness) หมายเลขโทรศ พท (Phone number) ช อ (Name) ท อย (Address) บ าน (Home) ท ท างาน (Work) ผ กระท าผ ด และผ ก อเหต (Offenders and troublemaker) หมายเลขโทรศ พท (Phone number) ช อ (Name) ท อย (Address) บ าน (Home) ท ท างาน (Work) รายละเอ ยดความเส ยหายของทร พย ส น และส งก อสร าง (Damage of properties and infrastructure) A-183

261 มาตรการป องก นหร อแก ไขท ได ด าเน นการไปแล ว (Corrective and Preventive Action) ข อเสนอแนะ (Recommendations) ล าด บเหต การณ (Sequence of events) เวลา (Time) เหต การณ ท เก ดข น (Occurrence) A-184

262 ANNEX C: RECOMMENDATIONS AND SUGGESTIONS In order to improve the situation, the consultant suggests implementing the following resolution in the arranged order: Table 2: Medium and Long Term Suggestions on Improvement Medium to Long Term Suggestions on Improvement (Should be implemented before AEC) Establish a Quality Department Identify Standards to be used for Design, Management, and Service as well as train key SRT staff Transfer the knowledge of key staff to the remaining staff Implement such Standards into the sectors of SRT Create an environment in which SRT Staff can identify themselves with the organization Decentralize SRT to empower employees and set up scaled budgets Purchase and implement a common Asset and Maintenance Management System (such as CMMS) Decommission Equipment which is too costly to maintain or repair or cannot be repaired (the income may be used to implement measures above) Short Term Suggestions on Improvement (Should be implemented immediately) Table 3: Short Term Suggestions on Improvement The Station Managers should be assigned an annual budget for station improvements All Station and Facilities Sub-Contracts and concession agreements should include clauses to allow direct control of concessionaires and Sub-Contractors. Light maintenance works carried out at station should be limited to minor repair and maybe basic cleaning. Stabling and Maintenance Tracks should be cleared of broken Trains Washing Plants must be in working order Budget for staff training should also be available for example English language training and passenger service training activities Each station needs to develop a station manual based on the specific station characteristics and station environment in order to have clear procedures and a clear line of command. According to international standards evacuation and fire alarm procedures shall be available including emergency exit signs and assembly points. The train time table displays should be modernized using digital displays which can show the actual time table as well as any delay or cancelled trips. It is further recommended to investigate in more details the safety and security at stations based on international standards. These standards shall include, service standards and design standards, such as, EN13816 Transportation Logistics and Services Public Passenger Transport Service Quality Definition, Targeting and measurement" and EN50126 Railway applications The specification and demonstration of Reliability, Availability, Maintainability and Safety (RAMS) as well as Fire and Life Safety Standards, such as, NFPA130"Standard for Fixed Guideway Transit and Passenger Rail Systems" A-185

263 ANNEX D: DOCUMENT HIERARCHY A-186

264 ANNEX E: EMERGENCY RESPONSE ORGANIZATION (EXAMPLE TAKEN FROM ERL MALAYSIA) A-187

265 ANNEX F: SAFETY REGULATIONS FOR STATION MANUAL Work Safety and Occupational Health Safety in the workplace should be consistent with Thai safety laws and regulations as well as following international best practices. Some of the relevant guidelines are included in the following documents: o THAI Safety Law Regulations o OHSAS British Standard (Occupational Health and Safety Standards; compliance with these standards will assist organizations to achieve ISO certification) o SAFETY RULES & REGULATIONS o EQUIPMENT SUPPLIERS MANUALS (e.g. Rolling Stock) The following are the major areas where safety regulations need to be specifically addressed in the SRT Station Manual: Management Responsibilities o Quality and Safety Manager o Safety Committee o Department Manager / Division Manager o Supervisor / Foreman o All Employees o Subcontractor Work Safety Implementation and Control o Training o Certification o Compliance o Public Notices and Signs o Escape, Access, and Traffic Routes o First Aid o Authorisation to Work General Safety Rules o Conduct of Staff o Access to SRT s System o Behaviour On or Near Track o Behaviour On or Near Rail Vehicles o Fire Prevention and Fire Fighting o Personal Protective Equipment o Housekeeping Performance of Maintenance Work o General Maintenance Work o Work on Rail-Vehicles o Work On or Near Clearance Gauge of Track o Work On Electrical Systems o Work On Stations o Work On Lifts o Work On or Near Alarm and Control Systems A-188

