program management services: pms common ticketing office ... · psk consultants co., ltd. program...

May 2013

Program Management Services: PMS

Common Ticketing Office (CTO) Establishment Report

Avantgarde Capital Co., Ltd

Korea Smart Card Co., Ltd.

PSK Consultants Co., Ltd.

Program Management Services: PMS The Office of Transport and Traffic Policy and Planning

AgC / KSCC / PSK Page a

Common Ticketing Office (CTO)

Establishment Report

Condition

This document is prepared by consulting consortium including (1) Avantgarde Capital Co., Ltd. (2)

Korea Smart Card Co., Ltd. (3) PSK Consultants Co., Ltd., which are selected as the advisor for the Program

Management Service (PMS) for the Office of Transport and Traffic Policy and Planning (OTP). The objectives

of the project include (1) To set policy and operating plan for common ticketing system (2) To develop

common ticketing system and its associated standards and (3) To prepare readiness of Central Clearing

House (CCH). This document is under confidential privilege between OTP and the advisor, which will only be

used for the project’s objectives by OTP.

This document is prepared under considering information received from OTP and/or other

organizations, studies of other consultants, public information, and interview and questions made with

organizations associated with this project. To be used as basic information in making common ticketing

system and central clearing house development plan based on determined objectives of the project, the

advisor have examined sources of such information and use with care, but not including the certification

correctness of the information received by OTP, other consultants and/or other organizations. Therefore, use

of information from this document for publicizing or reference purposed must be decided with own

considerations.


AgC / KSCC / PSK Page b



Table of Contents

Page

Chapter 1 Introduction .................................................................................................................................. 1–1

Chapter 2 The analysis of organization types ............................................................................................. 2–1

2.1 The study of organization’s structures in overseas ..................................................................................... 2–2

2.2 The common ticket related organization in Thailand ................................................................................. 2–17

2.2.1 Bangkok Smartcard System Co., Ltd. (BSS) .......................................................................................... 2–17

2.3 Organization types of Common Ticketing Office : CTO ............................................................................ 2–18

2.4 Defining organization type of CTO ............................................................................................................. 2–32

Chapter 3 CTO’s establishment guidelines .................................................................................................. 3–1

3.1 The guidelines of Common Ticketing Office (CTO) establishment ............................................................. 3–2

3.1.1 Option 1: Establish CTO as a government agency .................................................................................. 3–2

3.1.2 Option 2: Establish CTO as a state owned enterprise ........................................................................... 3–17

3.1.3 Option 3: CTO as a limited company ...................................................................................................... 3–29

3.1.4 Summary of the options for the establishment of CTO ........................................................................... 3–38

Chapter 4 CTO Organization’s Structure ..................................................................................................... 4–1

4.1 Common ticketing operation ........................................................................................................................ 4–2

4.2 Stakeholders’ roles and duties ..................................................................................................................... 4–2

4.3 CTO’s nature of operation ............................................................................................................................ 4–9

4.3.1 Sources of CTO revenue ......................................................................................................................... 4–10

4.3.2 Cost and operating expenses (Fixed cost) ............................................................................................ 4–12

4.4 CTO organization structure ........................................................................................................................ 4–12

Chapter 5 Operational Policies and Strategic Plan ..................................................................................... 5–1

5.1 Operational Policies ..................................................................................................................................... 5–2

5.1.1 CTO’s Operational Policies ....................................................................................................................... 5–2

5.1.2 Single-Standard and Multiple-Issuers Policy ............................................................................................ 5–3

5.1.3 Co-branded card....................................................................................................................................... 5–4

5.1.4 Card Management Policy and Fare Products .......................................................................................... 5–5

5.2 Strategic Plan ............................................................................................................................................. 5–10

5.2.1 Mission ……… ......................................................................................................................................... 5–10

5.2.2 Strategies of CTO .................................................................................................................................... 5–11


AgC / KSCC / PSK Page c



5.2.3 Strategic Goals ........................................................................................................................................ 5–12

5.2.4 Strategic Evaluation and Monitoring ....................................................................................................... 5–12

Chapter 6 Risk Management ........................................................................................................................ 6–1

6.1 Risk Management......................................................................................................................................... 6–2

6.2 Risk Factors .................................................................................................................................................. 6–2

6.2.1 Internal Factors.......................................................................................................................................... 6–2

6.2.2 External Risk .............................................................................................................................................. 6–3

6.3 Types of Risk ................................................................................................................................................ 6–4

6.4 Risk Management......................................................................................................................................... 6–4

6.4.1 Risk Assessment ....................................................................................................................................... 6–4

6.4.2 Risk Assessment ....................................................................................................................................... 6–6

6.4.3 Risk Management Strategy ..................................................................................................................... 6–13

6.4.4 Risk Monitoring ........................................................................................................................................ 6–20


AgC / KSCC / PSK Page d



Table of Figures

Page

Figure 2-1 Octopus’s market shares in Hong Kong .......................................................................................... 2–3

Figure 2-2 Octopus Holdings Limited ................................................................................................................ 2–4

Figure 2-3 The organization’s administrator ...................................................................................................... 2–5

Figure 2-4 Korea Smart Card Co., Ltd. organization’s structure ....................................................................... 2–7

Figure 2-5 KSCC’s structure .............................................................................................................................. 2–8

Figure 2-6 EZ-Link Pte. Ltd. Structure .............................................................................................................. 2–10

Figure 2-7 JR East Company organization’s structure .................................................................................... 2–12

Figure 2-8 JR East Company’s structure ......................................................................................................... 2–13

Figure 2-9 Transport for London organization’s structure ............................................................................... 2–15

Figure 2-10 Rabbit cards ................................................................................................................................. 2–17

Figure 2-11 BSS’s shareholders structure ....................................................................................................... 2–17

Figure 2-12 CTO’s structure in case of government body .............................................................................. 2–18

Figure 2-13 CTO’s structure as a state owned enterprise ............................................................................... 2–20

Figure 2-14 CTO’s Structure as public organization ....................................................................................... 2–22

Figure 2-15 CTO’s structure as an institute under foundation ......................................................................... 2–24

Figure 2-16 CTO’s Structure as a limited company ......................................................................................... 2–25

Figure 2-17 CTO’s Structure as a public company ......................................................................................... 2–27

Figure 3-1 Option 1 government agency ........................................................................................................... 3–2

Figure 3-2 overview of option 1.1 procedure ..................................................................................................... 3–3

Figure 3-3 Procedure of option 1.1 phase 1 ...................................................................................................... 3–4

Figure 3-4 Procedure of option 1.1 phase 2 ...................................................................................................... 3–5

Figure 3-5 Procedure of option 1.2 phase 1 .................................................................................................... 3–10

Figure 3-6 Steps to propose the establishment of a government agency ...................................................... 3–12

Figure 3-7 Steps to propose a department level government agency internal division ministry’s rule .......... 3–13

Figure 3-8 Procedure of option 1.2 phase 2 .................................................................................................... 3–14

Figure 3-9 Procedure of assets transfer from OTP to the office of CTO ......................................................... 3–16

Figure 3-10 Option 2 state owned enterprise .................................................................................................. 3–18

Figure 3-11 Overview of option 2.1 procedure ................................................................................................ 3–19


AgC / KSCC / PSK Page e



Figure 3-12 Procedure of option 2.1 phase 1 .................................................................................................. 3–19



Figure 3-15 Steps to issue a rolyal decree ...................................................................................................... 3–25


Figure 3-17 Option 2 Limited Company ........................................................................................................... 3–31




Figure 3-21 Steps to work on as per PPP act. B.E. 2013 ................................................................................ 3–38

Figure 4-1 Common ticketing structure ............................................................................................................. 4–2

Figure 4-2 Common ticketing operation ............................................................................................................ 4–3

Figure 4-3 CCH System...................................................................................................................................... 4–5

Figure 4-4 Front-end modification ...................................................................................................................... 4–6

Figure 4-5 Topping-up Methods ........................................................................................................................ 4–7

Figure 4-6 Settlement system ............................................................................................................................. 4–8

Figure 4-7 Cash flow structure ......................................................................................................................... 4–10

Figure 4-8 CTO organization structure ............................................................................................................ 4–13

Figure 5-1 Uses of Common Ticket ................................................................................................................... 5–3

Figure 5-2 Single Standard – Multiple issuers ................................................................................................... 5–4

Figure 5-3 Example of Co-branding card issuance .......................................................................................... 5–5

Figure 5-4 Fare rates comparison ...................................................................................................................... 5–7

Figure 5-5 Example of recyclable single journey ticket ................................................................................... 5–10


AgC / KSCC / PSK Page f



List of Tables

Page

Table 2-1 Summary of advantages and disadvantages of CTO as a government body ............................... 2–19

Table 2-2 Summary of advantages and disadvantages of CTO as state owned enterprise .......................... 2–21

Table 2-3 Summary of advantages and disadvantages of CTO as a public organization ............................. 2–23

Table 2-4 Summary of advantages and disadvantages of CTO as a limited company ................................ 2–26

Table 2-5 Summary of advantages and disadvantages of CTO as a public company .................................. 2–28

Table 2-6 Summary of advantages and disadvantages of CTO as a limited partnership .............................. 2–29

Table 2-7 the comparison of each organization types .................................................................................... 2–30

Table 5-1 Summarization of Strategic Plan ...................................................................................................... 5–14

Table 6-1 Criteria of assessing risk probability.................................................................................................. 6–7

Table 6-2 The Likelihood of occurrence analysis .............................................................................................. 6–7

Table 6-3 Criteria of evaluation the hazard severity of circumstances ............................................................. 6–9

Table 6-4 The risks’ severity analysis ................................................................................................................ 6–9

Table 6-5 Criteria of Risk Assessment Level ................................................................................................... 6–11

Table 6-6 Risk Level ......................................................................................................................................... 6–12

Table 6-7 Summarization of Risk Level ............................................................................................................ 6–12

Table 6-8 Risk Management Strategy .............................................................................................................. 6–15


AgC / KSCC / PSK Page 1–1

Common Ticketing Office(CTO)


Chapter 1 Introduction





The Common Ticketing Office (CTO) Establishment Report was created by the advisors to present

the appropriate alternatives to establish CTO according to the term of reference in session 3.5. The

alternatives are suitable to the current environments which are flexible in management, capable to develop

the common ticketing system in Thailand and simply to establish. Thus, in order to establish CTO within time

according to the public policy, the report’s topics are as follow:

(1) The analysis of organization types: The advisors have been consider the possible types of

organization which are government body, state owned enterprise, public agency, limited company,

public company and limited partnership. Moreover, the advisors also studied CTO to analyze

advantages, disadvantages and restriction to establish CTO in 5 countries which are Hong Kong,

Republic of Korea, Singapore, Japan and United Kingdom (London).

(2) CTO establishment alternatives to determine the most appropriate alternatives by compared

organization types, establishment process and procedure in each alternative. This report also

includes role and fee structure of CTO.

(3) The organization structure of CTO which define the necessary departments and their roles and

responsibilities and number of employees in the primary state.

(4) Operation policies to support the common ticketing management. Advisory teams present the

strategic plans regarding the achievement of objectives in effectiveness and efficiency of operations.

(5) Risk management: Determine the risks assessments that may occur and impact to the common

ticketing management and operations and also provide the recommendations to control those risks.





Chapter 2 The analysis of organization types





2.1 The study of organization’s structures in overseas

The advisors had studied the case studies of the common ticketing organization’s structure in

overseas, including 5 countries;

(1) Hong Kong Special Administrative Region of the People’s Republic of China (Hong Kong) (the

operator of “Octopus” card)

(2) Republic of Korea (the operator of “T-Money” card)

(3) Republic of Singapore (the oprator of “EZ-Link” card)

(4) Japan (the operator of “SUICA” card”

(5) United Kingdom (the operator of “Oyster” card)

In order to achieve the optimal structure which suitable to perform as an common ticketing operator

of Thailand.

2.1.1.1 Hong Kong Special Administrative Region of the People’s Republic of China (Hong Kong)

Hong Kong is the first place to implement the common ticketing system and smartcard, the card is

called “Octopus” launched in 1997 while it took 3 years to be implemented by Octopus Card Limited (OCL),

which operates the common ticketing system and smartcard as a card issuer and operate the clearing. OCL

was a subsidiary of Octopus Holdings Limited, established in 1997 by 5 major transportation service

providers, including MTR Corporation Limited (MTRC) (which has an agreement with the government to

manage KCRC’s asset for 50 years since 2007), Kowloon-Canton Railway Corporation (KCRC), KMB Public

Bus Services Holdings Limited (KMB), Citybus Limited (Citybus) and Hongkong and Yaumatei Ferry (which

transferred all of its shares to New World First Bus Services Limited).

The first phase of the Octopus Card’s implementation, the card was utilizable only within transit mode

and expand its market to non-transit mode in 2000, when Octopus Card are utilizable with most transit mode

which are buses, subways, rails, ferries, taxis, coaches including merchandise and service purchasing such

as department stores, restaurants, theaters, hospitals, gyms, parking lots and public services.

In 2002-2011, there were 5,200 transportation service providers and 1,200 retails participated with

the Octopus. It indicates that between 2002 and 2011, there were 6% and 41% increasing in transit and non-

transit mode respectively.





Figure 2-1 Octopus’s market shares in Hong Kong

Currently, 90% of transit payments are made by Octopus Card and only 10% using single journey

magnetic card or cash, while the fare is controlled by the government in the Fare Adjustment Mechanism.

In addition, Octopus developed the e-ticket system as well as the automatic fare collection system in

other countries such as Netherland, United Arab Emirate (Dubai) and New Zealand (Auckland).

Octopus Holdings Limited’s shares are owned by the transportation operators which are

(1) MTR Corporation Ltd. (A rail operator)

(2) Kowloon-Canton Railway Corp. (A rail construction operator)

(3) KMB Public Bus Services Holdings Ltd. (A Hong Kong public bus operator)

(4) Citybus Ltd. (A public bus operator)

(5) New World First Bus Services Ltd. (A public bus operator)

In addition, Octopus Holdings Ltd. has 5 subsidiaries working as support business units of Octopus Holdings

Ltd. which includes;

(1) Octopus Cards Ltd. who operates contactless smart card payment system

(2) Octopus International Projects Ltd. who provides an Automatic Fare Collection system in Hong Kong

and internationally

(3) Octopus Rewards Ltd. who develops and manages the customer loyalty platform

(4) Octopus Investments Ltd., which is an investment holding company

Octopus China Investments Ltd., which is an investment holding company involving with China’s

projects





Figure 2-2 Octopus Holdings Limited

Source: Octopus Holdings Ltd.

Howver, the Octpus organization’s structure is formed of the top exsecutive which is the Chief

Exsecutive Officer (CEO), financial director, international business director, technical director, sales and

marketing director, general counsel, general manager china business, general manager corporate

communication department, general manager human resource and administration department, general

manager options department and general manager risk management and compliance department,

respectively, as demonstrated in the figure below.

MTR Corporation Ltd. Kowloon-Canton

Railway Corp. KMB Public Bus

Services Holdings Ltd. Citybus Ltd. New World First Bus

Services Ltd.

Octopus Holdings Ltd.

57.4% 22.1% 12.4% 5.0% 3.1%

Octopus Cards Ltd. Octopus International

Projects Ltd. Octopus Rewards Ltd. Octopus Investments

Ltd. Octopus China

Investments Ltd.





Figure 2-3 The organization’s administrator

Source: Octopus Holdings Ltd.





2.1.1.2 Republic of Korea (South Korea)

The common ticketing system firstly started from the implementation of the AFC system in the

subway and bus systems to solve the traffic problems, and then continue to expand into the non-transit

system. The bidding of common ticketing system implementation was held by the Seoul Metropolitan

Government, Korea Smart Card Co., Ltd. (KSCC) won the concession. KSCC is owned by LG CNS Co., Ltd,

equipment providers, 13 financial institutions and Seoul Metropolitan Government holds 26% of shares and

supervises the KSCC’s operation. KSCC modified the existing fare collection system to meet the standard set

by the government.

The common ticket called T-Money Card, which is a Microprocessor, was launched in 2003. The

cards were issued by the service providers of cash, credit card and banks while KSCC was the intermediary

between service providers and issuers. The T-Money Card originally uses the MIFARE Classic technology

which is an off-the-shelf-product to meet the card launching schedule, and then develop its own standard

afterward. The T-Money Card is now accepted by subways, taxis, buses, retails, theaters and restaurants.

However, both standard remain in the system of which about 60% are Type A.

Moreover, there is another major clearing house which is Cashbee of Lotte which also started from

using MIFARE Classic technology but with different cards data structure from KSCC’s. The Cashbee uses the

KSCC’s standard version 2.0 while the system is able to read many card standards.

However, the T-Money Card has market share as followed, 93% of buses, 100% of subways and

30% of taxis, and is usable in Seoul and other cities such as Incheon and Busan.

Korea Smart Card Co., Ltd. (KSCC) was established from the cooperation of Government and private

sectors who are the leaders of the information technology sector and has 3 major shareholders while the

government remains the hightes shares. The 3 major shareholders includes

(1) Seoul Metropolitan Government who manage the Seoul’s transportation, including the fare polices

and Seoul’s transportation routes.

(2) LG CNS Co., Ltd. which is an information technology service provider)

(3) Atec Co., Ltd which is an information technology service provider for transportation cards, screens

and system.

While KSCC issues cards and operates the clearing house system.





Figure 2-4 Korea Smart Card Co., Ltd. organization’s structure

Source: Korea Smart Card Co., Ltd.

The organization’s structure of KSCC is devided into 2 units which are the business support unit

which consists of financial department, human resource department, legal department and policy support

department, the business unit which is devided into transit and no-transit sectors, each consists of customer

center, planning department, marketing department and technology center as demonstrated in the figure

below.

Seoul Metropolitan

Government LG CNS Co., Ltd. Atec Co., Ltd. Other

Korea Smart Card Co., Ltd.

Korea Smart Card CS Partner

35.0% 31.9% 10.2% 22.9%

100.0%





Figure 2-5 KSCC’s structure

Source: Korea Smart Card Co., Ltd.





2.1.1.3 Republic of Singapore

The common ticket in Singapore was initiated by Transit Link Pte Ltd, which is a public sector. Transit

Link introduced Transit Link cards, funded by its government, in year 2000. The cards were a magnetic-stripe

type. The public bus fare rate was step-up-based, while electric train was distance-based.

