Page 255 - BTSGroup ONE REPORT 2021/22_EN

BTS Group Holdings Public Company Limited
Annual Report 2021/22
The Group is engaged in the provision of operation, maintenance
and train procurement services under the Operating and Maintenance
agreements for extension line - Silom and Sukhumvit (“Extension Line
Phase No.1”) and for the Green Line (Mochit-Sapanmai-Kukot and
Bearing-Samutprakan) (“Extension Line Phase No.2”), and the purchase
and installation of operating system (electric and mechanic) agreement
for the Extension Line Phase No.2. Between the year 2017 and 2020, the
Extension Line Phase No.2 gradually commenced operation. Meanwhile,
the National Council for Peace and Order issued order No. 3/2019
regarding the operation of the Green Line as described in Note 1.2.1
e) to the financial statements, to require the Ministry of Interior to set
up a committee to establish criteria for sharing train-fare benefits and
other criteria for a combination of the Green Line and its extensions.
The committee is to negotiate the criteria with the Group within the period
stipulated in the order. The Group has prepared a draft amendment of
the concession agreement for the operation of Green Line, whereby
the Group will be responsible for specified obligations and bear the
long-term operating risk in exchange of claiming outstanding debts from
the government authority. The negotiation was completed in July 2019
and approval is being sought from the Cabinet, in accordance with the
procedures set out in the order. Since Krungthep Thanakom Company
Limited (“Krungthep Thanakom”) which is an enterprise of the Bangkok
Metropolitan Administration (“BMA”) is still waiting for the conclusion
from the Cabinet regarding approval of the draft amendment of the
concession agreement for the operation of Green Line, the Group has
not received the payment in full amount of debts under the Operating
and Maintenance and the purchase and installation of operating system
(electric and mechanic) from Krungthep Thanakom.
As the Extension Line Phase No.2 gradually commenced operation, the
Group operated the train services for the new stations that had been
completed, which is inconsistent with the schedule for operation and
operation of train services stipulated in the operation and maintenance
6.4 Notes to Consolidated Financial Statements 253
agreement made between the Group and Krungthep Thanakom before
commencing operation. In order to reflect the actual opening and
operation of new stations, the Group has revised the consideration from
operation, maintenance and train procurement services, calculating it
based on the same criteria as stipulated in the agreement. The Group
negotiated with the government authority and proposed a revision of
the consideration. The proposal has been granted preliminary approval
by the government authority and the agreement is currently being revised
for signature by the two parties.
On 15 January 2021, the Group submitted a notification letter to
Krungthep Thanakom regarding the outstanding balances of operation
and maintenance services fees, together with related interest as at
31 December 2020, totaling Baht 8,899 million. This consisted of debts
under the Operation and Maintenance Agreements amounting to Baht
1,930 million for the Extension Line Phase No.1 and Baht 6,969 million
for the Extension Line Phase No.2.
On 1 February 2021, the Group submitted a letter requesting Krungthep
Thanakom to settle payment of the outstanding operation and
maintenance service fees. Since approval of the draft amendment of the
concession agreement for the operation of Green Line was still in the
process of being considered by the Cabinet, in accordance with the order
regarding the operation of the Green Line, and Krungthep Thanakom
had no clear measures regarding the payment of outstanding debts and
future debts, the Group requested that Krungthep Thanakom and BMA
settle all debts within 60 days from the date the letter was received.
The debts consisted of operation and maintenance fees of Baht 9,603
million, which have been outstanding for 3 years and 9 months, since
April 2017, and an outstanding balance of Baht 20,769 million under
the Purchase and Installation of Operation System Agreement related
to the mass transit system - Extension Line Phase No.2 which was due
in March 2021.