266 General Maintenance Work o General o Work with Compressed Air/High Pressure Clean. Tools o Work on Batteries o Work on Pressurised Systems o Work in Confined Spaces o Work at Height o Hot Work Work On Electrical Systems o General o Work Near Electrical Systems o Measures After Work on Electrical Systems is Completed o Voltage Test and Earthing Working Processes o Welding o Grinding o Lathing, Milling, Drilling, Sawing o Lifting o Storing and Stacking o Testing / Taking Equipment into Service Welding o General o Welding in Areas with a High Risk of Fire or Explosions o Gas Welding, Cutting, and Heating o Storage and Handling of Gas Cylinders o Electric Arc Welding and Cutting o Thermit Welding Maintenance Equipment o General o General Equipment o Workshop / Rolling Stock Equipment o Fixed Installations Equipment and Tools General Equipment o Hand Tools o Power and Portable Electric Tools o Scaffolds o Ladders o Industrial Trucks o Fork Lift Truck o Company Road Vehicles Moving of Rail-Vehicles o Moving of Rail-Vehicles in the Workshop Area o Moving of Rail-Vehicles within a Possessed Track o Making Sure a Rail-vehicle is Safe to be Moved o Moving Rail-Vehicles with no Brakes o Securing of Rail-Vehicles o Securing of Rail-Vehicles without Brakes o Testing of Rail-Vehicles on the Running Line o Road Traffic in Workshop / Depot A-189

267 Dangerous Goods o General o Degreasing Agent o Coolant/Lubricant o Hydraulic Liquids o Diesel Refuelling o Adhesive Substances Protection of the Environment Main Safety Rules - Behaviour On or Near Track 1. Behave in such a way, that you will not be endangered by the Rail-vehicle operation. 2. Wear high visibility vests when entering the track. 3. Walk and stand clear of the tracks when conditions permit. Use established walkways, overpasses, and pedestrian crossings to cross tracks whenever possible. 4. Be continually alert for approaching Rail-vehicles. Look in both directions and leave track way upon the approach of Rail-vehicles. 5. Expect Rail-vehicle movement at any time, on any track, and in any direction. 6. Never sit, stand, or walk on top of the rails. 7. Never step or stand on the track switches, turnouts, and operating components. 8. Do not cross tracks immediately after a Rail-vehicle has passed, but wait until adjacent tracks can be observed in both directions for a safe distance. 9. Do not cross the tracks directly in front or be-hind standing Rail-vehicles unless necessary for the coupling procedure. Use extreme caution and observe adjacent track when doing so. 10. Do not cross between standing coupled cars by climbing over or under cars or couplings. 11. Stay clear of all operating equipment whether it is in motion or idle unless you are authorised to do so. 12. Tools must be laid down away from passing Rail-vehicles. For storing things along the track a safety distance of at least 0.5 metres to stationed Rail-vehicles must be kept. 13. Do not touch things that are in contact with live parts of the third rail or the current collectors (e.g. branches, metal parts). 14. Do not make a connection with live parts by pouring or spraying water or other conducting liquids. 15. Never sit or stand on the third rail cover board or hang articles from the third rail support stands. 16. Do not enter the viaduct alone. 17. Do not touch or work on the running rails during a thunderstorm Main Safety Rules - Behaviour On or Near Rail-Vehicles 1. Unauthorised persons are not allowed to stay on Rail-vehicles. 2. Do not board or leave any Rail-vehicle while it is in motion. 3. Do not walk from one Rail-vehicle car to an-other when the Rail-vehicle is in motion and where gangways or safety chains are not in place. 4. Do not stay near door openings if doors are not closed and locked. 5. It is prohibited to stay on running board, roof, or load when the Rail-vehicle is in motion. 6. Never physically attempt to stop a rolling Rail-vehicle. 7. Before leaving a Rail-vehicle make sure it is safe to do so. 8. Do not lean out of Rail-vehicles. 9. Do not throw or drop items out of Rail-vehicles at any time. A-190

