Makkasan development gets schedule

The aerial view of Makkasan area. (Bangkok Post file photo)

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An auction to seek developers for a prime land plot owned by the State Railway of Thailand (SRT) in Bangkok's Makkasan area is expected by early next year.

The decision follows a recent agreement between the Treasury Department and the SRT over the lease period.

Under the deal, the department will lease 497 rai of land for 99 years from the loss-ridden SRT in exchange for clearing 60-70 billion baht of the latter's debt.

The department will conduct a study of the details of the project's development and lay down terms of reference, said Finance Minister Sommai Phasee.

Development of the SRT's Makkasan plot had earlier hit a snag over conflicting appraisal values. The SRT appraised the land at 250,000 baht a square wah, while the Treasury Department assessed it at 115,000 baht a sq wah.

The market price of other land plots in the area is 210,000 baht a sq wah.

Moreover, the SRT wanted to grant the Treasury Department a lease of 30 years and a renewal of 30 years, but the Finance Ministry argued that the period was too short.

Given that current law caps the lease at a maximum 50 years, the government is amending the related legislation to pave the way for the deal.

Under a preliminary development plan, 150 rai is to be developed as a public park, with 30 rai for a museum and 317 rai for commercial purposes.

The commercial development will be split into two phases of 140 and 177 rai. The second phase will begin development two and a half years after the first phase starts.

The 700-rai Makkasan plot consists of a large swamp and 497 rai of land that can be developed. The property includes the Airport Rail Link's Makkasan station and an SRT hospital.

The Makkasan lease is part of the Finance Ministry's plan to clear some of the SRT's hefty debt.

The SRT is among seven financially troubled state enterprises that are required by the State Enterprises Policy Commission to undertake a business rehabilitation plan.

The Finance Ministry intends to move 720 billion baht in debt from state enterprises' balance sheets to the government's own.

The ministry is drafting a bill to fiscalise state enterprise debt incurred under previous governments' policies and use the proceeds arising from selling shareholdings in state enterprises to pay the debt.

Under the bill, the payoff period for the debt will be lengthened to as much as 20 years to allow greater flexibility.

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