In 2002, Land Transport Authority (LTA) established EZ Link, which is a private sector. EZ link was

responsible for issuing smart cards called EZ-Link. The cards were used in public buses and electric trains.

LTA holds 100 percent of EZ-Link shares. The company has a registered capital of SGD 14.51 Million, which

is equivalent to 340 Million Baht. The EZ-Link was responsible for selling and managing EZ-Link card as well

as managing the central clearing house for both transit and non-transit service providers who use the

technology of EZ-Link.

EZ-Link can be used to pay the fare for Light Rail Transit (LRT), Mass Rapid Transit (MRT), and taxi.

Moreover, it can perform payment transactions with convenient stores, restaurants, school canteens, and

other public services. EZ-Link has been further developed to replace national ID cards, student cards, and

military ID cards.

From 2002 to 2008, more than 10 million EZ-Link had been issued. EZ-Link introduced a new type of

card “CEPAS” (Contactless e-Purse Application, Prepaid Card) and Symphony for ePayment (SeP) system in

December 2008. The new technologies enabled EZ-Link to cover a wider range of its service. Presently, more

than 12 million EZ-Link cards are used in the system.

EZ-Link holds 100 percent shares; however, it is regulated by Monetary Authority of Singapore and

Public Transport Council. It is sole responsibilities of EZ-Link in selling the cards, as well as regulating transit

and non-transit payment systems.





Figure 2-6 EZ-Link Pte. Ltd. Structure

Source: EZ Link

Land Transport

Authority (LTA)

EZ-Link Pte.Ltd.

100%

Monetary Authority

of Singapore Public Transport

Council

Transit

Operators

Non-Transit

Operators

Bus MRT LRT Other retails 7/11 Mcdonald

Allocate/ set the fare collection

system

Supervise Supervise





2.1.1.4 Japan

There are several types of common tickets used in Japan. Each type offer services in different areas.

Table 2-1 Common ticket in Japan

Suica is, however, the most used type of card; and it covers most of the area. There are presently

40.74 million 1 Suica cards in the system. Suica is the most developed card, compared to other types.

JR EAST initiated the use of Suica in 2001. It was a microprocessor card, using RFID technology

which was developed by Sony, known as FeliCa. It was firstly used in mass rapid transit then, it was extended

to public buses and taxi, as well as other non-transit services. Suica covers the area of Kanto region, Sendai

area, and Nigata area

1 Source: FY2012.3 Financial Results Presentation,https://www.jreast.co.jp/e/investor/pdf/2012_presentation.pdf

Cards Operators Area Example

Suica JR East Greater Tokyo Area, Sendai and

Niigata

Toica JR Central Greater Nagoya and Shizuoka

Prefecture

Icoca JR West Greater Osaka, Okayama and

Hiroshima Prefectures

Kitaca JR Hokkaido Sapporo

Sugoca JR Kyushu Fukuoka Prefecture

Pasmo Pasmo Corporation Greater Tokyo Area

Manaca Nagoya City

Transportation Bureau

Nagoya

Pitapa Surutto Kansai

Association

Greater Osaka, Okayama and

Shizuoka





JR Group has made a contract to create interoperability among all systems in Japan that use FeliCa.

The development has been expanded from the interoperability between Suica and Pasmo.

In 2008, JR Group cooperated with Central Japan Railway to create interoperability with TOICA, and

extended to Tokai, Kinki, Okaya, and Hiroshima area. JR group also cooperated with Hokkaido Railway

Company to create interoperability with Kitaca in 2009; then, with Kyushu Railway Company and Nishi-Nippon

to create interoperability with SUGOCA and Nimoca in 2010; then, with Fukuoka Transportation Bureau to

create interoperability with HAYAKAKEN in 2011.

East Japan Railway used to be a subsidiary of Japanese National Railways. In 1987, Japanese

government reformed the Japanese National Railways into seven public companies, each of which is

responsible for different areas. East Japan Railway services cover Tokyo, Yokohaya, Nagoya, Kyoto, and

Osaka.

In 2002, East Japan Railways registered in the Tokyo Stock Exchange. The top 10 stockholders are:

Figure 2-7 JR East Company organization’s structure

Source: JR East Company

Japan

Trustee

Services

The Master

Trust Bank of

Japan

The JR East

Employees

Shareholding

The Bank of

Tokyo-

Mitsubishi

JR East Company

5.06% 4.17% 3.29% 3.13% 2.63%

Sumitomo

Mitsui

Banking

Mizuho

Corporate

Bank Mizuho Bank

SSBT OD05

OMNIBUS

ACCOUNT Nippon Life Dai-ichi Life

2.50% 2.50% 2.32% 2.00% 2.00%





JR East is a large organization. Since it is a public company , the organizationed is combined with

many departments and the administrative organization which is the board of director. The chairman and the

president are the top management exsecutives and has other departments and branch offices as

demonstrated in the figure below.

Figure 2-8 JR East Company’s structure

Source: JR East Company





2.1.1.5 United Kingdom (London)

The common ticketing system in London started in 2003 and is administered by Transport for London

(TfL) which is an integrated body under the Mayor of London. TfL is responsible for capital’s transportation

and operates according to the Mayor’s policies which include London’s buses, London Underground,

Docklands Light Railway (DLR), London Overground, Tramlink, London River Services and Victoria Coach

Station. The common ticket called “Oyster” card which is accepted by most of the transit mode.

The TfL’s Management of Oyster is a good example for implementing the common ticketing system.

It emphasizes on the transit mode and the long run operation. TfL chose to use the MIFARE DESFire EV1

which is an off-the-shelf-product instead of implementing its own standard. It also planned to have banks

issue the cards with EMV (Europay, Master and Visa) standard, that way, TfL only emphasizes on improving,

its services and cost reduction. Moreover, TfL will change to Open Loop Account Base system, which

requires a stable infrastructure and communication network, which TfL has planned and studied for the

implementation in the future.

TfL planned to start using the EMV standard in 2014. However, it still has problem with the speed

(500 msec/transaction, currently) which needs improvement to meet the EMV standard’s requirement and also

in the process of testing the NFC technology.

TfL is a government body under the Mayor of London established in 2000, responsible for the

Capital’s transportation. TfL operates under the Mayor’s strategy in transportation. In addition to TfL’s

aforementioned responsibilities, TfL is also responsible for managing the Congestion Charge, maintaining the

580 km. roads and traffic lights, and promoting a range of walking and cycling.

In addition, TfL has 3 subsidiaries which are

(1) London Transport Insurance Guensey Ltd. which is an insurance company provides service to TfL

and its subsidiaries

(2) TfL Trustee Co., Ltd., a trustee of the TfL Pension Fund

(3) Transport Trading Ltd., a holding company for all transport operators, operates certain trading

activities





Figure 2-9 Transport for London organization’s structure

Source: Transport for London

Mayor of London

Transport for London

London Transport Insurance

Guernsey Ltd. TfL Trustee Co., Ltd. Transport Trading Ltd.

TfL Board of Directors

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sued

22

milli

on c

ards

45

milli

on c

ards

12

milli

on c

ards

60

milli

on c

ards

43

milli

on c

ards

Num

ber o

f tra

nsac

tion

per d

ay

12 m

illion

tran

sact

ions

35

milli

on tr

ansa

ctio

ns

20 m

illion

tran

sact

ions

70

milli

on tr

ansa

ctio

ns

6 m

illion

tran

sact

ions

Tran

sact

ion

(tran

sit :

non

-tran

sit)

59 :

41

n.a.

n.

a.

50 :

50

n.a.





2.2 The common ticket related organization in Thailand

In 2007, there was a signing on the MOU on common ticketing initial implementation between

Bangkok Mass Transit System Plc., Ltd. (BTS), Bangkok Metro Plc., Ltd. (BMCL), The Office of Transport and

Traffic Policy and Planning (OTP), Bangkok Metropolitan Authority (BMA), State Railway of Thailand (SRT) and

Mass Rapid Transit Authority of Thailand (MRTA). The parties aimed to initially implement the common ticket

which includes the common ticket standardization, in order to allow the pulic transportation users to a single

card for transportation by implementing the transportation systems under BTS and BMCL as the pilot project

for the trial run at the beginning of the project under the terms and conditions of the aforementioned MOU.

2.2.1 Bangkok Smartcard System Co., Ltd. (BSS)

BSS is the service provider of “Rabbit” card which is valid for the transportation systems which are

under BTS and BMCL and retail stores, whereas BSS provides E-money service and common ticket for both

transit and non-transit systems.

Figure 2-10 Rabbit cards

2.2.1.1 BSS organization’s structure

BSS was founded in 2007 with BTS held 100% shares in BSS, then, in 2010, BTS sold 10% of the

BSS to Bangkok Bank Plc., Ltd.

Figure 2-11 BSS’s shareholders structure

Source: Bangkok Mass Transit System Plc., Ltd. 2010 annual report





2.3 Organization types of Common Ticketing Office : CTO

The advisors have been studied the characteristics of organization types, establishment’s process

and time frame to analyze advantages, disadvantages and restriction to establish CTO which can be

conclude in 6 organization types, which are government body, state owned enterprise, public agency, limited

company, public company and limited partnership.

2.3.1.1 Government Body

2.3.1.1.1 Common Characteristics

Government body means ministry, bureau, department that equivalent to government agency

exclude state owned enterprise or institutes in Budget Procedures Act, B.E. 2502. In this case, CTO may

establish under the Ministry of Transportation and Communications or government services under Ministry of

Transportation and Communications.

If CTO is under the Ministry of Transportation and Communications, government will has complete power and

authority in management such as quality control, fee policy and other standards, etc.

Figure 2-12 CTO’s structure in case of government body

2.3.1.1.2 The analysis of advantages and disadvantages

Advantages

(1) Standard Control: Government will has complete power and authority to control and integrate

transportation policy, set standards of common ticketing system, fee policy and other standard

efficiently.

(2) Government Support: Government can determine the policies to support and develop the

management system from Ministry of Transportation and Communications and CTO and also efficient

in subsidy distribution.

Ministry of Transport/ government

agency under MOT

CTO (CTO)

Establish





Disadvantages

(1) Take time in establishment procedure: According to legal and regulation, CTO’s establishment has to

write the bill and present the bill to ask for approval from the cabinet and be in process according to

session 5.1.1.3

(2) The Flexibility in Management: As a government body, CTO has to be under the government

regulations which may take time and less flexibility in operation process compare to be in form of

limited company or public company.

(3) Limitation of capital investment: As a government body, the main source of fund to development has

to come from the annual government statement of expenditure which may be the restriction in the

future. If CTO be structure as limited company or public company, it would be more alternatives find

sources of fund.

Table 2-1 Summary of advantages and disadvantages of CTO as a government body

Advantages Disadvantages

1. Government has power and authority to

control, and regulate CTO efficiently.

2. Directly support from government in

common ticketing system’s

development.

1. Inflexible in management

2. Take time in establishment

3. Limitation in innovation investment

4. Limitation in funding

2.3.1.2 State Owned Enterprise


State Owned Enterprise according to Budget Procedures Act, B.E. 2502 can be defining as follow:

(1) Government agency or organization owned by the government.

(2) Company or limited partnership having investment by an official agency in excess of 50 percent of its

capital amount.

(3) Company or limited partnership having capital investment by an official agency and/or state owned

enterprise as stated in (a) and/or (b) with the investment exceeding 50 percent.

(4) Company or limited partnership having capital investments made by government agency and/or

state owned enterprise as per (c) and/or (a) and (b) in excess of 50 percent.

(5) Company or limited partnership having capital investments made by government agency and/or

state owned enterprise as per (c) and/or (a) and (b) in excess of 50 percent.





CTO’s establishment in structure as state owned enterprise can be settles in many ways such as

established by the act, royal act, royal decree, rules and regulations of Civil and Common Code. The

government or the government agency still holds the shares in excess of 50 percent. Thus, the government

still has authority to control and regulate CTO in many ways such as transportation policy, set standards of

common ticketing system, fee policy and other standards like Thai Airways International Public Company

Limited, The Transport Company Limited and Thailand Post Company Limited, etc. However, the organization

type as limited company or public company should be more flexibility to raise fund from private investors.

Figure 2-13 CTO’s structure as a state owned enterprise


Advantages

(1) Standard Control: Government still has power and authority to control and integrate transportation

policy, determine standards of common ticketing system, fee policy and other standards. Although

less power than structure 1, the Government Body, but depends on term and condition between

shareholders, government and private investors.

(2) Transparency in Operation: As CTO as a state owned enterprise, it has to be examined by

government or parliament.

(3) Government Support: Government can determine the development policy through Ministry of

Transportation and Communications and government services as shareholder.

(4) Less time in establishment process: It can be establish in form of limited company.

Government

CTO

Other shareholders

More than 50% Less than 50%





Disadvantages

The disadvantages of state owned enterprise are less flexibility in management. Even through CTO

has a status as state owned enterprise in form of limited company or public company but the operation

management has to follow the law and regulations. Thus, CTO is less flexibility in management than limited

company or public company that does not be as state owned enterprise.

Table 2-2 Summary of advantages and disadvantages of CTO as state owned enterprise


1. Government has power and authority

to control, and regulate CTO efficiently.

2. Received budget from government.

1. Limitation in innovation investment .

2. Inflexible in management.

2.3.1.3 Public Organization


Public Organization mean public organization that have status as government agency and legal

person which were established under the Public Organization Act B.E. 2542 to operate public services such

as Social Work, Natural Resources and Environmental Management, Art and Cultural preservation, Public

Health Service or other public services that are non-profit organization. These organizations have objectives

to be efficient resources and human resources utilization. Moreover, public organization have to determine

the scopes of operation and investment according to law, beside that they have to ask for approval case by

case.

According to Public Organization Act B.E. 2542, Ministry of Transportation and Communications has

to submit the establishment plan to receive the approval from council of minister and parliament. Then, it has

to publish in the Royal Thai Government Gazette to establish CTO as a public organization.





Figure 2-14 CTO’s Structure as public organization


Advantages

(1) Standard Control: Government still has power and authority to control and integrate transportation

policy, determine standards of common ticketing system, fee policy and other standards to be in the

single standard.

(2) Government Support: Government decides the development support’s policy for common ticketing

system through Ministry of Transportation and Communications and other government agencies.

(3) Capital Investment Capability: as a public organization, CTO can be funding from various channels

such as investors, financial institution or issue bond and sell both in domestic and aboard.

Disadvantages

(1) Take time in establishment procedure: The establishment has to get approval from the cabinet and

parliament to be as a public organization.

(2) Public organization is a non-profit organization. The objective of operation is to produce. Sell and

distribute common ticket and provide services which should be able to generate sufficient income

and be profitable in the future. Thus, it may be contrast to the structure’s objective.

(3) Flexibility in management: If CTO is a public organization, it will be more flexible in operation rather

than has a structure as government agency or state owned enterprise. However, CTO still has to ask

the permission from the government in case by case which will be less flexible than limited company

or public company.

Government Agency

CTO

Ministry of Transportation and Communications

submit the establishment plan to council of minister

and parliament





Table 2-3 Summary of advantages and disadvantages of CTO as a public organization


1. Government has power and control to

regulate CTO efficiently.

2. More flexible to manage and control

like private sector.

3. Receive the subsidy from government,

private sector and other organization.

4. Capital funding

1. Non-profit Organization

2. It has to ask for permission from

government if it differ from the objectives

that define in the establishment.

2.3.1.4 Institute under a foundation

2.3.1.4.1 General aspect

An institute under a foundation is a type of organization which is not considered as a government

agency but it is required some government authority or act as the government’s tools to serve industrial and

commercial public services. It is established by the cabinet’s resolution aimed to strengten a specific industry

at the early period, while letting the private sector to take on the business once the industry is stable.

However, the institution is not a juristic person, therefore, the foundation is set up to support the juristic acts

involvement. The institute set up its own regulations for the human resource, budget, procurement

management which is different from the regulations of government agencies and state owned enterprises.

The revenue perceived from the service revenue and annually allocated national budget as general subsidy.

The organizational administration is under the Board of Directors or Board of administrative directors, who is

responsible for the policy making, supervising, controlling and performance evaluation, and consists of

representatives from the original affiliate, private sector, other related organizations, experts and specialists in

an appropriate proportion.

In case that CTO is established as an institute, which has an objective for a tempolary existence to

strengthen the specific industry. Since common ticketing management requires to contribute power to define

policy framework for service providing, fare policy and common ticketing development policy. Hence, CTO

should be an organization that the government is entitled to regurate and supervising at the level that it will

lead to a fairness and effective in services to the users. Moreover, CTO should be remained and stable so as

the common ticketing service shall be effective and is able to continuously provide services as well as

developed to be a stable system. However, the institute is not a juristic person, thus, it cannot invole in any

juristic acts which results in the operation manner of the business that may conflict to the objectives of the

foundation, whose objective is not for realization of profits, including the tardiness in operation which the

institute shall involve in juristic acts through the foundation which may effect to the operational flexibility.





Figure 2-15 CTO’s structure as an institute under foundation


Advantages

(1) Operational policy: the different operational regulations and policy from the ones of government

agencies and state owned enterprise which results in more flexibility in operation.

(2) Support from the government: ability to be subsidized by the government as well as gaining

revenue

(3) Less establishment procedure: established by the cabinet resolution but it might take time to seek

for board of directors in case that there are many board member

Disadvantages

(1) Business objectves to gain profit: an institution under foundation may effect the operation which

aimed to gain profit as the foundation has as objective not to gain profit for any person.

(2) The stability of the organization: institute is an organization that is tempolariry set up to strengthen

a specific industry in the initial period which might not suitable for the business which the

government should remain controlling and policy making authority.

(3) Disadvantage of government supervision: up to the proportion of the board of director members.





Table 2-3 Summary of advantages and disadvantages as an institute under foundation


1. Operational policy is different from the

government agency and state owned

enterprise

2. Government subsidy

3. Less establishment process

1. The operation may conflict to the

foundation objective

2. Tempolary set up objective

3. Limitation of government supervision

2.3.1.5 Limited Company


Limited Company is the company that was established under the Civil and Commercial Code.

Shareholders have limited liability responsibility. If the company is a limited liability company, the

shareholders' liability, should the company fail, is limited to the amount, if any, remaining unpaid on the shares

held by them.