268 10. It is only allowed to pull or push Rail-vehicles by hand on a level track, from the side of the Rail-vehicle, and by using the prescribed equipment. 11. It is prohibited to change turnout position, immediately before or while a Rail-vehicle is passing. 12. Persons who are endangered by moving Rail-vehicles have to be warned Safety measures for protection of the work on Track A-191

269 JICA S POST EVALUATION OF THE SRT TRAINING CENTER PROJECT Outline of the Project Country: Thailand Project title: The Railway Training Center Project Issue/Sector: Public Utilities (Railway) Cooperation scheme: Project-type Technical Cooperation Section in charge: Railway Training Center Training and Development Bureau Total cost: 580 million yen o Period of Cooperation June 1, 1992 May 31, 1997 (Original Project) April 1, 2001 March 31, 2002 (Aftercare Program) Partner Country's Implementing Organization: State Railway of Thailand Related Cooperation: N/A 1.1 Background of the Project APPENDIX 25 The State Railway of Thailand (SRT) established a policy to develop an effective training system to meet the needs of proficient staffs due to the future expansion of the organization. However, the existing technical training equipments were inadequate and obsolete. Therefore, SRT, in 1992, submitted a request to Japanese Government to launch a technical cooperation project called "Railway Training Center Improvement Project", aiming to modernize the Railway Training Center (RTC) with up-to-date training facilities and curriculums. During the original Project, the Japanese Government contributed about 3 million US-dollars worth of equipments and developed 21 technical training curriculums for 6 fields which are Train Operation, Rolling Stock, Transportation, Maintenance of Permanent Way, Signaling and Telecommunication. There were total of 10 long-term and 38 short-term Japanese experts dispatched to Thailand, and 26 counterparts trained in Japan. The Aftercare Program was implemented 4 years after completion of the Project. The main outcome from this program was the development of the First Aid and Quick Recovery Circuit Training Software for the General Electric Articulated locomotive (GEA locomotive) in which SRT staff could use as a personal trainer to improve personal skill in GEA locomotive operation. This program involved 5 short-term Japanese experts visited Thailand, and 1 counterpart trained in Japan. 1.2 Project Overview The Japanese Government provided necessary training equipment, short-term and longterm experts, training programs for SRT staffs to be trained in Japan, as well as assistance in developing more effective training curriculums for SRT. On the other hand, training and practicing locations along with staffs to work with Japanese experts were provided by SRT. (1) Overall Goal The State Railway of Thailand (SRT) is able to implement training, which copes with modern facilities and technologies at the Railway Training Center (RTC). A-192

270 (2) Project Purpose SRT staffs obtain knowledge with regard to new technologies and facilities, including the knowledge on equipment maintenance and troubleshooting in 6 fields as follows: a. Train Operation b. Rolling Stock c. Transportation d. Maintenance of Permanent Way e. Signaling f. Telecommunication (3) Outputs 1) Training is provided to SRT staff emphasizing on knowledge for planning, coordinating and implementing training courses. 2) Training facilities and equipment are installed and maintained properly. 3) SRT staff are trained to maintain equipment. 4) Training materials are prepared, including 47 titles for 21 training courses. (4) Inputs Japanese Side: Long-term Experts 10 Equipments 120 million bath (392.4 million yen) Short-term Experts 38 Local Cost 13 million baht (42.4 million yen) Thai Side: Project Director 1 Counterparts 26 Project Committees 11 Facilities Renovation Cost 33 million baht (106 million yen) Project Secretaries 3 Local Cost 10 million baht (32.8 million yen) 2. Evaluation Team Member of Evaluation Team Dr. Sarawoot Watechagit Kaihatsu Management Consulting (Thailand) Ltd. Period of Evaluation 3 October January 2006 Type of Evaluation: Ex-Post Evaluation 3. Result of Ex-Post Evaluation 3.1 Summary of Ex-Post Evaluation Result (1) Impact The impact in terms of the technical aspect attained by the overall goal is high. By using experiences and knowledge obtained from the Project, RTC has developed more new training programs by expanding the 21 programs at the time of the Project completion to currently 28 programs which incorporates all 9 courses developed during the Project with more courses. 47 textbooks developed during the Project have been improved and modified to be a main reference for many related courses including some courses in the newly developed training program. Due to the effectiveness of the developed training program, it has also expanded to the regional stations, but as an on-the-job or on-site training basis. A-193

