SUBWAY STATIONS : Crash leaves retail plans in limbo

News

Accident probe must come first: MRTA

Two days after the embarrassing accident that left 200 passengers injured, Bangkok Metro Co Ltd (BMCL) suffered another blow yesterday when the subway concessionaire decided to postpone approval of its commercial development plan.

After a Mass Rapid Transit Authority board meeting, MRTA governor Prapat Chongsanguan said all matters involving BMCL would be delayed until the Transport Ministry-commissioned investigation team produces a report on the accident.

“Everything concerning BMCL will thus be on hold,” he said, adding that MRTA will also see if BMCL violated any clauses of its concession, by allowing the accident to occur.

BMCL was expecting its plan to be approved yesterday.

The plan will allow it to develop commercial areas in all subway stations, which should generate about Bt270 million in annual revenues.

The delay came despite BMCL agreeing to pay MRTA 7 per cent of the dividends it receives from subsidiaries operating some of the commercial areas, as well as proceeds from the future sale of its subsidiaries’ shares.

BMCL operates the lone Hua Lamphong-Bang Sue subway route.

Earlier yesterday, Napat Charoenkul, commercial development manager of BMCL, had been confident that the months-long-delayed plan would be approved.

“Our polling shows 90 per cent of respondents are committed to using the service again,” he said.

Napat said that the company hoped to iron out all “wrinkles” eventually and proceed with its plans.

The development plan involves four main segments. Part of the plan calls for selling advertising space in designated areas through Trias Network Co Ltd, of which BMCL owns 60 per cent.

How Come Entertainment Co Ltd, which counts among its shareholders Prime Minister Thaksin Shinawatra’s eldest son Panthongtae, is slated to install television screens that will air advertisements while commuters wait for their trains.

Another company, Metro Mall Co Ltd, which BMCL owns 54 per cent of, would be in charge of leasing commercial space to retailers.

Meanwhile, BMCL will install at its own expense telecommunication equipment that allows mobile-phone users to make and receive calls.

Mobile-phone operators will have to share their revenue with the company if they want to provide service in the underground netqwork.

Once all are in service, it is estimated that Trias will see an additional Bt300 million in annual revenues; Metro Mall, Bt600 million annually; How Come Entertainment, Bt50 million-Bt60 million; and mobile phone networks, Bt150 million.

In the first five years, all of these units except How Come would remit 25 per cent of their pre-tax revenues to BMCL, and 7 per cent of BMCL’s take would be given to MRTA.

In the next five years, BMCL would be entitled to 35 per cent and MRTA will still get 7 per cent off those revenues.

How Come would remit 10 per cent of its first Bt100 million in subway-related revenue to BMCL. For the next Bt100 million, the company would pay 15 per cent.

The subway has been operating for six months, but without the approval to develop its commercial areas, the operator has still not been given full access to retail space at its stations due to conflicts over revenue sharing.

While wrangling continues, the MRTA has barred the company from making use of the areas.

It cannot, for instance, install the communications system necessary to enable mobile phone calls inside the subway.

As a result, the company has not made one baht from these areas.

Published on January 20, 2005

Watcharapong Thongrung

The Nation

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