It will be more flexibility in management than other types of organization if CTO established as a

limited company because of its independent. It will be fast in operation management, be efficiency and be

efficient in determine the strategy plan. It will be more efficient in common ticketing system’s development

from no restriction in funding. Even though company cannot sell its shares or issue bond to public as the

public company.

Figure 2-16 CTO’s Structure as a limited company

Government

CTO Co.,Ltd.

Transit Provider

Hold shares

Retailers Other

Shareholders Financial

Institution





2.3.1.5.2 The analysis of advantages and disadvantage

Advantages

(1) Flexibility in management: As a limited company, CTO will be more flexibility in management rather

than government agency and state owned enterprise. It will be flexible to adjust operation plan to

current situation or increase the competitiveness.

(2) Less time in establishment: It has less procedure to establish CTO when compare to other

organization types.

(3) Ability in funding: Limited company can raise fund from shareholders or loans from financial

institution for future investment. Although this type of organization cannot raise fund from public like

public company but it has more alternatives for funding rather than other organization types.

Disadvantages

(1) Standard Control: Government can set the common ticketing standard and other relevant system, fee

policy and others in the certain level.

(2) Even though CTO is a limited company, the major shareholder should be government or in the first

phase after establishment to be able to has power and authority to determine policies and support to

be successful project.

(3) Fee policy or revenue management still has to depend on government or depends on government’s

subsidy.

Table 2-4 Summary of advantages and disadvantages of CTO as a limited company


1. Flexibility in management.

2. Less time for establishment compares

to public organization or state owned

enterprise process.

3. More alternatives for funding even if

less than public company.

1. It has government power and authority in

certain level.

2. The successful of project depends on

government support.





2.3.1.6 Public Company Limited


Public company is the limited company that registered according to Public Limited Companies Act

B.E. 2535. A public limited company is a company established for the purpose of offering shares for sale to

the public and the shareholders shall have the liability limited up to the amount to be paid on shares. Publicly

traded companies are able to raise funds and capital through the sale of their securities in the stock

exchange. It has more flexibility in management and more efficient because many alternatives to raise fund. In

addition, as a public company, CTO has more opportunity to have strategic partner to increase the

development efficiency of business and technology. The management of common ticketing system will be

more efficiency.

Figure 2-17 CTO’s Structure as a public company


Advantages

(1) Flexibility in management: As a limited company, CTO will be more flexibility in management rather

than government agency and state owned enterprise. It is a profitable organization which require

high level of flexibility in management i.e., adjustable the operation plan to current situation or

increase the competitiveness.

(2) Less time in establishment: Although it has more procedures in establishment rather than limited

company but it has less time in establishment when compare to other organization types.

(3) It has many alternatives to raise fund and many sources of funding when compare to other

organization types.

Government

CTO Public Company

Transit Provider

Hold shares

th 50%

Retailers Other

Shareholders

Financial

Institution

http://en.wikipedia.org/wiki/Capital_(economics)





Disadvantages

(1) Standard Control: Government can set the common ticketing standard and other relevant system, fee

policy and others in the certain level.

(2) Although CTO is a public company, the major shareholder should be government or in the first phase

after establishment to be able to has power and authority to determine policies and support to be

successful project.

(3) Fee policy or revenue management still has to depend on government or depends on government’s

subsidy.

Table 2-5 Summary of advantages and disadvantages of CTO as a public company


4. Flexibility in management.

5. Less time for establishment compares

to public organization or state owned

enterprise process.

6. More ability to raise fund.

4. It has government power and authority in

certain level and also has limitation from

many stakeholders.

5. Need government support for operation.

6. Need a government subsidy

2.3.1.7 Limited Partnership


Limited Partnership means register limited partnership according to Civil and Commercial Code

which can be divided into 2 types;

(1) One or more partners whose liability is limited to such amount as they may respectively undertake to

contribute to the partnership.

(2) One or more partners who are jointly and unlimitedly liable for all the obligations of the partnership.


Advantages

(1) Less time for establishment because it has less procedures to register.





Disadvantages

(1) Unable to do the electronic transaction: According to Royal Decree to Regulate Electronic Payment

Service Provider B.E.2551, Limited Partnership or Registered Ordinary Partnership cannot ask for

approval to do the electronic transaction i.e., Clearing accounts, Switching services for payment

system and the electronic transaction to buy or pay for goods/services.

(2) High risk for unlimited liability partner: There are two types of limited partnership which are limited

liability partner and unlimited liability partner. Unlimited liability partner has unlimited liability, not only

equal to capital investment amount.

(3) Limitation in funding because limited partnership has to raise funds only from partners.

(4) Inflexible in business operation: All partners have to do decision making together. Thus, it will take

time for decision making in business operation.

Table 2-6 Summary of advantages and disadvantages of CTO as a limited partnership


1. Easy and take less time for

establishment process.

1. Unable to do the electronic transaction

which impact to the establishment of

CCH.

2. High risk for unlimited liability partner.

3. Limitation for funding.

4. Inflexible in business operation.

Prog

ram

Man

agem

ent S

ervi

ces:

PM

S

Th

e O

ffice

of T

rans

port

and

Traf

fic P

olic

y an

d Pl

anni

ng

AgC

/ KS

CC

/ PS

K Pa

ge 2

–30

Com

mon

Tic

ketin

g O

ffice

(CTO

)

Esta

blis

hmen

t Rep

ort

Tabl

e 2-

7 th

e co

mpa

rison

of e

ach

orga

niza

tion

type

s2

G

over

nmen

t Age

ncy

Stat

e O

wne

d En

terp

rise

Publ

ic O

rgan

izat

ion

Lim

ited

Com

pany

Pu

blic

Com

pany

Li

mite

d pa

rtner

ship

Gov

ernm

ent C

ontro

l

Gov

ernm

ent a

genc

y

unde

r the

Min

istry

of

Tran

spor

tatio

n an

d

com

mun

icat

ions

,

gove

rnm

ent h

as c

ompl

ete

pow

er a

nd a

utho

rity

to

regu

late

and

con

trol.

Stat

e ow

ned

ente

rpris

e in

form

of l

imite

d co

mpa

ny,

gove

rnm

ent h

as p

ower

and

auth

ority

to re

gula

te

and

cont

rol.

Gov

ernm

ent h

as p

ower

and

auth

ority

to re

gula

te

and

cont

rol i

n a

certa

in

leve

l bec

ause

it is

an

inde

pend

ent o

rgan

izat

ion.

It ha

s a

limite

d po

wer

as

a po

rtion

of a

mou

nt o

f

hare

s th

at g

over

nmen

t

hold

s an

d al

so a

s a

regu

lato

r.

It ha

s a

limite

d po

wer

as

a po

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of a

mou

nt o

f

hare

s th

at g

over

nmen

t

hold

s an

d al

so a

s a

regu

lato

r.

It ha

s a

limite

d po

wer

as a

por

tion

of a

mou

nt

of h

ares

that

gove

rnm

ent h

olds

and

also

as

a re

gula

tor.

Cap

ital F

undi

ng

It ne

ed g

over

nmen

t

budg

et fo

r ope

ratio

n.

Stat

e ow

ned

ente

rpris

e

can

rais

e fu

nd fr

om

shar

ehol

ders

.

Publ

ic o

rgan

izat

ion

is a

n

inde

pend

ent o

rgan

izat

ion.

It ca

n ra

ise

fund

from

issu

ed b

ond

or lo

ans.

Man

y al

tern

ativ

es to

rais

e fu

nd b

ut c

anno

t

rais

e fu

nd fr

om p

ublic

.

Man

y al

tern

ativ

es to

rais

e fu

nd in

clud

e fro

m

publ

ic.

Lim

itatio

n to

ra

ise

fund

, on

ly

from

partn

ers.

Flex

ibilit

y in

Man

agem

ent

Take

tim

e in

ope

ratio

n

appr

oval

as

follo

w th

e

gove

rnm

ent r

egul

atio

ns.

Stat

e ow

ned

ente

rpris

e

has

to b

e st

rictly

to th

e

role

s an

d re

gula

tion

of th

e

Publ

ic o

rgan

izat

ion’

s

oper

atio

n ha

s to

be

oper

atin

g on

ly a

ccor

ding

Hig

h le

vel o

f fle

xibi

lity

in

oper

atio

n.

Flex

ible

in o

pera

tion

but

has

to d

o ac

cord

ing

to

gove

rnm

ent r

egul

atio

n.

All p

artn

ers

have

to

agre

e in

bus

ines

s

deci

sion

mak

ing.

2 H

ighe

st

Hig

h

Mod

erat

e

Low

Low

est

Prog

ram

Man

agem

ent S

ervi

ces:

PM

S

Th

e O

ffice

of T

rans

port

and

Traf

fic P

olic

y an

d Pl

anni

ng

AgC

/ KS

CC

/ PS

K Pa

ge 2

–31

Com

mon

Tic

ketin

g O

ffice

(CTO

)

Esta

blis

hmen

t Rep

ort

G

over

nmen

t Age

ncy

Stat

e O

wne

d En

terp

rise

Publ

ic O

rgan

izat

ion

Lim

ited

Com

pany

Pu

blic

Com

pany

Li

mite

d pa

rtner

ship

go

vern

men

t. to

the

goal

s, o

bjec

tives

and

scop

es.

Diff

icul

t/ Ea

sy in

esta

blis

hmen

t

Gov

ernm

ent a

genc

y ha

s

to b

e as

a d

epar

tmen

t

and

has

to b

e es

tabl

ishe

d

by th

e ac

t whi

ch h

as

man

y pr

oces

ses

and

take

time.

Stat

e ow

ned

ente

rpris

e in

form

of l

imite

d co

mpa

ny

has

sam

e es

tabl

ishm

ent

proc

ess

as li

mite

d

com

pany

whi

ch

cons

umes

tim

e an

d ha

s to

be a

ppro

ved

by

gove

rnm

ent.

Publ

ic O

rgan

izat

ion

has

to

be e

stab

lishe

d by

the

act.

Less

est

ablis

hmen

t

proc

ess

and

less

tim

e in

esta

blis

hmen

t.

Man

y es

tabl

ishm

ents

proc

ess

and

take

tim

e in

esta

blis

hmen

t.

Less

est

ablis

hmen

t

proc

ess

and

less

tim

e

in e

stab

lishm

ent.





2.4 Defining organization type of CTO

The advisor analyzed the establishment of CTO in several methodologies such as government

agency, state owned agency, limited company and public company limited as demonstrated in the table of

comparison for 4 factors which are supervising authority, fundraising, operation flexibility and establishment

difficulty by defining suitable types of organizations as per the sequence of importance of those factors

including the analysis of CTOs’ types of organization in overseas such as Japan, Hongkong, Republic of

Korea, Singapore and United Kingdom which set up CTOs as government agency, state owned enterprise

and limited company.

However, as per the fundamental analysis, the advisor suggested 3 types of organization which are

(1) government agency under the Ministry of Transport which allows the government to absolutely control,

supervise and define common ticketing standards and support the common ticketing development (2) state

owned enterprise which allow the control and supervising from the government and is a stable organization

(3) limited company as a private company through a hire of work contract which allow the government to

regulate as the employer and policy maker while CTO still operate flexibly. The details are stated in the next

chapter.





Table 2-4 Comparisons of 3 options

Government agency State owned enterprise Limited company

(1) Relationship with the

government

(a) Establishment

(b) Status

(c) Executives

appointment

(d) Government control

Public laws

Juristic person (from

department level on)

Government

Yes

Public law/ company

registration

Juristic person

Government

Yes

Company registration

Juristic person

Board of Directors

Depends on terms and

conditions of contract and

policies

(2) Operational objectives Non-profit

Administrative public

services

Profit

Industrial and commercial

public services

Profit

Not public service

(3) Budget/ revenue Government budget Government budget/ revenue Revenue

(4) Employees’ status Government officers State owned enterprise

employees

Company employees

(5) Operation system As per the government

agency rules

As per the government

agency rules and specific

laws

As per the article of

association and applicable

laws





Chapter 3 CTO’s establishment guidelines





3.1 The guidelines of Common Ticketing Office (CTO) establishment

As per the analysis of organization types in chapter 2, the advisor had analyzed in order to seek for a

suitable type to operate as CTO by taking authority, duration of establishment, operational procedures and

related laws and regulations. Hence, the advisor suggested 3 options of establishment which are option 1

establish as a government agency, option 2 establish as a state owned enterprise and option 3 establish as a

provaite limited company.

3.1.1 Option 1: Establish CTO as a government agency

The option 1 determines that CTO is a government agency under the Ministry of Transport (MOT)

such as OTP or other agencies subjected to the MOT. However, the advisor suggests that such agency might

be OTP or a department under OTP who has authority in policy making and planning for the common ticketing

system, or a new government agency equivalent to department level to operate as CTO. Nevertheless, OTP is

the Program Management Servises (PMS) project owner, has officers keen on common ticket and is the

proprietor of CCH including common ticketing system and standards. Therefore, without engaging in the

process of request for permission to use asset such as rent or permission to use state owned assets which

may shorten the procedure process.

However, in the operation, CTO might seek for the systemand CCH developer through bidding while

CTO operates the system and form a revolving fund to revolve its revenue for the operational expenditure. The

option 1 can be divided into 2 sub-options which are;

(1) OTP acts as CTO

(2) Establish a new department level government agency to act as CTO

Details as follow:

Figure 3-1 Option 1 government agency





3.1.1.1 Option 1.1: OTP act as CTO

Option 1.1 determines that OTP shall act as t CTO since OTP is the organization who responsible for

the regulation and supervision of the common ticketing development including being the employer of the

common ticketing system and CCH development project. Inaddition, OTP has officers (includes the advisor)

both Thais and foreigners keen on common ticketing system. Thus, OTP is the suitable agency to operate the

common ticketing system. However, in order to assign the responsibilities to OTP, it is required to form a

revolving fund as OTP is a government agency that has no objective to collect revenue to be used for

expense, whereas common ticketing operation requires to collect fees and allocate to the participated service

providers and also to be used as development and maintence of CCH system, so that CTO can consistently

provide effective service. Therefore, the process requires to authorize OTP to support CTO responsibilities,

hence, the advisor suggests to enact a revolving fund act which authorize OTP to perform as CTO, details as

follow;

Figure 3-2 overview of option 1.1 procedure





3.1.1.1.1 Procedures

Procedure – Phase 1

Figure 3-3 Procedure of option 1.1 phase 1

(1) OTP as the employer of the common ticketing system and CCH developer (Developer) in the first

phase through an international bidding process, while the scope of work consists fof (a) detailed

design and build the CCH (b) design the common ticketing standards including National Card’s

standard, card reader and other related systems with THB 400 millions budget.

(2) Upon selection of the developer from the first contract, and shall be made on a design contract and

system development contract by OTP referred as “Employer” and selected bidder for common

system developer referred as “Contractor”.

(3) For selected bidder in clause (2) has OTP or a assigned department in OTP such as the Common

Ticketing Office (include the PMS advisor) as its regulators and supervisors subjected to conditions

of contract and upon completed operation, the design work of the common ticketing standard and

CCH hold as legal title of OTP or of government sector.







(1) To establish the revolving fund by enacting the revolving fund act as follow: characteristic and

establishment of the revolving fund accordance with the Treasury Reserves Act, B.E. 2491 (“Treasury

Reserves Act”) Section 3; definition of revolving capital is “The capital that established for the affair

which allow to accumulate the revenue for disburse” and section 12; determine the approach to

disburse as capital or as revolving capital for any affair; allow to operation but it must operation by

legal from information enquiry by the Office of Off-Budgetary Management, the Comptroller General’s

Department, Finance Ministry had made on the revolving fund manual for government agency or

public agency use to guideline in the study, consideration and prepare the information for establish

the revolving fund and conclude that “revolving capital” meaning the fund or revolving capital,

finance or revolving finance which is a kind of the off-budgetary that establish by necessary of the

public agency or according to a policy of the government rely on the authorize accordance with the

Treasury Reserves Act.

To form the revolving capital; particular, allow to event that the activities that the government

agency or public agency must be operation according to duty for public benefits or for economic

benefits or for support the standard living or facilitate to the people and can’t use the procedures

accordance with regulations of public sector. The activities can establish the revolving fund; they

must be the activities that have explicitly objectives and it can take the revenue from operation return

to accumulation as the income source of the capital revolving which it must not came from only

budget by allow to take that revenue to accumulation for disburse by it must not deliver to the





treasure which primary characteristic of revolving capital that establish; it must have the

characteristic as following:

• The operation formation must no duplicate with the revolving capital that exist operation or no

duplicate with key function of the other public agency or the operation of its same as the normal

affair of the government agency.

• Shall be operated in the way that it is not competitive with the private sector/state owned

enterprise or the activities that private sector/state owned enterprise can operate.

• Revolving capital that establish accordance with a policy of the government for benefits in any

operation that necessary and have important in any time period; must specified to operation time

and explicitly budget for operation.

The procedure for establish the revolving capital can divide as 3 main parts as follows:

(A) Offer to establish the revolving capital

• The agency that requires for establish the revolving capital shall consider to select the method of

establish the revolving capital as mentioned above.

• The agency that requires for establish the revolving capital must prepare the details according to

principle of establish the revolving capital and then deliver to the Comptroller General’s

Department for complete inspection of details.

• The Comptroller General’s Department shall deliver the revolving capital form information to the

revolving capital form scrutinize committee for suggestion.

• The Comptroller General’s Department informs the consequences of the committee to the

agency that require for establish the revolving capital acknowledge.

(B) Present to the Cabinet for approve.

• The Comptroller General’s Department presents the consequence of the committee to the

Secretariat of the Cabinet.

• In case that the agency requires the revolving capital subject the provision of the Expenditure

Budget Act, B.E…; given to the agency prepare the addition information with consequence of

the committee to the Secretariat of the Cabinet.

• The Secretariat of the Cabinet presents the revolving capital form information to the Cabinet for

approve of the revolving capital form principle.

• The Secretariat of the Cabinet informs the consequence to the agency that require for establish

the revolving capital acknowledge.

• In case that the Cabinet approves of the principle.





• If the agency requires for establish the revolving capital form by legislation the particular Act.

The Secretariat of the Cabinet shall deliver such bill to the Juridical Council for consider before

present to the House of Representatives and Senates for approve.

• If the agency requires for establish the revolving capital form subject the provision of the

Expenditure Budget Act, B.E… The agency must operation for obtain the budget allocation for

use to primary capital in the revolving capital by the Bureau of the Budget shall be determines as

one section in the Expenditure Budget Bill, B.E… for present to the House of Representatives

and Senates for approve.