271 Nonetheless, the courses or topics to be trained at the regional stations are arranged upon requested basis depending on the types of problems currently found from the locomotive operation at the regional stations. (2) Sustainability The organization aspect was evaluated and concluded as high. The major structures of the SRT and the RTC have not been changed, except the RTC position. Since 2002, the RTC has been controlled by Personnel Department under the Administrative sector so that the training programs could be properly arranged for all staffs. Counterparts who were trained in Japan have been promoted to a higher rank in the SRT organization, where the knowledge from the training programs could be beneficial for better decision making as well as better organization's policy development. The privatization of the SRT has not started and will be further discussed once any flaws regarding to the current administrative system including the budget allocation problems are considered to be resolved. The technical aspect is considered also as high. The technical resources from the outcomes of the Project have been well utilized and maintained including 120 laboratory equipments, 47 textbooks and the troubleshooting software are still in use and have been good resources for staff to gain personal knowledge for any particular area of interests. Moreover, more new training programs have been developed. The Personnel Development aspect is evaluated as low due to the change of the recruitment policy causing the sustainability in question. Due to the lacking of personnel, most of the training program for newly recruited staff could not be fully implemented. The Financial aspect is considered as low. Since the terminal of the Project, the SRT has not fully supported the RTC. The budget for maintaining lab equipment is totally cut, and the budget for operating training programs is decreased. Therefore, the RTC has been in a difficult time of trying to maintain training facilities and running the training programs. 3.2 Factors that Have Promoted Project (1) Impact Both short-terms and long-terms experts laid a good background on the development of the training programs such that the newly developed curriculum has been formulated in a systematical way, and ensured to fit the current technical needs. (2) Sustainability The inclusion of the RTC to the Personnel Department under the Administration sector amplifies the importance of the RTC' role and encourages the RTC to develop more thorough training programs to meet every knowledge need of the staffs. The competencies of RTC's staffs and former counterparts were recognized among SRT's staffs. They have relied on their obtained knowledge and personal skills to manage and improve the RTC in a systematical way, such as the development of new training programs for every level of staffs or the maintenance of all equipment under the budget deficiency situation. Regional staffs are also well equipped with technical knowledge by the on-the-job training program and the use of the troubleshooting software for personal training and as a quick reference. 3.3 Factors that Have Inhibited Project (1) Impact The policy factor regards to the new recruitment policy produces zero newly recruited staff since the completion of the Project. The lacking of personnel prohibited the proper A-194

