PPP model planned for Purple Line

       The government will use a public-private partnership (PPP) model for train operations and signalling systems used with the new Purple mass-transit rail line in Bangkok.
       Talks have already been opened with four or five Japanese trading conglomerates about investing in the 50-billion-baht Purple Line, said Theeraj Athanavanich, director of the public infrastructure financing bureau of the Public Debt Management Office (PDMO).
       The PDMO plans to use the PPP model for two phases of the Purple line, covering train operations and investments in the signalling system, which combined are projected to cost 13 billion baht.
       Mr Theeraj said the PDMO would sound out potential investors worldwide about participating in the programme later this year.
       Under a PPP, the private sector enters into a contract with a public authority to provide a service or project in return for set compensation. The contract typically stipulates minimum service quality that the private operator is obliged to provide over the term of the agreement.
       Mr Theeraj said that while the process of opening bids for a contractor for Purple Line currently was under way, the PPP guidelines for the two elements of the project must be done in advance, as it may take at least 12 to 15 months before completion before going before the cabinet.
       The Mass Rapid Transit Authority has already awarded a 14-billion-baht construction contract for the Purple Line to CKTC, a joint venture between Ch.Karnchang and Tokyo Construction.Sino-Thai Engineering won a second contract worth 13 billion baht, with Power Line Engineering willing a third contract worth 5 billion.
       Two of the contracts have yet to be signed, and are awaiting final approval from the Japan International Cooperation Agency, the lender for the project.
       Mr Theeraj said potential bidders for the PPP projects had already expressed the view that the Thai government may have to offer guarantees on revenues and ridership to attract interest.
       Ultimately, the government may have to offer subsidies to operators to help keep fares low to encourage public use,while at the same time giving a fair rate of return to the private operator.