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Published on November 14, 2007

The October 31 strike by al-most 400 rail workers and

locomotive engineers disrupted rail transport throughout the Kingdom. Passengers and businesses suffered inconvenience and losses, while the reputation of the State Railway of Thailand (SRT) suffered.

Deputy Transport Minister Sansern Wongcha-um was forced to end the work stoppage by signing an agreement not to find fault with any of those behind the strike. This reflects the SRT's failure to reform the enterprise despite high hopes by the Finance Ministry to restructure it for higher operating efficiency. The agreement not to investigate the industrial action also let influential groups behind it continue to bargain for their benefits at the expense of the public interest.

An SRT source said the military-installed government should act decisively to restructure the SRT, because now was a good time to do it. Countries like the UK or Japan have gone through such a transition smoothly, and these days their state railway is the heart of public transportation.

On the day when 394 workers walked out, the SRT board prepared to handle the situation by coordinating with nearby military to take control

and prevent the strikers from marching. The source said the board was ready to take disciplinary action against the

strikers and reward those who would return to work. But the ministry dared not make that decision. Later on, the minister succumbed to the labour union's demands.

"It was the end of the attempt to end the SRT crisis," the source said.

Most of the SRT board members were trying to push for reform of the SRT, in order to boost service efficiency and reduce the state agency's Bt51.2-billion debt burden, the source said.

Under the restructuring, SRT managers worked together to promote

transparency in operations and were fairly compensated for their efforts. However, the efforts faced obstacles not only in resistance from the SRT's labour union, but also from the board chairman and deputy transport minister - decision-makers who dared not push reform efforts. This has forced the SRT to adjust its reform plan to please its union.

The SRT source said since the agency became a state enterprise 55 years ago, its operation has seemed to step backward. This is especially true compared with Japan's state railway, which was set up at about the same time and has shown considerable progress by developing its technology and services.

Japan has 27,666 kilometres of

railway, 39.79 per cent (11,007km) of which are double-rail. More than 60

per cent of the railways are electrified, while 192 companies operate a train service.

However, in Thailand the SRT still monopolises train service. Thailand's railways extend only 4,000km, 93 per cent of which are single-track.

Over the past 50 years, only 555km of new track have been laid, with only 234km of that double-rail. The SRT has loans of Bt51.2 billion outstanding, plus interest of Bt1.85 billion and pension expenses of Bt2.4 billion annually. It faces future pension liabilities of Bt160 billion a year.

The SRT has more than 12,400 retirees on its pension roll and more than 13,000 staff eligible for future pensions. That means the agency has been running in the red for many years. Last year, SRT took a loss of Bt6.57 billion, and that is expected to rise to Bt10 billion annually in the next three years.

This shows the enterprise is a complete failure, but the Finance Ministry is determined to keep it going.

"We cannot just fold the agency, because the SRT is needed for logistics, so it's imperative for us to reform the agency," a Finance Ministry source said.

Rail transport is one-ninth cheaper than road transport but not as popular among passengers.

Passenger numbers have dropped from 56.32 million in 2001 to 52.04 million last year, an average of 2 per cent a year. In the past five years, the SRT has witnessed more than 500 accidents, considered an inefficient rate. Out of a workforce of 10,000, more than 1,800 are in inactive positions. Only 2,000 are involved in driving trains.

The SRT also fails to operate its assets efficiently, especially real estate. Even though it owns 233,858 rai nationwide, 38,604 rai of which are not used for rail, the agency earns only Bt900 million a year from the land, because previous SRT executives entered into bad lease agreements with the private sector.

The Finance Ministry source said the ministry had planned to reform the agency by offering assistance in three areas. First, financial affairs, in which the government would have helped the enterprise clear Bt39 billion worth of debts.

Second, freight operations, in which the ministry would have assisted the SRT in improving cargo transport services, which would have required infrastructure investment of Bt285.36 billion over 10 years.

And third, human resources, in which the SRT would have reorganised its work processes, in order to eliminate duplications.

The source said the Transport Ministry changed the plan after resistance from SRT staff.

"If we cannot reform the SRT under this military government, it will be an almost impossible task during the upcoming coalition government, because political intervention will make it difficult," the source said.

Watcharapong Thongrung

 The Nation