(C) Operation after established the revolving capital

• After that the Act related with establish the revolving capital enter into force. Principal agency of

revolving capital must prepare the revolving capital administration regulation and other

regulations present to authorizer for approve before operation which it shall be divide as 2 cases

as following:

• In case that the agency that requires for establish the revolving capital by legislation the

particular Act; given to prepare the revolving capital administration regulation and other

regulations present to authorizer that specified in the particular Act such as the Finance Ministry

or Revolving Capital Committee (depend on each case) consider for approve before declare

such regulation.

• In case that the agency that requires for establish the revolving capital subject the provision of

the Expenditure Budget Act, B.E…; given to prepare the related revolving capital administration

regulation and other regulations present to the Finance Minister consider for approve before

declare such regulation.

• Upon the related revolving capital administration regulation and other regulations enter into

force; given the principal public agency of the revolving capital informs to the Finance Ministry

(Comptroller General’s Department) together with ask for permission to open an account bank of

the revolving capital with the Finance Ministry.

Upon the Bureau of the Budget already approves the installment finance or upon it receives the

money from other sources that specified to revenue of the revolving capital; given such public

agency take such money deliver to the revolving capital account for maintain in the Finance

Ministry.

(2) To increase the power of OTP for support to act as CTO by specified the duties of OTP in act as CTO

in the Revolving Fund Form Act for effect to addition and expand the power of OTP for support the

operation of CTO.





The duties of OTP according to specified in clause 2 of ministerial regulations divided the

government agency of OTP, the Ministry of Transport, B.E. 2552 (Ministerial Regulations Divided the

Government Agency, OTP) which specified that “given OTP, the Ministry of Transport has affair

related with suggestion the policy and main plan, master plan and transport and traffic development

strategic, safety and environment of the country transport system and it has duties as following:

1. To study, analysis and prepare the main plan, master plan, investment plan of the transport and

traffics in the country includes monitor and assessment the performance according to such plan.

2. To study, suggestion the policy and standard, traffic system management standard conformity

with the main plan of the transport and traffic, analysis and screen for suitable of plan and traffic

system management project presents to the Land Transport System Management Committee

includes operation accordance with Act related with the Land Transport System Management

Committee and related other Acts.

3. To study, analysis and prepare the report of the transport and traffic, safety and environment in

the transport system.

4. To study, analysis and research for prepare the report and tendency of the transport and traffic

either in economic and safety and environment and information system and data of the transport

and traffic includes the intellectual transport and traffic technologies development.

5. Other operations accordance with specified by law given to duties of the office or according to

assign from the Ministry or the Cabinet.

As per the consideration of the provision of the ministerial regulation divided the government

agency, OTP as mentioned above found that non-power in employ or regulate or supervise CTO.

According to clause 5, however, can issue a ministerial regulation or given the Cabinet has resolution

for assign the other duties of OTP other than main duties that specified in clause 1-4.

Therefore, can specified to OTP has power in employ or regulate or supervise CTO by given

the Ministry of Transport which is principal ministry presents to the Cabinet for amendment and

addition of the ministerial regulation divided the government agency, OTP or issue a new ministerial

regulation for increase the power of OTP for comprehensive to the power for employ or regulate or

supervise of CTO. For increase of the power of OTP, OTP argue that it should be increase for

comprehensive to power of OTP as follows:

1. Increasing the power of the common ticketing management and includes the power for employ or

regulate or supervise CTO and

2. Increasing the power for manage of income and receive the profit.





3.1.1.1.2 Advantages and disadvantages analysis

Advantages

(1) The public sector have power, regulate, supervise and set a policy includes fully inspection the

status of operation because OTP is the government agency must take the policies of the public

sector to operation.

(2) The public sector can control the operation expenditure includes monitor and supervise both

revenue and expense of the revolving fund.

(3) CTO receives support the budget from directly public sector because it is the government agency.

(4) The operation has transparency because operation of the government agency has inspection and

must make a report which more inspection processes than operation of the private sector.

Disadvantages

(1) For amendment the power of OTP for more power in the operation of common ticketing system or

employ or regulate or supervise CTO; it may be over the power domain of OTP which it is the agency

which established for planning and set a traffic policy; not practices or regulate or supervise directly

in the different projects so that it must present to the Cabinet for consider.

(2) For establish the revolving fund by legislation the Act; it has restriction in time period of legislation

and procedure complexity.

(3) For operation of CTO; it has restriction such as liquidity of operation because OTP is the government

agency that must operation according to regulations and laws, other regulations that enforce to the

government agency which it may includes purchasing process which the common ticketing

administration is necessary to rely on liquidity for operation because the common ticketing system is

system that must rely on stability and efficiency technology so that OTP must continuously study the

technologies, development and update and maintenance which may be use high cost for investment.





3.1.1.2 Option 1.2: Establish a new department level government agency to act as CTO

In case that the power increase of OTP to act as CTO exceed its scope of work according to the

objectives in the establishment of OTP or there are any restrictions that OTP cannot act as CTO. In the second

way, specified to establish for new government agency for act as CTO by receive duties and properties that

must use and related with the operation of common ticketing system from OTP. The new government agency

should has status equality to the department as juristic person because the operation of common ticketing

system is necessary to sign on the different legal transactions such as purchasing process include financial

operations and for the agency has authorize to sign on the different legal transactions so that it has status as

the juristic person and establish to the agency at department level and can establish by legislation a act by

specify to establish the revolving fund for support the financial administration both the revenue and

expenditure of the new agency from the operation of common ticketing system and there are procedures as

follows:




To establish CTO by legislation an act since CTO shall be a government agency that is juristic person for

achieve of different operations of CTO such as purchasing process and sign on the different legal

transactions. Therefore, for establish the new government agency at department level by legislation the Act

which has objective for establish such as specify the power domain to the agency and for the agency can

sustain and cannot terminate and abolish because the status of the agency should be sustain and permanent





because the operation of common ticketing system must rely on stability agency and can continue service

provide and development for good performance in the common ticketing administration. Therefore, it must

conduct as follows:

(A) Principal Ministry (Ministry of Transport in this case) permissions to establish the government

agency accordance with Act for improve the ministry, division, department or the Public

Administration Act3 by take the subject of establish the government agency presents to the

Committee Developed Bureaucratic Structures of the Ministry and the Office of Committee

Developed Bureaucratic Structures before presents to the Cabinet by conduct as follows:

o To made the elucidation according to inspection criteria by necessary for legislation.

o To made the summary of principles in the bill.

o To made the comparative table in case of addition and amendment or improve the

existing Act.

(B) Office of Committee Developed Bureaucratic Structures operates to given the Secretariat of the

Cabinet inspects the reason and necessary for legislation of Act of the government agency

according to different issues and if found that there is any issue that the government agency is

not answer; given the Secretariat of the Cabinet return the bill to the government agency

immediately.

(C) Council of State of Thailand inspects the bill by inspects the reason and necessary for legislation

of Act and if saw that the government agency is not answer in any issue; given the Council of

State of Thailand return that bill to the Secretariat of the Cabinet for answer such issue before.

The elucidation for establish the government agency have contents as follows:

1. Affair Analysis

2. Reasons and necessary for establishment.

3. Scop of work and authority of the government agency.

4. Policy, main plan of the government that responsible by the government agency.

3 Public Administration Act, B.E. 2534

“Section 7: Given arranges the central administration regulation as follows:

…

(4) Department or Government Agency that called as other and has status as department which is under the

jurisdiction of the Office of the Prime Minister, Ministry or Bureau…”

“Section 8: To establish, combination or transfer the government agency accordance with Section 7; given legislation

as Act…”





5. Work load

6. Expenditure

7. Official workforce

8. Bill divides of the government agency.

9. Other elucidation. (if any)

Figure 3-6 Steps to propose the establishment of a government agency





Figure 3-7 Steps to propose a department level government agency internal division ministry’s rule







(1) The new CTO shall receive of duties and power and properties such as common ticketing system

and common ticketing standard and CCH system from OTP by this transfer must carry out

accordance with regulations of the Office of the Prime Minister related with the parcels, B.E. 2535

and amendment as follows:

(A) Annual parcel inspection of the government agency before the end of September of every year,

accordance with regulations according to clause 155 of this regulation.4

4 The office of the prime minister regulations related with parcels, B.E. 2535 and amendment

Clause 155: Before the end of September of every year; given the head of the government agency or supervisor who

have parcels for disburse according to clause 153 depend on case; appointment the officer in the government agency or that

agency who not the parcels officer of 1 person or more by necessary for inspects receive and disburse the parcels from

October, 1 on previous year to September, 30 on current year and count the parcels at the day of that time.

In inspects accordance with paragraph 1; should be start inspects the parcels in first workday of October for correct

of receive and disburse. The existing parcels are correct to an account or register or not. The causes of deficit, damage parcels,

or lose or any parcels that not necessary for use in the government agency and presents the inspection report to appointee

within 30 workdays from the day that inspects.

Upon the appointee receive the report from inspector already; the appointee must deliver by order to the head of the

government agency of 1 set and deliver the report copy to the Office of the Auditor-General of Thailand or Regional Office

depend on each case of 1 set and for the Regional Administration Agency must deliver to principal government agency of 1 set.

Clause 156: Upon the head of the government agency receive such report accordance with clause 155 and

appearance that there are damage, deficit or lose of the parcels or not necessary to use in the government agency; given

appointment 1 enquiry committee by take the text in clause 35 and 36 to use mutatis mutandis…





(B) After the inspection upon appearance that there are parcels that not necessary to use in the

government agency; given appointment the enquiry committee and such committee contains

with 1 committee chairman and at least 2 boards. Normally, appoint from civil official at least

level 3 or equality and in case that it is necessary or for benefits of the government; shall also

appoint the person who non civil official as board and if the committee chairman cannot perform

his duty; given the head of the government agency appoints the civil official that have such

features for act as the committee chairman and there are meeting regulations such as the

consult meeting of the board must have the committees not less than half of full board and given

the committee chairman and board has 1 vote for resolution which the resolution of the board

hold that is majority and if the equality vote; given the committee chairman can vote another 1

vote as judge vote.

(C) The head of the government agency orders to operation according to any process which upon

OTP have no power and duties for operation related with the operation of common ticketing

system, the properties were in the legal title of OTP such as the common ticketing system and

standard and CCH system which shall be use in the common ticketing operation, these

properties shall no necessary for OTP and should be transfer to the government agency

accordance with regulation; clause 157(3) herein that is CTO that new establish for use in the

operation of common ticketing system by the teamwork deliver the parcels to CTO.

(D) The agency that is supplier and the agency that is receiver must be register for deliver or receive

the parcels and inform to related agency next.





Figure 3-9 Procedure of assets transfer from OTP to the office of CTO


Advantages

(1) The new agency is the agency that has particular authority and duties to operate the common

ticketing system which shall have the special skill personnel related with the operation of common

ticketing system.

(2) The public sector has power for regulate, supervise and set a policy includes fully inspection the

operation status because OTP is the government agency that has responsible to take the policy of

the public sector to operation.

(3) The public sector can control the operation expense includes monitor and supervise both revenue

and expenditure of revolving fund.

(4) CTO can receive the budget from the public sector directly because it is an agency of the state.

(5) The operation has transparency because the operation of the government agency which must

inspection and make a report which there are more inspect procedures than of private sector.





Disadvantages

(1) The process of establishment of new government agency may be restricted by duration and

procedures in the establish which must legislation the establish the government agency Act which

including revolving fund which have complexity processes for presents the bill because the new

government agency must present the workforce amount, budget and other factors for establish.

Therefore, because the complexity processes for establish the government agency so that the time

period may not be conformity with a policy establish CTO within specified time period.

(2) For receive the properties from OTP; it have complexity processes and procedures for transfer and

may be use more time for transfer and may not be conformity with time period in the operation of

common ticketing system that accelerate for arise the common ticketing project.

(3) The operation of CTO may be restriction such as liquidity for operation because the government

agency must operate accordance with regulations and laws, other regulations that use to the

government agency which may be includes purchasing process which the operation of common

ticketing system is necessary rely on liquidity for operation because the common ticketing system is

system that must rely on stability and efficiency technology so that it must be study the technology,

development and improvement and maintenance that liquidity which may require high investment.

3.1.2 Option 2: Establish CTO as a state owned enterprise

To establish CTO as a state owned enterprise in the form of limited company which establish

accordance with the Commercial and Civil Code or a government’s business unit which established

accordance with the Emergency Decree or Decree to perform the operation of common ticketing system

under supervision of MOT. However, as OTP is the proprietor of the common ticketing system, standards and

CCH system shall transfer its proprietary to CTO. In addition, in case that CTO cannot perform any function in

operating the common ticketing system, CTO shall procure a Common Ticketing Company (CTC) to operate

such functions partially or wholly, while CTO perform the contract management to supervise CTC to perform

its tasks according to the government policies to create effective services to the cardholders. There are 2

sub-options which are;

(1) Existing state owned enterprise as CTO

(2) Establish a new state owned enterprise to act as CTO

Procedures as follow;





Figure 3-10 Option 2 state owned enterprise

3.1.2.1 Option 2.1: Existing state owned enterprise as CTO

Option 2.1 determines that the government sector such as MOT, assign the responsibilities and

authority in the common ticketing system operation to the existing state owned enterprise to act as CTO which

shall be endorsed the proprietary of assets such as the common ticketing system and standard and CCH

system and may be adjest its internal structure by deviding a department to perform in the operation of

common ticketing system. However, in case that CTO cannot perform any function in operating the common

ticketing system, CTO shall procure a Common Ticketing Company (CTC) to operate such functions partially

or wholly.





Figure 3-11 Overview of option 2.1 procedure




(1) The MOT assigns the existing state owned enterprise to act as CTO and may adjust or increase the

duties and authority in the operation of that state owned enterprise. In case that such state owned

enterprise has no power and duties in the operation of the operation of common ticketing system and

by increase such power may be increase according to resolution of the Cabinet, Emergency Decree

or Decree for such state owned enterprise is authorized to act as CTO.





(2) Endorsed the proprietary from OTP for the use in the operation of CTO and there are methods and

procedures to transfer according to clause 3.1.1.2.1 Procedures, option 1.2, second phase

Procedure – Phase 2 (option)


(1) In case that CTO cannot partly perform or all in the operation of common ticketing system; it may be

use the purchase process through the bidding for provide the operation of common ticketing system

contractor (CTC) for partly perform or all in the operation of common ticketing system with the budget

of CTO.

(2) Upon already select the CTC from bidding and after that CTO make a operation of common ticketing

system contract and CTO is “Employer” and person who selected as CTC called as “Contractor”.

(3) Person who selected as CTC according to clause (2) has CTO or other agency subject CTO that

assign which includes the consulting firms group of the operation of common ticketing system act as

regulator under terms and conditions of such contract.






Advantages

(1) The public sector in regulate and supervise of the operation of common ticketing system because

the state owned enterprise may be the government agency that must operation accordance with the

regulations and policy of the public.

(2) The public sector is still holder the legal title in the common ticketing system and standard so that the

operation of common ticketing system shall no monopoly with anyone private.

(3) To receive the budget from the government for use in the operation includes make the budget for

education, development and improvement the common ticketing system and standard and CCH

system.

(4) The operation has transparency because the agency of the public which have objectives in the

operation and must have inspection processes same as the other agency of the public sector.

(5) The organization has sustain because to establish the state owned enterprise may establish by

legislation the Public Act for clearly power domain, transparency and in the regulation and supervise

of the public sector closely and can terminate and abolish that state owned enterprise upon

legislation for terminate or abolish such state owned enterprise.

Disadvantages

(1) The operation of the existing state owned enterprise has clearly power domain includes specify the

proportion in the organization and specify the operation culture of the organization that has

characteristic of the organization and when such agency assigned for operation the new task either

budget, workforce and operation area so that it may be appear the obstacles in the common

ticketing system operation.

(2) The operation of CTO in the operation of common ticketing system; it may be appear the conflict of

interest with the existing state owned enterprise which act as the mass transit system entrepreneur

such as MRTA and SRT which if the operation of common ticketing system subject such state owned

enterprise so that appear the conflict of interest.

(3) The operation of the state owned enterprise must operation accordance with regulations and laws of

the state owned enterprise that may be appear non liquidity in the operation.

(4) Procedures in the establish and transfer the legal title in the properties from OTP may be use more

time which may not be conformity with time period for prepare a common ticketing system according

to a policy.





3.1.2.2 Option 2.2: Establish a new state owned enterprise to act as CTO

Option 2.2 determines to establish a new state owned enterprise to act as CTO. In case that it cannot

assign the task to the existing state owned enterprise or the case that the government has a policy to

establish the new agency to act as CTO subjected to the Ministry of Transport, so that there is an organization

specializes and has responsibilities toward common ticket related field. and the new state owned enterprise

can partly perform or all of the operation of common ticketing system. However, in case that CTO could not

perform any function partially or wholly, outsourcing a CTC to operate the common ticketing system partially

or wholly. The procedures are as follow:




Establishment of the state owned enterprise as per the following forms:

(1) Established by acts i.e. state owned enterprises which has influence on Thailand’s economics, its

operation significantly affect people and concerns in the exercising of governmental power such as

expropriation, stake and placing wires, including its operation requires numbers of budget and

human resources and has a complex organization structure i.e. the Government Savings Bank, State

Railway of Thailand, Electricity Generating Authority of Thailand and Metropolitan Waterworks

Authority.

(2) Established by royal acts i.e. Secondary Mortgage Corporation and Bangkok Commercial Asset

Management Co., Ltd. etc.





(3) Established by royal decrees being issued under the Act of Government Organization B.E. 2496 i.e.

state owned enterprises which its operation has less affect to people than those established by acts

and has less administrative power i.e. Market Organization, Zoo Organization, Mass Communication

Organization of Thailand and Bangkok Mass Transit Authority etc.

(4) Established by notices of the revolutionary council i.e. Expressway Authority of Thailand and National

Housing Authority etc.

(5) Established by approval resolutions of the cabinet i.e. state owned enterprise not as the juristic

person under supervision of the ministry, department, division as one unit under the commanding

organization and operating under the budget of the organization i.e. Tobacco Factory, Alcohol

Organization, Police Printing Bureau and Office of the Government Pawnshop etc.

