Van to microbus switch plan tipped for B25bn loan boost

Almost 25 billion baht could be lent to passenger van operators to switch to microbuses, transport deputy permanent secretary Somsak Hommuang says.

He was speaking following a meeting to iron out measures to offer financial assistance to van operators who want to replace their vehicles with 20-seat microbuses.

It is now certain that financial institutes, including banks, will offer loans with 3-5% interest rates to operators, which must be either juristic persons or cooperatives, Mr Somsak said.

Siam Commercial Bank offers loans at the lowest annual interest rate of 3%, he said, adding Deputy Transport Minister Pichit Akrathit will call a meeting next Monday to wrap up measures concerning the issue.

According to Mr Somsak, domestic automakers have agreed that a suitable price for a microbus is between 1.7 million and 2.2 million baht.

A down payment of 25% of the price of a microbus with a 5% interest rate per year, along with a seat occupancy rate of 60% per trip, would mean an operator could reach break-even point in less than three years against a seven-year concession contract, he said.

The Thai Credit Guarantee Corporation is ready to be a guarantor for loans given to microbus operators which are juristic persons.

Mr Somsak said the switch from commuter vans to microbuses is Transport Ministry policy which must go ahead, adding the move is aimed at boosting the safety of transport and reducing road accident deaths.

Van service concession contracts will not be extended and the operators must switch to microbuses instead, the deputy permanent secretary said.

By 2022, the concessions for operators of 11,194 commuter vans, or 70% of those in service, will have expired, and around 24.6 billion baht in loans could be used in the switch, Mr Somsak said.

The Department of Land Transport (DLT), meanwhile, has been asked to organise new routes to ensure microbus providers have a seat occupancy rate of at least 60% a trip.

According to Mr Somsak, the Land Transport Federation of Thailand told the DLT it is ready to buy vans from the operators for 550,000 baht each, a sum which operators could use as a down payment for a new microbus.

Mr Somsak said the Transport Co will spearhead a pilot microbus service for the public.

Nopparat Karoonyavanich, vicepresident of the Transport Co, said his company is waiting for clear guidelines on microbus prices and financial assistance from the Transport Ministry.

It plans to buy 55 microbuses to provide the service.

The service is unlikely to start on July 1 as earlier scheduled, he conceded.