Cabinet Approves 18 Billion Baht Loan for State Railway

The Cabinet approved the State Railway of Thailand (SRT) to borrow 18,000 million baht as working capital to support operating expenses, with SRT bearing responsibility for principal, interest, and borrowing costs. Deputy Spokesperson Ploythale Lakkhamsaengchan announced that the Cabinet endorsed SRT's borrowing under Section 39(4) of the State Railway of Thailand Act B.E. 2494, designating the Ministry of Finance as guarantor and tasking officials with determining suitable borrowing methods, conditions, and details. The loan aims to finance operations where revenue falls short of expenditure in fiscal year 2027, with the 18,000 million baht ceiling approved by Deputy Prime Minister Pichai Ratchakitprakarn for the Ministry of Transport to propose. SRT can execute the borrowing after the amount is incorporated into the fiscal 2027 public debt management plan and obtains all necessary approvals. Regarding a request to waive borrowing fees, SRT is to follow relevant legal procedures and regulations. Ploythale noted SRT has faced persistent deficits as revenue is allocated to debt service, infrastructure maintenance, rolling stock upkeep, operating costs, and pension obligations. In fiscal 2026, cash outflows exceeded inflows by 18,000 million baht, creating a liquidity crunch that necessitated Cabinet approval for borrowing to restore liquidity and fund fiscal 2027 operations. SRT will shoulder all repayment obligations with the Finance Ministry as guarantor, while authorities will identify funding sources and structure terms appropriately. The Ministry of Transport reported that the Public Debt Management Office, Budget Bureau, and Office of the National Economic and Social Development Council have reviewed the proposal and raised no objections, offering additional input for next steps.