(6) Established by the Civil and Commercial Code and pubic company laws as its establishment aims to

create more flexible and effective operation evaluated by the profit from the business operation of the

state owned enterprise each year. Shares may be held between the government and private sectors.

The government must hold shares more than 50 percent i.e. Transport Co., Ltd., Thai Airport Plc.,

Ltd. And Thailand Post Co., Ltd. etc.

CTO may be established by enacting a royal decree or an act. In addition, the state owned

enterprise could be incorporated in the form of limited company with shareholding structure of more than 50

percent shares held by the government according to the Civil and Commercial Code. The advisor had studied

and found that the state owned enterprises in the form of the limited company or public company limited are

originated from the privatization and were not directly esblished as limited company or public company

limited i.e. Airports of Thailand Plc., and Thai Airways International Plc., where the reasons of privatization are

to create more flexibility and fund raising from private sector. The establishment of the limited company as the

state owned enterprise is mostly the establishment of the limited company as the affiliate company of the state

owned enterprise to support its business function or operate business concerns to the parent company’s core

business or as a state owned enterprise operates the business not related to the exercise of government

power or affecting against the rights of the public or other organizations, but requires the flexibility. Therefore,

the state owned enterprise is incorporated in form of the company. However, on the common ticket service,

the organization must be sustainable under close control of the government. The work pattern of CTO may

affect against the rights and duties of other relevant authorities i.e. collection policy and rate fee and any

action relating to the income collection of the participating entrepreneur. Therefore, the advisor suggests that

the state owned enterprise CTO shall be established by enacting a royal decree or an act to become a

sustainable and efficient organization. The procedures of the establishment are as follows:





Procedure to establish the state owned enterprise

The establishment of a state owned enterprise by enacting the royal decree being issued under the

Act of Government Organization B.E. 24965 includes the following procedures:

(1) Minister bills the royal decree. The bill of the royal decree for establishment of the state owned

enterprise shall include contents determined in the Act of Government Organization, Section 6

which are;

(a) Name of the state owned enterprise

(b) Location of the head office

(c) Purposes of the state owned enterprise

(d) Approved capital

(e) Allocation of benefits

(f) Control and management of the state owned enterprise and power of the committees,

directors or managers

(g) Accounting, examinations and audit

(h) Other requirements

(2) The Minister submits the royal decree for establishment of the state owned enterprise to the State

owned enterprise Policy Office.

(3) The Minister submits the bill of the royal decree to the cabinet for granting approval for the royal

decree according to the royal decree regarding the submission and meeting of the cabinet B.E. 2548

and rules regarding the criteria and methods of submission to the cabinet B.E. 2548.

5 Act of Government Organization B.E. 2496

“Section 3 When the government deems proper to establish the organization to operate the business as the public interest or for

economic use or living cost support or providing the public service by using the capital from the national budget, the royal

decree should be enacted. Section 6 in the royal decree for organization by virtue of Section 3 must include the following texts:

(1) Name of the organization

(2) Location of the head office

(3) Purposes of the organization

(4) Approved capital

(5) Allotment of benefits

(6) Control and management of the state owned enterprise and power of the committee, director or manager

(7) Accounting, test and audit

Other necessary requirements causing proper business operation of the organization”





(4) The cabinet grants approval for the draft of the royal decree and submits to His Majesty for kindly

affixing the royal signature, and the relevant minister countersigns the Royal Command.

(5) Notice in the government gazette shall be effective according to the law.

Figure 3-15 Steps to issue a rolyal decree

The establishment of a new state owned enterprise by enacting the Act for establishment has the

same procedures as the establishment of a government agency, but the submission to the Office of Civil

Service Commission shall be changed to the submission to the State owned enterprise Policy Office (SEPO).





Procedure – Phase 2 (option)


If CTO could not perform its functions partially or wholly on management of the common ticket, it may

procure a CTC to operate such functions wholly or partially through bidding with the same methodology as

stated in the topic 3.1.2.1.1: Procedure, Option 2.1, Phase 2.


Advantages

(1) The government is authorized to supervise and setup policy in relation to the common ticket

management since the state owned enterprise as the government organization most observe the

rules and government policies.

(2) The government still owns the common ticket system and standard. The management is not bound

by any private enterprise.

(3) The budget is granted from the government as expenditure for the operation as well as the

establishment of the budget for education, development and improvement of the common ticket

system and standard and CCH system.

(4) The actions are transparent because the government organization has the obvious purposes of

actions and must have the examination process same as the government organization of other

categories.





(5) The organization is sustainable. Because the state owned enterprise may be established by enacting

the public law with an obvious scope of duties, be transparent and under the close control by the

government, the state owned enterprise could be dissolved when the law is enacted to dissolve the

state owned enterprise.

Disadvantages

(1) The establishment of the state owned enterprise is complicated and may require a long time

because the law must be enacted and the new state owned enterprise must be established about

the submission of the budget, recruitment of personnel and office location and must refer to the

government on the investment for the establishment.

(2) If CTO recruits CTC to manage the whole common ticket system, the power of CTO mainly relates to

the contract management. The established state owned enterprise may be unnecessarily too large,

which may cause the process and work procedure to lose the flexibility and may require the budget

from the public sector on the costs of actions.

(3) The procedures of establishment and ownership transfer for the property from the Office of Transport

and Traffic Policy and Planning (OTP) may take long time, which may be inconsistent with the

timeframe of preparation of the common ticket system based on the policy.

(4) Compliance with the official rules and specific law of the state owned enterprise may cause the

actions to lose the flexibility , and the limitations may exist on doing some activities about the

common ticket system management i.e. purchase / recruitment. The examples of laws and rules

relating to the state owned enterprise are as follows:

Table 3-1 Related laws to state owned enterprise

No. Laws, rules and regulation Important matters

1 Act of Official Information B.E. 2540

Determine the duties of the government to disclose the data to the

public and duties not to disclose some categories of data, which may

cause damage to the public.

2

Act of Standard Qualifications for directors

and employees of the state owned enterprise

B.E. 2518

Determine the qualifications and prohibitions of the persons acting as

the directors and officers of the state owned enterprise.

3 Act of Constitution of national budget audit

B.E. 2542

Determine the criteria of recruitment, qualifications as well as duties of

the national budget audit committee and determine the duties of audit

of the state owned enterprise.

4 Act of Constitution of anti-corruption and

suppression B.E. 2542

Directors and executives of highest level of the state owned enterprise

have the duties to submit the list of own assets and debts, of the

spouse and of the minor child to the Office of the Commission of






Counter-Corruption at all time to assume the position, every 3 years in

the position and upon leaving the position.

5 Act of Labor of State owned enterprise

Relation B.E. 2543

Determine the criteria of labor relation of the state owned enterprise of

all categories.

6

Act regarding the employee offense in the

organization or government authority B.E.

2502

Determine some criminal offenses of the employees performing the

duties in the state owned enterprise of all categories.

7

Act regarding the disciplinary penalty of the

government officer performing the duties in

the unit not as the government organization

B.E. 2534

Determine the disciplinary liability of the government officer

performing the duties in other units by considering that the duties in

other units as the official duties.

8 Act of Budgeting Method B.E. 2502 Determine the criteria regarding the budgeting of the government

authority and state owned enterprise

9

Act of Public Debt Management B.E. 2548

and rules of the Ministry of Finance regarding

the public debt management

Determine the loan criteria of the government authority, including the

state owned enterprise, excluding the loan debt of the state owned

enterprise without guarantee by the Ministry of Finance

10 Act of Anti-Launder & Suppression B.E. 2542

Provide the Office of Anti-Laundering and determine the offense

against the duties of the government officer, organization’s

employees, directors or employees of the state owned enterprise.

11 Civil\and Commercial Code only relating to

the limited company)

Establishment and management of the limited company, criteria and

procedures of the shareholders’ meeting, capital increase and

decrease etc.

12

Rules of the Prime Minister Bureau regarding

the investment budget of the state owned

enterprise B.E. 2550

Require the state owned enterprise to prepare the full project

investment budget and annual investment budget based on the model

and methods determined by the Office of National Social & Economic

Development as well as not allow the state owned enterprise to do

payment or to cause the debt binding upon the investment budget

other than being approved from the cabinet or committee except in

the emergency case.

13

Rules of the Ministry of Finance regarding the

distribution of shares and shares acquisition

of the official authority

Determine the criteria for shares acquisition or shares sale of the

government authorities.

14 Operation or shares owned by the official

authority or state owned enterprise B.E. 2504

Sale of the business or shares of the government authority or state

owned enterprise in some cases must be approved in principles from

the cabinet prior to further procedure.






15


the financial support for the public service of

the state owned enterprise B.E. 2554

Provide the criteria for the state owned enterprise providing the public

services based on the specific policy of the government and suffering

the loss i.e. railway, mass transportation. Could obtain the financial

support from the government.

16


the follow-up of the compliance with the state

owned enterprise development policy B.E.

2546

Determine the duties, qualifications, agenda and dismissal of the

policy supervision committee of the state owned enterprise.

17


the state owned enterprise operation

assessment B.E. 2548

Determine the duties, qualifications, agenda and dismissal of the

assessment committee of the state owned enterprise.

18

Rules of the Ministry of Finance regarding the

accounting and finance of the state owned

enterprise B.E. 2548 (not effective for the

state owned enterprise in category of the

public company)

Require the state owned enterprise to provide the proper accounting

system to be used to record the financial transaction and provide

good internal control i.e. require the bad debt reserving, provide the

criteria for allotment of the annual net profit, preparation of the report

of financial status to be forwarded to the

Office of the Auditor-General of Thailand for review.

19

With the criteria for establishment and joint

venture and control of the affiliate company of

the state owned enterprise

Provide the criteria regarding the establishment, joint venture and

control of the affiliate company of the state owned enterprise,

procedures of establishment / joint venture and duties of the affiliate

company to send the data of the company to the Ministry of Finance.

3.1.3 Option 3: CTO as a limited company

To establish the office of the common ticket system management in Option 2, the procedures are that

the Office of Transport and Traffic Policy and Planning (OTP) provides the system developer and CTO (CTO)

as the limited company from the international bidding through the contract of employment by the Office of

Transport and Traffic Policy and Planning (OTP). The Office of Transport and Traffic Policy and Planning

(OTP) still acts as the government authority performing the duties to supervise and determine the policy and

standard for the common ticket while CTO applies the policy and standard with th2 options as follows:

(1) Private company acts as CTO.

(2) Private company acts as CTO by partially outsourcing.

The supervision and management of the contract may require the authority or personnel with

knowledge and expertise about the common ticket on technique and common ticket management i.e.. Office





of Common Ticket Management being established according to the resolution of the cabinet on 3rd May 2011.

The power ad duties of CTO are determined as follows:

(1) Analysis of the related data

(a) Prepare the details of the policy and plan on management of the common ticket.

(b) Study and analyze the data of the fare rate structure in the transportation system.

(c) Propose the study result and data analysis relating to the common ticket management.

(2) Determining the policy ad standard

(a) Prepare the details of the policy and plan on management of the common ticket

(b) Determine the standard relating to the common ticket system operation.

(c) Propose the policies and standards and plans relating to the common ticket management.

(3) Supervision, follow-up and assessment

(a) Prepare the framework, standard and connection form between each entrepreneur.

(b) Determine the form, supervision mechanism and guideline for assessment of the common

ticket system management.

(c) Supervise, follow up and assess the operation of the office of common ticket management to

cause the efficient service.

(4) Coordination and operation support

(a) Coordinate and support the operation with the relevant authorities as the public and private

sector.

(b) Support the common ticket management to achieve the purposes and targets efficiently.

Therefore, the assignment for management of CTO belongs to the duties of CTO under the Office of

Transport and Traffic Policy and Planning (OTP) and may be the proper option. The actions must be subject

to the approval of the cabinet because the establishment of CTO under the resolution of the cabinet has the

initial purposes of temporary establishment only, but CTO should be the unit of common ticket management.





Figure 3-17 Option 2 Limited Company





3.1.3.1 Option 3.1: Private company acts as CTO




(1) OTP procures CTO (a the limited company) through the purchase / recruitment same as in the Phase

1, the bidder shall submit the offer of shareholding ratio in the company upon being selected.

(2) When CTO is selected in the Phase 2, CTO shall manage the common ticket system, which includes

the improvement of the front-end system of the current entrepreneur and manage and maintain CCH

System as the asset of the the Office of Transport and Traffic Policy and Planning. The the Office of

Transport and Traffic Policy and Planning allows CTO to use the assets of the the Office of Transport

and Traffic Policy and Planning i.e. system and standard of the common ticket system and CCH

System as the compensation for the management and maintenance of CCH System. CTO shall earn

an income from the management of the common ticket system.

(3) If CTO is not qualified for the management and maintenance of CCH System, CTO is allowed to

outsource for management and maintenance of the common ticket system. The procurement may be

done directly or in form of the bidding.

(4) OTP is in charge of supervising CTO as the unit providing the policy and determining the standard of

the common ticket system. The Common Ticket Office (CTO) as the office under the Office of

Transport and Traffic Policy and Planning may be directly in charge of CTO and proposes the policy

of common ticket management as well as does any action about the management and standard of

the common ticket system.






Advantages

(1) The Office of Transport and Traffic Policy and Planning must not change the internal structure of the

Office of Transport and Traffic Policy and Planning because the Office of Transport and Traffic Policy

and Planning is in charge of and supports the common ticket management. The internal unit of the

Office of Transport and Traffic Policy and Planning i.e. Common Ticket Office (CTO) with the duties

as the purposes of establishment may be assigned to supervise as well as coordinate and take other

relevant actions.

(2) The action as the private company is more flexible than the government organization because the

private company has more flexible rules and regulations for supervision and determining the

direction.

(3) The wage of CTO from the business of CTO according to the employment contract does not increase

the financial burden for the public sector.

(4) The Office of Transport and Traffic Policy and Planning only supervises the operation of CTO to meet

the government policy. It does not increase the burden against the Office of Transport and Traffic

Policy and Planning because the Office of Transport and Traffic Policy and Planning is not the

operator.

(5) The outsourcing of the contractor to perform some duties, on which CTO may not be skillful, lessens

the burden of CTO and causes better efficiency of the common ticket service of CTO.

Disadvantages

(1) The power of supervision and control of the public sector is limited as the authority in charge and as

the party, but is not authorized for the management within the organization, except that the public

sector is required to send the personnel from the public sector to assume the position in the

committee of CTO.

(2) The management by CT only may lessen the work efficiency because CTO may not be skilful for all

aspects.

(3) If it may be subject to the Act of Joint Venture because the government assets are used i.e. common

ticket system and standard and CCH system and the operation by the private sector with the

required investment from the private sector may be considered as the joint venture between the

public and private sectors.





3.1.3.2 Option 3: Private company acts as CTO by partially or wholly outsourcing




Recruit CTO by mean of bidding same as in the Topic 3.1.3.1.1 Procedure, Option 3.1, Phase 1



If CTO could not take some actions regarding the management of the common ticket jointly with CTO

i.e. management and maintenance of CCH system, CTO could recruit the contractor providing the common

ticket service to perform the duties because CTO is the private limited company. Therefore, the recruitment

must not be done through bidding and could be done directly. On recruitment, the contractor could be

selected independently, and could consider the technical abilities of the contractor.






Advantages

(1) OTP is not required to adjust its internal structure because the Office of Transport and Traffic Policy

and Planning is in charge of and supports the common ticket management. The internal unit of the

Office of Transport and Traffic Policy and Planning i.e. Common Ticket Office (CTO) with the duties

as the purposes of establishment may be assigned to supervise as well as coordinate and take other

relevant actions.

(2) The action as the private company is more flexible than the government organization because the

private company has more flexible rules and regulations for supervision and determining the

direction.

(3) The wage of CTO from the business of CTO according to the employment contract does not increase

the financial burden for the public sector.

(4) The Office of Transport and Traffic Policy and Planning only supervises the operation of CTO to meet

the government policy. It does not increase the burden against the Office of Transport and Traffic

Policy and Planning because the Office of Transport and Traffic Policy and Planning is not the

operator.

(5) The recruitment of the contractor to perform some duties, on which CTO may not be skillful, lessens

the burden of CTO and causes better efficiency of the common ticket service of CTO.

Disadvantages

The Minister as the commanding ministry submits the policy framework for the co-investment by the

private sector in the enterprise of the government under the ability of the ministry to the committee of co-

investment of the private sector in the enterprise of the government by showing the perspective, project and

importance of the government strategy y\under the liability of the ministry as being necessary or proper for co-

investment by th private sector to be consistent with the strategic plan of co-investment by the private sector

in the government enterprise.

(1) The unit as the project owner recruits the consultant to prepare the report of project study and

analysis. The consultant prepares the report in details required by the committee.

(2) The unit as the project owner submits the study and project analysis result with the details according

to the Act of Joint Venture to the minister for granting approval within 60 days.

(3) The unit as the project owner submits to the Office of State owned enterprise Policy Committee.

(a) In case of amendment within 30 days since the date of receipt of the project study and analysis

result. If the Office of State owned enterprise Policy Committee improves the details or asks for

furnishing additional documents, if the study result must be changed, the unit as the project





owner should take action at the same time and submit to the Minister to grant approval for the

improvement.

(4) If the Office of State owned enterprise Policy Committee agrees with the project, should submit to the

commit to grant approval. In case of disagreement, should submit to the committee for further

consideration. He submission must include the opinions of the Office of National Social & Economic

Development and relevant authorities.

(5) If the committee agrees with the government authority proposing the project, should submit to the

cabinet for granting approval.

(6) When the committee agrees in principles or when the cabinet grants approval in case of expenditure

of the national budget or budget of the unit as the project owner, the unit as the project owner should

prepare the draft of the invitation notice, scope of the project and draft of the joint venture contract

relating to the project based on the model and methods and form under the criteria determined by

the Office of State owned enterprise Policy Committee by approval of the committee.

(7) The unit as the project owner nominates the selection committee with the composition as being

required in the Act of Joint Venture in order to grant approval for the draft of the invitation notice,

scope of the project and draft of the joint venture contract, securities and other duties provided by

the Act.

(8) On selection of the private sector for joint venture:

(a) If the unit as the project owner and selection committee agree consistently that the bidding

method should not be used, should submit to the Office of State owned enterprise Policy

Committee for consideration. If the Office of State owned enterprise Policy Committee agree,

should submit t the committee for granting approval.