272 implementation of the training program due to the problems with the reduced number of attended trainees, and the shortened duration of the training program. (2) Sustainability The change for the recruitment policy caused the lacking of personnel as stated. If this problem persists, the future of the RTC will be in questioned, since there will be no trainees for any courses. The financial factor mainly regards to the budget deficiency for maintaining the equipment. The budget deficiency prohibited improvement of training materials and facilities. Averagely about 50% or less of the requested budget for maintaining equipment is approved each year, which can be used for minor parts replacements or repairs. 3.4 Conclusion After the Project completion in 2002, The impact of the Project in terms of the attainment of the overall goal is high. This accounts for the ability of the RTC to maintain and improve the training facilities established during the Project. By using experiences and knowledge obtained from the Project, RTC has developed more new training programs by expanding the programs developed during the Project to more programs and more courses. All textbooks developed during the Project have been used for the related courses, and as a reference to develop new. Due to the effectiveness of the developed training program, it has also expanded to the regional stations, but as an on-the-job or on-site training basis. Therefore, the impact in terms of the technical aspect attained by the overall goal is high. The sustainability of the Project in the areas of organizational and technical aspects is high. The current organization structure where the RTC is controlled by the Personnel Department amplifies the importance of the RTC in such a way that both newly recruited and existing staffs can be trained in a systematical way. For the technical aspect, the RTC is able to maintain training facilities regardless of the budget deficiency problem, also able to expand the training programs using courses and facilities provided by the Project. The sustainability in the area of personnel development and financial aspects is contrarily low due to the change of the recruitment policy, and the shortage of financial support from the SRT, respectively. Factors promoting the Project include the Japanese experts who laid a good background on the development of the training programs, the inclusion of the RTC to the Personnel Department, and the competencies of RTC's staff and counterparts to further improve the RTC's operation by relying on their obtained knowledge and personal skills to manage and improve the RTC in a systematical way, such as the development of new training programs for every level of staffs or the maintenance of all equipment under the budget deficiency situation. Factors inhibiting the Project in both impact and sustainability aspects are the financial deficiency, and the change of recruitment policy. They were however the effects from the policy change which are beyond the control of the Project, i.e., external factors of the Project. 3.5 Recommendations FOR JICA: JICA may need to discuss with SRT regarding to the situation of the annual fund for RTC. The study found that there should be an agreement between JICA and SRT which indicated that SRT should provide necessary amount of fund such that all equipment provided by the Project would be well maintained, upgraded or improved after the Project completion. But currently the budget for RTC is one of major concerns as stated. A-195

273 For SRT: RTC needs to be supported and promoted by SRT or the Ministry of Transportation such that its potential is recognized throughout the Asia Pacific region, in order to fully utilize RTC's capability, developed training courses and programs, and other facilities provided by the Project. After all, the RTC has had strong background in locomotive training, knowledgeable staffs, and modern training equipment based on the help from the Project. This can open a chance of further developing RTC to be a regional training center for all countries in Asia Pacific area. SRT needs to reconsider the recruitment policy. The current one may lead to more problems both in the technical aspect and the management system due to the lacking of knowledgeable staffs in RTC. SRT needs to approve fund for RTC to set up a more concrete and useful training program for regional substations, if the current recruitment policy cannot be altered. Currently, the onthe-job training basis can only temporarily solve the problem. Thorough training for staffs still needs to be done for effective administration system of RTC. 3.6 Lesson Learned To promote sustainability, the Project should have provided guideline to modify the provided equipment such that they can be further utilized for some other related applications when applicable. Based on the study, some equipment such as the Driving Simulator and the troubleshooting software were developed only for a certain locomotive, specifically the General Electric locomotive. The Project should have provided guideline to modify this equipment such that they can also be used for some other locomotives of the SRT's fleet such as HITACHI locomotive, etc. For the Project or any other project which involves developing a training program, during the period of planning the related curriculum, factors such as the duration of training program, the number of instructors, the number of trainees, budget, etc., and the variation of these factors in the future, should as well be considered, besides the consideration of the technical aspects of the program. The programs should have been formulated by considering also the amount of staffs for the future situations such that it can ensure the benefit of the training program reaches all staffs under any circumstance. Based on the evaluated Project, the developed training programs were established by considering mainly the technical needs. However, under the current situation, the technical knowledge of the RTC is concrete, but there is no trainee attending the training program. This is because the training program was not planned for a zero trainee situation. Most of hardware and software equipment provided by JICA during the Project were directly procured from Japan. Hence, it is very difficult to find an agent to repair or obtain any spare part when some of them are broken or malfunction. Therefore, it might be more convenient if only necessary and limited numbers of equipment acquired from Japan. This could reduce maintenance problems after the Project completion. A-196

