Bangkok’s Skytrain is facing financial uncertainty unless its creditors agree to a debt restructuring plan that includes writing off massive accrued interest, reported the Associated Press.
Bangkok Mass Transit System (BMTS), the private company operating the Skytrain, owes about $850 million to Thai and international creditors, about $580 million of which is U.S. dollar-denominated loans, reported the AP.
The BMTS hopes to have a restructuring plan in place by the end of the year. The plan includes writing off a $122 million accrued interest and 25-year repayment on the principal at an interest lower than the minimum lending rate. The BMTS also wants at least 35% of the debt to be converted into equity and conversion of the U.S. dollar loan into baht, said the AP.
The Skytrain opened in December 1999 as a solution to commuter gridlock. The system did not live up to expectations, partially due to expensive tickets and a limited reach. Fares on the system range from 25 cents to $1.10 compared with 12 cents on a bus.
The company, the only private commuter system in Asia, needs 650,000 passengers to make a profit, said the AP. Ridership is currently about 280,000, up from about 160,000 in December 2000.