(b) If the unit as the project owner and selection committee agree inconsistently that the bidding

method should not be used, should submit to the Office of State owned enterprise Policy

Committee for consideration. If the Office of State owned enterprise Policy Committee has the

opinions that the bidding method should be used, use the bidding method. However, if the

Office of State owned enterprise Policy Committee considers that the bidding method should not

be used, should submit to the settlement committee.

(9) Within 15 days since the receipt of the selection result of the private sector and upon negotiation and

entering into the joint venture contract with the selected private sector, the selection committee

should do the following acts:

(a) Submit the selection result of private sector, negotiation points about the government benefits,

draft of the joint venture contract being negotiated with the selected joint venture for joint venture

and financial burden of the public sector and send the opinions and related documents to the





minister within 45 days since the date of receipt of the selection result of private sector from the

selection committee and

(b) Send the joint venture contract draft being negotiated with the selected private sector for joint

venture, the Office of Attorney-General should complete it and submit the joint venture contract

to the minister within 45 days since the date of receipt of the draft of the joint venture contract.

(10) When the minister receives the opinions and documents together with the draft of the joint venture

contract, should submit the whole supporting opinions to the cabinet for consideration within 30

days.

(11) When the cabinet considers the selection result of the private sector, financial burden of the public

sector, draft of the joint venture contract being approved by the Office of Attorney-General as well as

opinions of the minister. If the cabinet disagrees, return the matter to Minister to notify the selection

committee to do review. The cases according to Clauses 8 and 9 shall apply by mutatis mutandis.

Submit the result to the cabinet for final decision.

(12) When the cabinet grants approval for the selection result of the private sector and draft of the joint

venture contract, the unit as the project owner should sign name in the joint venture contract with the

selected private sector for joint venture.

(13) After signing name in the joint venture contract,, the minister should appoint a supervision committee

with the composition as being provided in the Act of Joint Venture to follow up and supervise the

project to comply with the contract as well as to perform other duties as being provided in the Act of

Joint Venture.





Figure 3-21 Steps to work on as per PPP act. B.E. 2013

3.1.4 Summary of the options for the establishment of CTO

From the option analysis of establishment of CTO of all 3 options by analyzing the advantages,

disadvantages and guidelines for establishment by considering the process and period of establishment to

suggest the most suitable establishment form, the advisor proposes the establishment form in Option 3 i.e.

establishment of CTO as the limited company upon considering the period of establishment, flexibility on

operation as CTO, the Office of State owned enterprise Policy Committee supervises the operation of CTO

based on the policy from the public sector. As the reason, the common ticket management must require the

flexibility because the operation of CTO is deemed as the medium of connection between the systems. In

addition, the establishment should include the complicated procedures and takes less time in order to

respond to the time frame provided by the public sector.





Chapter 4 CTO Organization’s Structure





4.1 Common ticketing operation 4.2 Stakeholders’ roles and duties

Figure 4-1 Common ticketing structure

The common ticket system involves

(1) Common Ticket Office : CTO

(2) Central Clearing House : CCH

(3) Transit Services Providers : Transit SPs

(4) Non-transit Services Providers : Non-transit SPs

(5) Ticket Issuers

(6) Top-up Agents

(7) Settlement Banks





Figure 4-2 Common ticketing operation

The roles and duties of each stakeholder are as follows;

4.2.1.1 CTO under OTP/ OTP as the regulators

OTP or CTO under OTP is responsible as a regulator, its duties include policy making and own the

common ticketing system and standards and CCH, and has responsibilities as follows;

(1) Propose related policies plans standards and measures suggested by CTO to government agencies

that OTP or CTO under OTP shall propose and report to.

(2) Supervise control and evaluate CTO’s performance and other related organizations by defining the

scope of works including mechanisms and supervising methodology approved and conform to the

common ticketing operational policies and contracts between OTP and CTO or other employees.

(3) Submit the results from studies and analysis of CTO to the related government agencies.

(4) Coordinate and support CTO/ CTC to achieve its objectives and targets with efficiency.





4.2.1.2 Common Ticketing Office (CTO)

CTO is responsible for the control and management of common ticket used in all transactions,

including payment for both transit and non-transit sectors. CTO is also responsible for the control, regulation,

and modification of central standards of the common ticket system. The main duties of CTO are as follows:

(1) Provide or operate a common ticketing service according to the policies and operational plan

appointed by the government, wich may includes providing an AFC system, card issuing, card

certification and common ticketing public relation and promotion. As well as study and analyze the

common ticketing development methodology to modernize and develop the common ticketing

system

(2) Suggest common ticketing plans and policies for the flexible and effective operation as well as

develop aimed for the highest effective services.

(3) Control, regulate, and modify standards and details of equipment and apparatuses related to the

common ticket system; for example, card details, card readers, and interface protocols.

(4) Validate equipment standards, including tickets, readers, and machines. Issuers and operators must

be authorized by CTO.

(5) Gather Information from transit services; then, analyze and create reports for governmental sectors

(6) Specify directions; controls and investigate the operation of central clearing house, to ensure

correctness, reliability, verifiability, and maintenance

(7) Define policies and regulations regarding card usage, data, pre-paid payment, and card loss cases

However, the functions related to common ticketing system operation and maintenance, CTO can

outsourse such functions (stated in Option 1), while CTO acts as a supervisor via a contract.

4.2.1.3 Central Clearing House : CCH

Central Clearing House or CCH is another main component of a common ticket system. The house

deals with the gathering of transaction data, processing and calculating of data, as well as revenue

apportionment. Processes data will then be sent to a settlement bank. Duties of CCH are as follows:

(1) Gather all transaction data, including fare and other payment. The data are retrieved from data

reception (from front-end equipment). CCH is also responsible for data verification and data

transformation. If there are faults occur with the data, CCH is responsible for the correction. CCH’s

responsibilities also cover designing and selling tickets, as well as transaction verification.

(2) Collect and manage common ticket data. CCH is responsible for controlling and modifying ticket

database. Common ticket system must be correspond to defined policies.





(3) Revenue apportionment. Calculated data would then be sent to settlement banks. CCH is

responsible for processing the collected data and apportioning revenue accordingly to defined

regulations.

Nevertheless, the pattern for the development of central clearing house can be made in to different

ways: 1) CTO cooperates in the development of CCH, and is also responsible for system management and

daily operation or 2) CTO recruits an outsourcing agent to be responsible for the aforementioned duties, while

CTO is responsible for monitoring CCH performance.

Figure 4-3 CCH System

4.2.1.4 Transit Services Providers : Transit SPs

There are four categories of transit services: rail, land transit, express ways, and water transit. Transit

service providers are responsible for collecting data to send to CCH, under the standards defined by CTO. To

perform such operation, transit providers require automatic fare collection (AFC) systems. The systems

represent require modification on front-end equipment, to make it compatible with a common ticket system.

For the providers which presently do not have an AFC system, they are required to invest on AFC equipment,

such as card readers, etc., that corresponds to the standards defined by CTO. CTO is responsible for

providing advices on the development of an AFC system, as well as participating in system testing. Directions

for front-end equipment modification are as follows:

(1) Renovating and modifying the existing equipment, including gates, readers, and central computer.

The system must ensure data interfacing with CCH. Transit systems that are currently in this process

are MRTA (purple line), local train (red line), as well as other electric trains.

(2) Public buses currently do not have an AFC system. They require a whole system of AFC to be

installed. Public buses are different from railways. Thus, the installation is needed to consider the





convenience of the passengers. A reader must be installed on the bus; and the data are stored in

bus driver console.

(3) Touch & Go should be used with the express ways; by installing the system at the fare booths.

Main advantage of transit providers for joining the common ticket system is that they do not have to

manage their own clearing houses. CTO would be responsible for entire processes

Figure 4-4 Front-end modification

4.2.1.5 Ticket Issuers

Ticket issuers link all secors of common tickets to the passengers. The issuers are responsible for

public relations, fare collection, and other types of payment. Major responsibilities of ticket issuers are:

(1) Supervising transactions which are related to bank cards, by issuing and selling tickets, giving

authorization for any related operations, such as operational application, load, install, delete,

extradition, personalization, or restrain the operation of third-person application.

(2) Issuers are responsible for ensuring security for the users, including pre-issuance production

processes, post-issuance processes, and final decommissioning.

(3) Issuers define the results of the application used in supporting ticket operation, and authorize the use

of application on the tickets.





4.2.1.6 Top - up Agents

Top-up agents are responsible for topping up ticket balance. The agents can be either CTO or other

providers, such as convenience stores and counter service.

(1) Top – up Agents would add up the balance by an application, and/or define

personalization/customization. This would be done accordingly to security policies.

(2) Provide equipment for users to top up the balance.

(3) Loading Agent must support multiple-trip tickets, such as monthly tickets and round-trip tickets.

The methods for topping up should cover all range of users. The users can classified as: high-

income users (A, B groups), middle-income users (B,C groups), and low-income users (C,D groups).

For A and B groups, the topping up processes should be made via the Internet, as these groups of

users have demands for convenience and are familiar with online transactions. B and C groups typically are

office workers or civil officers. These groups are more familiar with top-up kiosks and ATMs. C and D user

groups are more familiar with topping up via convenience stores, such as 7-11 and MaxValue.

Topping up agents are a major key to the success of the common ticket system. The number of

available agents should be as high as possible. The advisor believe that there should be attractive

advantages offered for top-up agents, such as commission or some extra charges when the users using the

services.

Figure 4-5 Topping-up Methods





4.2.1.7 Settlement Bank

Settlement bank is responsible for transferring money to the stakeholders, such as transit providers

and stores that join the common ticket system. The responsibilities of settlement bank are as follows:

(1) Ensure security, transparency, punctuality and reliability of the settlement. The settlement bank

should be legally authorized an licensed.

(2) Define risk management policies, as well as inform the stakeholders regarding the policies.

(3) The settlement should be made within the same day as the transaction.

(4) The settlement bank must issue a letter or a report for every settlement period.

(5) The settlement bank must have a reliable and secure settlement system. The settlement must be

transparent and acceptable by stakeholders.

Figure 4-6 Settlement system

4.2.1.8 Summary

Organization/Sector Responsibilities

Common Ticket Office (CTO) − Define common ticket equipment standards. Develop and modify

standards to ensure operation effectiveness

− Manage and regulate CCH

− Verify and authorize card issuers

− Modify front-end system





− Issue and sell tickets

Central Clearing House (CCH) − Revenue apportionment

− Collect and manage transactions

− Monitor and manage common ticket

− Establish and regulate operations

Transit/Non-transit Services

Providers (SPs)

− Provide transit services

− Provide non-transit services

Top-up agents − Top up card balance (both balance and rounds)

Ticket Issuers − Issue tickets

− Collect transaction data for the settlement bank

4.3 CTO’s nature of operation

The nature of CTO operation involve a number of operating cost and expense necessary to operate

common ticket system. As such, CTO business is designed to generate several stream of revenue to offset

the operating cost and expense incurred. With this in mind, the advisor will develop CTO to be able to operate

in a sustainable manner and require least amount of government aid.

Anyhow, as CTO is required to conduct its business as public services, rather than business-oriented nature.

Thus the design of CTO’s business model shall has the following considerations,

(1) CTO’s business shall create fair competition among every stakeholder, and CTO’s policy must not

bias toward any specific operator.

(2) Transaction fee or any other related fees will be set at a reasonable level that does not result in

financial burden to involved parties.

(3) CTO’s top priority is to create maximum satisfaction to passengers and cardholders.

(4) CTO may generate revenue up to the level that just meet the operating cost and shall not view profit-

maximizing as its goal

Details of CTO may be described as follow,





Figure 4-7 Cash flow structure

4.3.1 Sources of CTO revenue

4.3.1.1 Revenue from Clearing fee (or transaction fee)

Clearing fee will come from providing clearing services for any transaction resulted from using

common ticket, and may come from revenue apportionment services. The fee is paid by transit and non-

transit operators to CTO for the amount of transaction rendered to that operator. The clearing fee is calculated

as a percentage of the total fares value apportioned by CTO, whereby the percentage may vary base on the

size of transaction.

4.3.1.2 Revenue from Card test and certification fee

Apart from roles in transaction clearing, CTO also take roles in card testing and certification fees.

Under the ‘single standard, multiple-issuers’ scheme, any party is allowed to issue the common card. Anyhow

each party who wishes to issue their own card needs to have their cards tested and certified by CTO to

ensure that each common card issued will follow the same national card standard and specification set by

CTO. Rendering such service may result in certain expense and cost, namely card testing expenses, cost of

personnel required for card testing and certification and cost of equipment required for such operation. As a

result CTO may need to charge certain fees from ticket issuer for services of card test and certification. The

final fees may be calculated as a one-time fee basis, or base on the number of card issued basis. The final

solution is yet to be determined by the governing bodies.

4.3.1.3 Revenue from co-branded card

Similar to multiple ticket issuer schemes, CTO business also allows for co-branded card issuance,

whereby any transit or non-transit operator may partner with CTO to issue co-branded card. Co-branded card





still retain all transit products and it may also has additional features that are tailored specify to each co-

branded card issuer. Some financial institution may wish to partner with CTO to issue co-branded card that

can be used for both typical fare payment and debit/credit card payment. For rendering such services, CTO

may charge the co-branded card issuers for some amount of fee. The co-branding fee may have similar

nature to those of royalty fee, whereby the fee is calculated as a percentage of total transaction value.

4.3.1.4 Revenue from card sales

Apart from generate revenue from charging services fee, CTO also has revenue from sales of

common card. However, since CTO is established to serve public rather than to maximize its profit, thus the

card pricing will be at the level that cover the cost of card production only. In any case, CTO also distribute

the common card to certain groups of passenger without any charge for card, the group include seniors,

veterans, student, children, handicap and low-income group.

4.3.1.5 Cost and operating expenses (Variable cost)

4.3.1.5.1 Cost of card production

Cost of card production incur for every card produced, the cost include cost of chip procurement,

cost of COS (Chip operating system) development, cost of printing and other related cost such as card

transportation, card inventory management. This cost is varied to the number of card produced, whereby

currently the cost is approximately THB 31- THB 33 per card.

4.3.1.5.2 Settlement fee

The role of transaction settling is assigned by CTO to financial intuition (or settlement bank), this roles

cover transfer of money as instructed by CTO’s transaction clearing function. This action associate with the

cost of settlement, where the settlement bank may charge CTO for the service render as a percentage of total

transaction value. The fee is known as settlement fee, and the fee rate may vary depends on business

negotiation between CTO and the settlement bank.

4.3.1.5.3 Top-up fee

The transaction fee is the commission fee paid by ticket issuers to top-up agent, whereby the top-up agent

may include convenient stores, ATM and internet banking services. The fee rate charged of every top-up

depends on business negotiation with the top-up agent. The commission fee scheme is designed to

incentivize the top-up agent to expand their top – up channels and expected to result in increase

convenience to passenger as a whole. Under the case that CTO issues the common card, CTO will bear this

expense as well.





4.3.2 Cost and operating expenses (Fixed cost)

4.3.2.1 Personal expenses

The personal expenses include salary, employee benefits and compensation expenses incurred to

employing staff to operate and maintain the common ticket system. CTO is expected to employ up to 45-50

staffs in four different functions consist of Technology function, Business development functions, Marketing

and customer relationship function and Business development function, and the management level. Anyhow

the number of staff may vary base on size of CTO business, given that CTO is planned to expand its business

in the future.

4.3.2.2 System Maintenance

The operation of common ticket system involve installation and maintaining a number of sophisticate

system include central clearing house system, card management system, back-up and recovery system and

top-up system. There system, both hardware and software requires constant maintenance by system

specialists and may incur system maintenance cost to CTO

4.3.2.3 Telecommunication

The common ticket system involve with large amount of important data communication from front-end

equipment to back-end system, the transfer of data include transfer of transaction data, top-up data and

apportionment data. To ensure that the transfer of data is done in very secure and timely manner, CTO need

to lease telecommunication line and related facility to uses exclusively in transferring common ticket data.

4.3.2.4 Rental expenses

CTO operations also involve with renting of office space to house operating staff and other related

equipment, and thus may incur related rental expenses.

4.3.2.5 Other expenses

Other miscellaneous expenses related to operation of CTO may include office supply,

lighting and power expense depreciation and travel expenses

4.4 CTO organization structure

CTO’s organization is designed to consist of 4 main functions include, Technology function, Business

development functions, Marketing and customer relationship function and Business development function.

The advisor estimated that the number of employee required for operation is 50 persons as show in Error!

Reference source not found. , and the required office space is approximately 600 sq.m. to 800 sq.m.





Figure 4-8 CTO organization structure

The details of each function can be described as follow

Table 4-1 Roles and responsibilities of each function under CTO

Functions Roles and responsibilities

Supporting functions

− General administrative functions include, accounting and

finance function, human resource management, legal

function and other supportive function

− Public relation management to ensure passengers’

awareness on common ticket usage. PR function is also

responsible for informing the public about benefits of

common ticket

− General affair function is mainly responsible for supporting

function, include documentation, meeting arrange

Technology function

− Technology function is responsible for system management,

hardware and software maintenance, key &card system

management and to provide technological support.

− The function is also responsible for maintain and update

card standard.

CEO

Supporting functions

Accounting/Finance

HR

Legal

Policy Support

GeneralAffair

PublicRelation

Technology function

Card management

Equipmenttest lab

Card test &certification

Data Center

Settlement &Clearing

System maintenance

Marketing and sales function

Card Warehouse

Business development functions

Marketing and Sales

StakeholderManagement

Call Center

Website

Planning

New business development

Technology planning

CTO Space Space

Card certification center 150 sq.m.

Card warehouse 155 sq.m.

Test lab 115 sq.m.

Admin. Office 200 - 400 sq.m.

Total 600 - 800 sq.m.

Common Ticket Board

Govern CTO operation

Card manufacturing





− Assist other ticket issuers in card development, and also

responsible for certify the card issuance by other parties

Marketing and sales

function

− Marketing and sales function is assigned to carry out key

marketing activities including campaigning product

launching and advertisement. This aims to increase number

of cardholders.

Business development

function

− Business development function has its roles in development

of common ticket system expansion plan. The common

ticket system has goal in maximizing uses of common card,

and to ensure that common ticket system is coped with most

recent technology.