274 APPENDIX 26 STUDY TOUR AGENDA AND LIST OF PARTICIPANTS Improvement of Railway Passenger Services Capacity Development Technical Assistance Study Tour to Kuala Lumpur Agenda 11 November 2013 Airport Rail Link Station Presented by ERL & EMAS 11 November :00 13:30 Tour of KLIA station Travel to KL Sentral by Airport Ekspres 14:30 16:00 At KL Sentral: Briefing and Q & A session about Airport LInk Airport line operations overview Description of the facilities and services offered at the station Station staffing (primary duties/ extent of any outsourcing) Ticketing procedures and transfer of cash to bank Visit to city check and train operations area 12 November 2013 Kuala Lumpur Sentral Station 10:00 12:00 Presented by SEMASA KLS as Transportation Hub Responsibilities SEMASA Responsibilities of rail operators Description of transport operators at KLS Description of management of KLS station/shareholders Design philosophy of KLS Ongoing development of KLS and surrounding area Future development plan for KLS Relationship between rail operator and KLS management Flow of payments and service agreements between rail operators and SEMASA Describe KPI s included in these service agreements A-197

275 12:00 14:00 Lunch 14:00 16:00 Presented by KTMB General Overview of KLS Station visit and general overview Number of trains/passengers per day Visit to KLS maintenance depot under the station Delegate Name List First name Last name Position Organization/ Department 1 Mr. Voravuth Mala Marketing Manager Marketing 2 Mr. Tanongsak Pongprasert Deputy Traffic Manager (Operation) Traffic 3 Mr. Sakchai Subjaitieng Chief, Development and Traffic Traffic Planning Division 4 Mr. Prasit Jindasri Chief, Passenger Division Traffic 5 Ms. Pattarasuda Namasatr Chief, Marketing Division Marketing 6 Mr. Virat Keowthong Chief, Passenger Sales Division Marketing 7 Mr. Chaiporn Prasertsri Chief, Passenger Sales and Service 1 Marketing Section 8 Mr. Chitkamon Pondate Chief, Marketing Development Section Marketing 9 Mr. Khanchit Inmuang Traffic Officer 6 Traffic 10 Mr. Yotin Chantorn Security Section Manager Airport Rail Link A-198

276 Improvement of Railway Passenger Services Synopsis: The objective of this capacity development technical assistance (CDTA) was to prepare strategic planning framework for the development of the State Railway of Thailand (SRT) passenger services. Specifically, the scope of work included three main components: (i) review existing SRT passenger demand forecasts and identify new commercial passenger service opportunities; (ii) prepare a draft SRT passenger station management and operations manual; and (iii) prepare a road map, implementation plan, and strategy framework for upgrading SRT passenger service. The project commenced in August 2013 and concluded in March During August November, extensive discussions were held with SRT officials as well as major stakeholders and critical issues facing SRT were presented and discussed in detail. The Consultants identified a range of problem areas within SRT and made specific recommendations. The issues, which have existed for many years in SRT have contributed to the poor condition of much of its infrastructure and rolling stock as well as the troubling high number of accidents each year. This situation has prompted declining confidence in SRT by customers and stakeholders alike. The lack of historic investment and maintenance have contributed to this circle of decline and strong and positive actions are needed to break this decline. The Consultants identified specific short and medium term actions that would professionalize the SRT organization making it more responsive to the challenges of the transport market in Thailand. In terms of priority, the establishment of the Safety Task Force was identified as the number one priority of short term recommendations. It is also recommended that SRT begin the process of establishing a Project Management Organization (PMO). A strong PMO will be essential to enhance SRT s capability to manage and bring to successful conclusion for many major capital projects that are necessary to upgrade the infrastructure during the coming years. Several roundtable sessions were held with SRT staff where the Consultants ideas and recommendations were presented and discussed in detail which resulted in concurrence with the essence of the report s content and conclusions. In addition, passenger and station surveys were undertaken, a draft station manual prepared and specific action plans identified for each station for improvement of facilities and procedures.