The State Railways of Thailand (SRT) is reviewing its land lease rates nationwide as it seeks a public-private venture to develop land along the Red Line electric rail route and the high-speed railway linking Bangkok with Nakhon Ratchasima.

SRT governor Wutthichart Kalayanamitr said over 3,000 lease contracts have expired and the SRT is assessing new lease rates and looking for ways to better manage its land.

Sasin Graduate Institute of Business Administration at Chulalongkorn University is carrying out the assessment.

Photo taken last month shows the progress of construction of the Red Line network from Bang Sue to Rangsit. (Photo by Wichan Charoenkiatpakul)

Mr Wutthichart said the current rates are too low and need tweaking.

When the new structure of lease rates is announced, they will apply to new lease contracts, he said.

The SRT needs to set new rates before it can negotiate with parties interested in signing agreements over the long term.

SRT map shows the Red Line plans

"The new lease rates will better reflect the real values of land in the market," said Sarawut Benjakul, chairman of the SRT board.

He said the board had previously agreed the SRT must report on progress of the Sasin assessment study and the lease contract renewals to the board every two weeks.

Also, the SRT governor said the SRT now groups its plots of land into two categories, large and small.

While it is revising the rates for the small land plots, the SRT has decided to seek a form of public-private partnership to develop the large tracts of its land for commercial purposes.

As for the SRT's intention to assume the operation of the Red Line, from Bang Sue to Rangsit, Mr Wutthichart said the State Enterprise Policy Office (SEPO) wants the SRT to submit a detailed plan on how it will manage the Red Line operation.

Mr Sarawut also said it will be difficult to make a profit from the train service on the Red Line and the Bangkok-Nakhon Ratchasima high-speed rail routes alone. A large chunk of profits should come from developing the land along the routes as well, similar to what is done in other countries such as Japan and Hong Kong.

Last month, Japan expressed an interest in investing in commercial property developments along the Red Line around the future Phahon Yothin transport hub, which is likely to attract extensive business interests with commercial complexes planned.

One of the projects that will link to the hub is the so-called Phaholyothin Centre. The centre is set to feature a department store, hotel and recreational areas.