Chapter 5 Operational Policies and Strategic Plan





5.1 Operational Policies

5.1.1 CTO’s Operational Policies

5.1.1.1 Overview of CTO’s Operational Policies

The current automatic fare collection (AFC) system is stand-alone. Each service provider has to

manage the collection system by itself. Such system has barrier in connecting the revenue collection systems

from each provider and therefore impede the development of common ticket system, which allows the use of

one ticket to travel through various public transportations (e.g., bus, sky train, and express way). The ticket

also can be developed to support other commercial transactions.

Additionally, as the coordination of revenue collection systems of each service provider have not

been viably implemented, the common ticket system is hard to be developed. Therefore, the Government has

to establish the Common Ticket Office: CTO to become the main agency who is responsible to supervise and

regulate the system effectively. Moreover, the Government also need to develop Central Clearing House: CCH

to support collection and clearing of both transit and non-transit transaction,

According to CTO’s operating structure, CTO is accountable for collecting and apportioning the

transaction, in accordance with the initial principal, of service providers in both transit and non-transit sectors.

CCH will collect and evaluate the information regarding the transaction from each provider and then submit

the result to the settlement bank.

For the success of development, the important factors are as follows;

1. The universal application of the ticket

2. The support to non-transportation sectors

3. Single standard with different card issuers

4. Multiple-flexibility and scalability of the system

5. Ability to make the transaction accurate, reliable, transparent, and timely





Figure 5-1 Uses of Common Ticket

5.1.2 Single-Standard and Multiple-Issuers Policy

To implement the common ticketing system effectively and fair to every party, the advisor believe that the

single-standard and multiple-issuers scheme is the most suitable policy for the system implementation. Such

policy specifies that there can be many card issuers, whose qualifications are in accordance with the

guideline set by CTO, and the issued cards have to comply with single standard for the fare collection

process both in transit and non-transit sectors





Figure 5-2 Single Standard – Multiple issuers

5.1.3 Co-branded card

To make common ticketing system available for various uses, the advisor suggest that the policy should allow

other service providers in both transit and non-transit to issue the card. This will support the use of common

ticket and thus enhance its varieties.

The coordination of card issuance with financial institutions and other commercial sectors will allow customers

to deduct the payment directly from debit/credit file and support other marketing activities such as reward

points or any discount promotion.

One successful example is the case of Taipei Smart Card Corporation (TSCC), which is responsible for

common ticketing system management in Taipei. The company cooperated with the commercial banks in

designing the system to function transit file and debit/credit file in single card. Moreover, cardholders can

easily top up money in the card by deducting automatically from credit card. The fee for such service is USD

15, or THB 450, per one user and charged at first time only. TSCC expects to issue 2.2 million tickets within 3

years6.

6 Sources: Co-branded Multiplication contactless smart card

NC

Rail System BUS System Ferry System Toll System

All MRTA lines

Airport rail link

and future SRT

lines

BTS System

Air-con BMTA

Bus

Regular BMTA

Bus

Private-owned

Bus

Chaopraya

Express Boat

River-Crossing

Boat

EXAT Toll system

DOH Toll System

Don Muang Toll Way

Ticket Issuers

“Single Common Card cover all transportation mode”

“Multiple-Issuers issue

card under same standard”





Figure 5-3 Example of Co-branding card issuance

5.1.4 Card Management Policy and Fare Products

Topics Details

Card Usage

Card personalization Include details of cardholder such as name, address, age, and

contract number.

The card personalization benefit in contacting cardholders if they loss

their cards and assigning the right to other people.

Card activation Card will be activated upon first top-up.

Card lost condition The conditions of card lost have to be clearly indicated.

Principally, the card is lost by the following conditions;

- The cards have not been used or topped-up for 5 years.

- Cardholders report the card lost.

After 5 years, the system will delete the information of the card and

transfer the remaining money to the specific cash account for card lost

condition.

Once card is lost, the system will terminate the availability of card

within 30 minutes for misuse and fraudulent protection.

Claim of card lost Cardholders can reimburse the remaining money in their card only in

case of personalized card.

The process will be completed within 14 days.

Such conditions aims to prevent the excess of unessential information

in the system.

Max. card balance The maximum balance is THB 10,000.





Topics Details

The amount can be adjusted according to cardholders’ needs, e.g. the

maximum balance can be reduced in case of youth.

Max. top-up per time Max top-up per time is THB 1,000. The top-up limit is 10 times per day.

Max. negative balance Maximum negative balance is the payment of current travel route.

Card Issuing

Ticket issuer The system supports multiple issuers who have the qualifications in

accordance with the standard proposed by CTO.

The issuance has to conform with the standard proposed by CTO who

is responsible for testing and issuing the certification.

Co-branded The system allows non-transit operators to participate in card design,

enhancing the use of card beyond the transportation sector.

Post-paid/ Pre - paid Card issued by CTO will be pre-paid and stored value but the system

also supports the post-paid card if other parties issue such card.

Fare Product

Fare Product Apart from storing value, the card also supports fares of other

products in accordance with the riders’ needs.

Unlimited Trip Product

(Period pass)

The product includes unlimited one-day trip card.

The card type can be either multi-sector or single-sector

transportation.

The price depends on types of card.

Trip-based product Trip-based feature such as travelling up to 40 trips within 30 days.

The price depends on a number of trip and types of transportation.

Fixed - Journey Limit the route of travel such as from home to office

The price will be lower from that of normal card.

1) Type of Common Fare Product





Figure 5-4 Fare rates comparison

2) Type of Common Fare Product

Figure 5-4, shows that these tickets are provided with a wide range of fare products and covers all forms of

money. Initially, it is expected that the products consist of single-trip card, stored-value card with a discount

or exemption of transit fee (Free or discount-transfer), daily tickets (Day pass) which passengers able to use

unlimited public transport within a specified period.

3) Policy on Single Journey Ticket

The policy on single journey ticket (SJT) is required when there is ‘common paid area’ exist between two

different public transportation modes, as the SJT system need to accommodate transaction clearing between

these modes. In addition, the fare media used in SJT system is needed to be identical in both form factor and

interfacing standard to enable interoperability between two different public transportation modes. For

example, magnetic single journey ticket is not applicable for token-based reader. Thus there is need to

determine the common single journey fare media to be used across all single journey ticket system.

Fare Product

SJT/ Cash

SVT

Day Pass(1-day

unlimited trip)

Limited time/Limited trip

Concession Card

Intermodal(Discount upon

transfer)

Services Providers

NC

Current Fare Product NC Fare Product





Table 5-1 Comparison of Available SJT Fare Media

Magnetic

FeliCa MIFARE Type B

Lite Lite S Ultralight Ultralight C Ultralight EV1

Low Cost

Contactless

Ticket

Card Standard ISO/IEC

7810, ISO/IEC

7811, ISO/IEC

7812, ISO/IEC

7813, ISO 8583,

and ISO/IEC 4909

ISO/IEC

18092

ISO/IEC

18092

ISO/IEC 14443-

A,

ISO 7816

ISO/IEC 14443-

A,

ISO 7816

ISO/IEC

14443-A,

ISO 7816

ISO 14443B,

ISO 15693

Chip (Hi-Core) RC-S965 RC-S966 Ultralight Ultralight C Ultralight EV1 Inside (Pico

Pass),

Samsung,

Infineon

RF Protocol N/A Type C Type C Type A Type A Type A Type B

Security N/A 3DES 3DES N/A 3DES ECC DES/3DES

Speed N/A

∼202

kbits/sec

∼202

kbits/sec ∼106 kbits/sec ∼106 kbits/sec ∼106 kbits/sec

∼106

kbits/sec

Card Price

Lowest

High

∼THB

28/0.5M

Medium

∼THB

14/0.5M

Low

∼THB 7.5/1M

Low

∼THB 9/1M

Low

∼THB 7.5/1M High

Life Cycle ∼5 yrs ∼7 yrs or

50,000

cycles

∼7 yrs or

50,000

cycles

∼5 yrs or

10,000 cycles

∼5 yrs or

10,000 cycles

∼5 yrs or

10,000 cycles

∼10 yrs or

100,000

cycles

Deployment Bangkok, Japan India,

Bangkok

Expected

launch

2013

Singapore

(2012), Atlanta,

Bangkok,

Miami, San

Francisco,

Dubai, Oslo,

Amsterdam,

and Moscow

Hong Kong Expected

launch 2013

Singapore

(2007-2012),

Korea

Currently, there are different types and forms of products used as fare media in public transport system. Each

of which has different characteristics and functions, which can be summarized as follow

http://en.wikipedia.org/wiki/ISO/IEC_7810








http://en.wikipedia.org/wiki/ISO_8583

http://en.wikipedia.org/w/index.php?title=ISO/IEC_4909&action=edit&redlink=1





Table 5-2 The Single Journey Ticket Fare Media in Existing Transportation System

Modes Fare Media Technology

BMCL (MRTA) Contactless Smart Token (CST)

Product: Sony FeliCa

RF Protocol: Type C

Reader type :A, B, C

Suvarnabhumi Airport Rail

Link

Contactless Smart Token (CST)

Product: MIFARE Ultralight

RF Protocol: Type A


BTS Magnatic Stripe Card

Product: Magnetic

RF Protocol: N/A


BRT Contactless Smart Ticket (CST)

Product: MIFARE Ultralight

RF Protocol: Type A


To determine the common fare media for all single journey ticket system, it is needed to consider the

technology, and the form factor of single journey ticket currently in use. For the case of BMCL (MRTA-Blue

line), the token form media is used, thus the other line that may linked to MRT blue line is needed to accept

token based fare media as well. There are 4 options in choosing appropriate fare media for common single

journey ticket system as follow,

1. Uses the fare media currently in use (FeliCa Lite; RC-890)

PROs Do not require to modify the current single journey ticket reader.

CONs The fare media currently in used is slightly outdated, and there is newer version of

technology to replace them. To continue to use their fare media may incurred unnecessary

cost, as the supply of current fare media may be reduce.

2. FeliCa (FeliCa Lite S) - Token

PROs The newer version of FeliCa token can supplied with much lower cost, and it is capable of

higher processing power, and has better security.

CONs FeliCa Lite S fare media is not backward compatible with existing or earlier version of

firmware. Thus it is required to modify readers’ firmware and hardware to accept FeliCa

Lite S





3. Mifare (Mifare Ultralight, Mifare Ultralight C)

PROs Mifare Ultralight C is capable of data processing with higher security compare to the single

journey ticket in used today. Also Mifare Ultralight C has considerably lower cost compare to

FeliCa Lite S.

CONs Mifare Ultralight C has lower processing power, and there is also need to modify current

reader to accept Mifare Ultralight C. Anyhow, the scale of hardware modification is much

smaller comparing to the case of adopting FeliCa Lite S.

4. Type B Fare media

PROs Type B Fare media generally has lower cost, and high security than the existing single

journey fare media. However the Type B Fare media still has higher cost than Mifare

Ultraligh C.

CONs Type B fare media has lower processing power compare to the current fare media. Also, it is

required to modify the existing firmware and hardware (readers) to be compatible with Type

B fare media

Figure 5-5 Example of recyclable single journey ticket

5.2 Strategic Plan

In order to achieve the mission and goals and be successful in common ticketing management

policy, it has to determine the strategic plan, operation strategy and also the strategic aim to set

organization’s operation direction. The strategic plan is the master plan to determine the targets and growth

direction of organization in overall perspective to be efficient in common ticketing management system.

Thus, the advisors define the primary strategic plan to apply for common ticketing system

management as follow;

5.2.1 Mission

Mission of CTO is to be the intermediary between government and other transit providers to operate

based on related government policies. Government policy aims CTO is the main department to manage the

common ticketing system. Thus, CTO’s mission can be defining as follow;





(1) Provide policies, standards and create the development plans of common ticketing system.

(2) Study, analyze and develop technology and innovation in common ticketing system.

(3) Control, regulate, monitor and evaluate to be efficient common ticketing system management.

(4) Provide the development plan and disseminate information and news of common ticketing system.

(5) Coordinate and support the operation that relevant organization or according to the laws or the jobs

that have been assigned.

5.2.2 Strategies of CTO

To satisfy the stated missions, CTO will follow these strategies,

Strategy 1 Provide suitable policies, standards, development plan of common ticketing system.

Strategy 2 Constantly research and develop the common ticketing system and adopt innovative

technic.

Strategy 3 Coordinate, monitor, regulate and evaluate common ticketing system to achieve the

efficiency in common ticketing management.

5.2.2.1 Strategy 1 Provide suitable policies, standards, development plan of common ticketing system

5.2.2.1.1 Strategy 1 Develop common ticketing policies and plans

Objective is to provide the master plan of common ticketing system and to be used as the guidelines

for efficient operation.

5.2.2.1.2 Strategy 2 Public Relation

Objective is to publicly create motivation and understanding on common ticket. The means of public

relation may include mass media i.e. television, magazine, boothlet or social media i.e. facebook and twitter.

5.2.2.2 Strategy 2 Constantly research and develop the common ticketing system and adopt

innovative technic.

5.2.2.2.1 Strategy 1 Research and develop innovative technic for safety and efficient operation in common

ticketing system

Common ticketing system’s development plan has to be reliable and productive, be able to provide

proper services to customers. Moreover, development has to be up-to-date to the global standard.

5.2.2.2.2 Strategy 2 Provide a pilot project according to the study and analysis.

Objective is to apply technology and innovation of common ticketing system suitable to Thailand’s

environment. The development of common ticketing system is to achieve efficiency and effectiveness of

operation and be in line with the global development of common ticketing system as well.





5.2.2.3 Strategy 3 Coordination, regulation and evaluation of common ticketing system to achieve the

efficiency in common ticketing management

5.2.2.3.1 Strategy1 Standardize employee’s performance measurement

In order to be efficient performance organization, the assessment and evaluation of employee’s

performance is needed. One of strategy is to develop appropriate performance measurement tools to

consistanntly gauge and improve the employee’s performance.

5.2.2.3.2 Strategy 2 Develope employees potential

Developeand improve employees’ potential within the organization and relevant organizations like

subcontractors though trainings and technology transfer are vital to increase the understanding of system and

operation process.

5.2.2.3.3 Strategy 3 Creating corporate culture, good governance and ethics in organization

Corporate culture, good governance and ethics in operation help to develop employees’

performance and create good working environment to impel operation efficiency and finally accomplish

organization’s objectives. The organization will also adopt internally recognizable corporate governance to

implement in CTO.

5.2.3 Strategic Goals

(1) Provide development policies, operation plan, and common ticketing system standards.

(2) Provide research and study in technology development and innovation of common ticketing system

to prepare the development plan of common ticketing system.

(3) To be efficient and effectiveness in common ticketing services and be able to provide quality

services to customers.

5.2.4 Strategic Evaluation and Monitoring

Organization’s strategic plan has to been evaluated and consistantly monitored to indentify

company’s problems and obstacles. Strategic Plan sets direction for organization’s future. Thus, the advisors

recommend the evaluation and monitoring methods to measure effectiveness of strategic plan as follow;

5.2.4.1 Monitor and Evaluation

It should be present monitoring report to management teams in order to know the status of

company’s operation and also the obstacles in operation. This information will be useful to improve the

strategic plan.





5.2.4.2 Progress Report

In order to present the status and proceed of strategic plan, CTO should provide a progress report

and the possibility of operation to be obtained the organization objectives according to strategic plan. The

progress of operation should include the indicators.

5.2.4.3 Measurement and Evaluation

It determines the evaluation criteria for strategic plan such as percentage of successful, customers’

satisfactions, and numbers of projects according to strategic plan. These will present the quality of strategic

plan and predict the goal achievement or not and use these information to review and adjust strategic plan.

5.2.4.4 Strategic Goals, Objectives, Indicators and Goals of Common Ticketing Office

Prog

ram

Man

agem

ent S

ervi

ces:

PM

S

Th

e O

ffice

of T

rans

port

and

Traf

fic P

olic

y an

d Pl

anni

ng

AgC

/ KS

CC

/ PS

K Pa

ge 5

–14

Com

mon

Tic

ketin

g O

ffice

(CTO

)

Esta

blis

hmen

t Rep

ort

Tabl

e 5-

1 Su

mm

ariz

atio

n of

Stra

tegi

c Pl

an

Stra

tegi

c O

bjec

tives

In

dica

tors

G

oals

St

rate

gy

2557

25

58

2559

25

60

Stra

tegy

1 P

rovi

de s

uita

ble

polic

ies,

stan

dard

s, d

evel

opm

ent p

lan

of

com

mon

tick

etin

g sy

stem

.

1. P

rovi

de th

e

deve

lopm

ent p

atte

rn,

polic

ies,

pla

ns, s

tand

ards

and

stan

dard

of c

omm

on

ticke

ting

syst

em.

The

perc

enta

ge o

f

succ

ess

of p

ropo

sal a

nd

reco

mm

enda

tion

of

polic

ies,

sta

ndar

ds a

nd

com

mon

tick

etin

g

deve

lopm

ent p

lan.

Perc

enta

ge

[100

%]

Perc

enta

ge

[100

%]

Perc

enta

ge

[100

%]

Perc

enta

ge

[100

%]

1. De

velo

p po

licie

s an

d pr

ovid

e

deve

lopm

ent

plan

of

co

mm

on

ticke

ting

syst

em.

2. Cr

eate

a p

ilot p

roje

ct a

ccor

ding

to

the

stud

y an

d an

alys

is.

Stra

tegy

2 C

onst

antly

rese

arch

and

deve

lop

the

com

mon

tick

etin

g sy

stem

and

adop

t inn

ovat

ive

tech

nic.

2. T

o pr

ovid

e st

udy,

anal

ysis

, te

chno

logy

deve

lopm

ent

and

inno

vatio

n in

co

mm

on

ticke

ting

syst

em.

Num

bers

of s

tudy

and

com

mon

tick

etin

g sy

stem

’s

anal

ysis

.

[1] T

opic

[1

] Top

ic

[1]

Topi

c [1

] To

pic

1. St

udy,

ana

lyze

and

dev

elop

tech

nolo

gy a

nd in

nova

tion

of

com

mon

tick

etin

g sy

stem

.

2. Pr

ovid

e a

pilo

t pro

ject

of s

tudy

and

anal

ysis

.

Stra

tegy

3 C

oord

inat

e, m

onito

r,

regu

late

and

eva

luat

e co

mm

on

ticke

ting

syst

em to

ach

ieve

the

effic

ienc

y in

com

mon

tick

etin

g

man

agem

ent.

3. T

o ha

s th

e ef

ficie

ncy

and

effe

ctiv

enes

s of

com

mon

tick

etin

g se

rvic

es

to b

e ab

le to

pro

vide

qual

ity s

ervi

ces

to

cust

omer

s.

The

perc

enta

ge o

f

succ

ess

of m

anag

emen

t’s

eval

uatio

n to

incr

ease

the

capa

city

of m

anag

emen

t.

Perc

enta

ge

[100

%]

Perc

enta

ge

[100

%]

Perc

enta

ge

[100

%]

Perc

enta

ge

[100

%]

1. Cr

eate

rile

s of

ope

ratio

n’s

eval

uatio

n of

inte

rnal

em

ploy

ees

and

outs

ourc

e em

ploy

ees.

2. Re

info

rce

the

capa

bilit

y of

inte

rnal

empl

oyee

s an

d ou

tsou

rce

empl

oyee

s.

3. St

reng

then

the

cultu

re, g

ood

gove

rnm

ent a

nd e

thic

of o

pera

tion.





Chapter 6 Risk Management





6.1 Risk Management

Risk is the potential that a chosen action or activity will lead to a loss or an undesirable outcome to

company or an obstacle to achieve organization’s goals.

Risk management is vital to drive an organization to growth and achieve its goals. It also pushes on

the organization management to be efficient. It can reduce or eliminate risk in proper ways by identify,

evaluate, and determine the risk management strategy that suitable for each risks.

6.2 Risk Factors

The risks of each organization can be difference due to the organization characteristic, organization

process and organization culture. The operation management of common ticketing system has risks as follow;

6.2.1 Internal Factors

(1) Size of organization

The high growth of the company can increase the operational risk i.e. human error which the human

resources development could be less efficient due to incorrect in information transfer or unable to

create the corporate culture and ethics. With the increasing size of business and operation, the

management needs proper preparation for such circumstances.

(2) Capability of Top management teams

The operational risk may caused by the internal organization management which depends on the

capability of top management teams. The ability in determine strategic plan to be successful and

achieve the organization’s goals.

(3) Quality control and internal control system

The efficiency of company internal processes and internal control system are the risk factors that has

impact to human resource management’s risk. Internal control and internal audit are the mechanism

to regulate and monitor the company operation. These will reduce human error or fraud and help to

sustainable business success.

(4) System Standard

Common ticketing system development has to be admired from stakeholders. The system operation

has to be fast, accurate and safety which reflect the creditability and efficiency of system. It could be

defined as technical risk i.e. operation system and customers’ satisfaction in common ticketing

system.





6.2.2 External Risk

(1) Government Risk

It is the impact of prospective changes in legislation, policies, rules and regulations to the common ticketing

operation process. These are factors to operational risk.They have to change their operation process which

finally it will affect to CTO as well. CTO may have to change its service system.

(2) Regulatory Change

Regulatory change can be one factor of operational risk. New government policies will impact CTO

operation. CTO may have higher cost of operation i.e. hire subcontract, research cost to adopt its

nature of operation to be inline with changes in regulatory environment. Furthermore, CTO may have

to prepare new strategic plan to be in line with government policies.

(3) Technical Changes

The change in technology can causes technical risk. Common ticketing system has to improve

according to new innovation and development. Moreover, it need huge amount of investment for that

development which may cause high expenses.

(4) Risk from Stakeholders

Stakeholders that include transit providers, issuers and Settlement banks that change their policies

or operation will affect CTO’s operation. Common ticketing system has to support the stakeholders

system. In addition, the change in settlement fee and policies can rise CTO’s expenditures.

(5) Risk from Change in Numbers of Cardholders

The change in numbers of passengers is the main factor influencing CTO’s revenue. If there is less

cardholders, the revenue of CTO will be reduced and result in it to operate at least. On the other

hand, CTO also face the risk of opportunity loss, whereby CTO could not improve itself to cope with

increasing in number of cardholders.

(6) Risk from Unexpected Circumstances

Unexpected circumstances and natural disaster are uncontrollable factors and unpredictable events

however they can cause lots to impact to CTO. They are operational risk and financial risk. Thus, the

appropriate risk management such as insurance, disaster recovery center is vital for organization

because CTO may loss lots from these unexpected circumstances.

(7) Computer Hacker

Computer hacker may have access to critical information and use it without permission is one factor

to technical risk. If information can be hacked, company may loss sensitive. CTO has to prepare plan

to provide information safety efficiency and prevent hacker to access to system.





6.3 Types of Risk

(1) Operational Risk

Operational risk is the risk that can affect organization’s performance and organization operation’s

efficiency. Moreover, it also includes the loss that caused by less efficiency in regulatory and control,

operation discontinuity, human error and improper management. The primary causes are operation

procedures, employees, system and external factors i.e. delay operation, human resources

management, complaints and dissatisfaction in common ticketing services. It also include the

subcontractors management and risk of improper operation management or strategies that are not

suitable or conform to organization’s vision, mission and objectives.

(2) Technical Risk

Technical risk is the risk of computer system, hardware, software, technological system, operation

system and system interfacing which may disrupt the normal operation. In addition, it also includes

information safety because it may damage CTO and other service providers from information

leakage. Thus, information protaction system is very vital, thus, preparation to prevent damage and

loss of information leakage or use information is neccessary .

(3) Financial Risk

Financial risk is risk associated with company’s budget control. It includes financial liquidity such as

the cash management and inadequate budget for operation or not be in line with current situation.

Furthermore, it also includes the default risk both from account receivables and counterparty. These

may affect to revenues and budget of company. Cost of operation may exceed revenues which result

in liquidity problem.

6.4 Risk Management

Every business has various types if risks to confront. The risk management is important to business

plan. Risk management is a process to prevent and control the impact from various risks that may obstruct

organization to achieve objectives and goals. Risk management depends on probability of events and degree

of loss exposure. In case of the risk that has high level of risk, company has to reduce, control and prev and

set risk management standard to prevent the impact affecting the operation. It can be divided into 3

processes which are risk assessment, risk evaluation and risk management methods.

6.4.1 Risk Assessment

Risk assessment is the identification of risks that may affect to organization. It considers the business

environment of common ticketing system. There are 3 types of common ticketing system; operational risk,

technical risk and financial risk which can be identify as follow;

http://en.wikipedia.org/wiki/Risk





6.4.1.1 Operational Risk

An operational risk is defined as a risk incurred by an organization's internal activities. Operational

risk is the broad discipline focusing on the risks arising from the people, systems and processes operating

under normal circumstance. It can also include other classes of risk, such as fraud, legal risks, physical or

environmental risks. Operational risk can be identified as follow;

(1) Regulatory changes that relevant to transit system are front-end applications, fare rate which

may include transit fare and other fees. These will reflect to operation procedures, systems and

strategic plan that have to adjust and improve to be consistent with current environment.

(2) Operational risk related to changes in laws, and regulations will affect to CTO operation

because CTO has to operate under many laws and regulations. If there is any change in related

laws, CTO may need to revise its operation to cope with the changes.

(3) Some service providers are under concession agreements which will be impact to common

ticketing system management. They have to follow the government rules or concession

agreements which may affect CTO operation i.e. changing the procedures, improvement or

changing in equipments and systems to be in line with those service providers.

(4) The Urgent Government Projects affects the efficiency of project operation because it has limit

time to implement. Finally, it may inefficient in operation when compare to project that has more

flexible period of time in operation.

(5) Delay in people or system operation communication may cause damage to organization such

as system error, report mistake or mistake. Customers may be dissatisfied and could effect the

organization image.

(6) Error in human resource management includes wrong decision of top management, incapability

or unskilled of employees in common ticketing system management.

(7) Risk from subcontractors i.e. an adjustment in term of conditions, subcontractors could not be

operate or could not operate on time which impact to CTO operation.

(8) Risk from unexpected circumstances includes natural disasters. These are uncontrollable

factors which could not be predicted and may cause huge impact to business operation and

performance. Thus, it should be prevent and control immediately when it occurs in order to

minimize loss or damage of organization.

6.4.1.2 Technical Risk

(1) Technological change can occur all the time and would reflect to development system because

common ticketing system and mass transit have to develop system and new innovation to

provide convenient services to passengers. Thus, the system development consistent to new

http://en.wikipedia.org/wiki/Fraud

http://en.wikipedia.org/wiki/Legal_risk





innovation and technology is vital to CTO operation. Moreover, common ticketing system has to

be capable connect to other systems. It needs skilled employees and technologies to develop

the system.

(2) Computer and technology error i.e. system connection error, error in connection to central

clearing house, error of computer devices and operating system, etc.

(3) Continuity in common ticketing service is important to CTO because common ticketing system

has to be connecting to other system in batch in order to transfer information between service

providers, CTO, CCH, Settlement Bank and other departments. Discontinuity in common

ticketing service may cause financial loss and information report. These will affect to payment

clearing between service providers and also transit report.

(4) Poor information security may be a risk to CTO from exposting its sensitive data to public. These

are severe problem for organization both from decrease creditability and information leakage

especially the government confidential information. Thus, information management is vital to this

kind of business.

6.4.1.3 Financial Risk

(1) High investment and expenditures in common ticketing system management which CTO’s

revenues may not cover the cost of operation. Finally, CTO performance can be lose and affect

to organization’s reliability.

(2) System development of common ticketing system needs lots of investment. Common ticketing

system has to improve according to new innovation and technology to provide quality services

which needs lots of funds and can impact to CTO’s financial status.

(3) The increasing in transit fare may decrease the transit system usage which may affect CTO’s

revenues. Thus, if the fare rate is increased, it may result in decrease in number of passengers

and finally lower CTO’s revenues.

6.4.2 Risk Assessment

The risks of common ticketing system management from 6.3.1 can affect to CTO differently. The risk

evaluation can indicate the liklihood and severity of impact from each risk. These will help CTO to manage

and prepare risk management plans to meet acceptable standard. It also includes the risk monitoring and

controlling by determining criteria to measure risk levels i.e. Probability or frequency of events and harm

severity levels of those risks. These evaluations will help organization to set strategies to cope with risks. The

risk assessment can defy as follow;





6.4.2.1 Probability or frequency of events

It is the assessing risk probability or frequency of events to be occurring. It can be categorized into 5

levels which are 5) Highest 4) High 3) Moderate 2) Low and 1) Lowest.

Table 6-1 Criteria of assessing risk probability

Opportunity Level

Likelihood of occurrence Definition

5 Highest Can occur every day

4 High Can occur every month

3 Moderate Can occur every year

2 Low Can occur every 5 year

1 Lowest Least possibility to occur

Table 6-2 The Likelihood of occurrence analysis

Types of Risk Likelihood of

occurrence Definition

Operational Risk

1.1 Regulatory Change [3]

Regulatory that relevant to CTO can be changed annually depends

on the policies of government and should be able to adopt with

current environment.

1.2 Operational risk result from changes

in laws, and regulations. [3]

Laws and regulations may changes to government policy and may

lead to significant changes in CTO’s operation in both good and

bad.

1.3 Some service providers operate

under the concession contract. [3]

Service providers operate under concession contracts are

subjected requirement as stated in the contract which may obstruct

CTO’s operation.

1.4 Urgent Government Projects [4] CTO may need to operate under time constraint as passed by

agreement’s urgent policy.

1.5 Delay operation [5] Systems or human error delay operation process.

1.6 Error in human resource

management [5]

Human error due to inefficient training or wrong decision of

management can be happen every day from normal operation.

1.7 Risk from Subcontractors [2]

Contractors may not be able to perform according to term of

agreement or delaed in operation. However, this risk has less

possibility to occur because contractors have passed selection





Types of Risk Likelihood of

occurrence Definition

process and required to follow the agrement.

1.8 Risk from Unexpected

Circumstances [5]

Risks from unexpected circumstances are uncontrollable factors i.e.

sabotage and natural disasters.

Technical Risk

2.1 Technological Change [3] Common ticketing technology may change rapidly, thus, CTO

needs to be make proper preparation.

2.2 Computer and technology error [5] Computer and technology error can occur daily according to

machine usage.

2.3 Continuity in common ticketing

service [5]

Common ticketing system involve numbers of data transfer. Thus,

the system disruption may cause severe damages to shareholders.

2.4 Information Security [5]

Information transfer and data report has to be secured. The risk of

unauthorized access to information can occur daily i.e. public

information without permission or use data for personal interest.

Financial Risk

3.1 Operation investment and

expenditure [4]

CTO needs to constantly invest in its infrastructure. Low cost

recovery investment may pass risk to the organization.

3.2 High amount of investment for

required development [2]

Common ticketing system has to improve according to new

innovation and technology to provide quality services and increase

operation efficiency which actually has to develop every 5 year.

3.3 An adjustment of fare rate [3]

An adjustment of fare rate can occur annually depends on the

change in government policies and concessions agreement and

also the services providers’ policies.

3.4 Financial Institutions that have

electronic payment services go

bankrupt.

[1]

It is less likely for financial institutions that have electronic payment

services to go bankrupt because in order to join this project,

financial institutions have to be qualify and have financial stability

and also provide a good financial plan for business opportunity.





6.4.2.2 Severity of Risk

The evaluation of risks’ severity can be identifed into 5 levels which are

5) Severe 4) Major 3) Moderate 2) Minor and 1) Insignificant.

Table 6-3 Criteria of evaluation the hazard severity of circumstances

Level Consequences Definition

5 Severe Most effect to customers’ satisfaction

4 Major High affect to customers’ satisfaction

3 Moderate Moderate effect to customers’ satisfaction

2 Minor Less effect to customers’ satisfaction

1 Insignificant Less likely effect to customers’ satisfaction.

Table 6-4 The risks’ severity analysis

Types of Risk Risks’

Severity Definition

Operational Risk

1.1 Regulatory Change [4]

Regulatory changes that relevant to transit affect to

operation procedures and impact to revenues and

expenses of CTO. Thus, this risk has major impact to

CTO.

1.2 Operational risk according to change

in laws, rules and regulations. [4]

Changing in laws and regulations will be impact to CTO

operation and procedures. Thus, this risk has major

impact to CTO.

1.3 Some entrepreneurs are under

government control or have the

concession agreements.

[2]

Some entrepreneurs are under government control or

have the concession agreements which will be impact to

common ticketing system management. However, the

common ticketing system is the government policy, so

most of the policies will be benefits to this project. Thus,

this risk has minor impact to CTO.

1.4 Urgent Government Projects [3]

The Urgent Government Projects have a moderate

impact to CTO because the urgent project will limit time

in operation that may affect to operation and human

resources management.

1.5 Delay operation [4] Delayed operation may impact critical process such as

data clearing or revenue appormention and may result






Severity Definition

in harming overall business operation.

1.6 Error in human resource management [3]

Error in human resource management has a moderate

impact to CTO because it has a minor affects to

operation process. Moreover, CTO already has

evaluation and monitoring the performance of human

resource management.

1.7 Risk from contractors [2] Contractors may not perform as required in the contract

and may present moderate risk to CTO.

1.8 Risk from unexpected circumstances [5]

Risk from unexpected circumstances likes natural

disasters can cause a huge impact to business

operation and performance. It may be lose in human

resources, assets and system.

Technical Risk

2.1 Technological Change [3] Technical changes have moderate impact to CTO as

such changes can be easily mitigated.

2.2 Computer and technology error [5]

CTO’s operation is highly depending on stability of

computer system. Therefore, system failure can cause

severe damage to the business.

2.3 Continuity in common ticketing

service [4]

Discontinuity in common ticketing service may decrease

passengers’ satisfaction and also the reliability of

organization, and might lead to inaccurate calculation

and result in financial losses.

2.4 Information Security [4]

Information security risk has a major impact to CTO

because it will reflect the company’s creditability and ,

CTO may be sued for damage from public information

without permission and information leakage especially

the government’s confidential information.

Financial Risk

3.1 Operation’s investment and

expenditure [5]

The mismatch between investment and operation

expenses and revenues will impact to operation stability.

CTO operation has to rely on financial stability. This risk

can be viewed as high severity risk.

3.2 High amount of investment for [4] System development of common ticketing system needs

lots of investment. Common ticketing system has to






Severity Definition

development

improve according to new innovation and technology.

The research and development investment has a major

impact to CTO’s financial status.

3.3 An adjustment of fare rate [3]

The decreasing fare rate has a moderate impact to CTO

because it will increase the numbers of transit system

usage.

3.4 Financial Institutions that have

electronic payment services go bankrupt. [5]

Common ticketing system management has to deposit

huge amount of money to financial Institutions. In the

case of a financial institution go bankruptcy, the deposit

insured coverage is limited to THB one million per

depositor per bank will be inadequate to pay service

providers. CTO may have to pay the residual.

6.4.2.3 Risk Level

Risk Level is determined by the probability of risks occurring and the hazard severity of that risk

which has criteria as follow;

Table 6-5 Criteria of Risk Assessment Level

Risk Level

Points

(Probability x risks’

severity)

Definition

Very High 17-25 Unacceptable level, it has to be improving to be acceptable level

immediately.

High 10-16 Unacceptable level, it has to be improving to be acceptable level.

Moderate 4-9 Acceptable level but should have risk control.

Low 1-3 Acceptable level, no need for risk control or other addition

regulation.

According to risk analysis which analyze from the possibility or frequency of risk, the hazard severity

can be summarize as follow;





Table 6-6 Risk Level

Risks’

severity

5 3.4 1.5, 2.4 1.8, 2.2

4 3.2 1.1 1.2 2.3, 3.1

3 2.1 3.3 1.4 1.6

2 1.7 1.3

1

1 2 3 4 5

Probability/Frequency

Table 6-7 Summarization of Risk Level

Types of risk Probability

Level

Risks’

severity

Total

(Probability x

Hazard

severity)

Risk

Level

Operational Risk

1.1 Change in relevant policies [3] [4] [12] High

1.2 Operational risk according to change in laws,

rules and regulations. [3] [4] [12] High

1.3 Some entrepreneurs are under government

control or have the concession agreements. [3] [2] [6] Moderate

1.4 Urgent Government Projects [4] [3] [12] High

1.5 Delay operation [5] [4] [20] Very

High

1.6 Error in human resource management [5] [3] [15] High

1.7 Risk from contractors [2] [2] [4] Moderate

1.8 Risk from Unexpected Circumstances [5] [5] [25] Very

High

Technical Risk

2.1 Technological Change [3] [3] [9] Moderate





Types of risk Probability

Level

Risks’

severity

Total

(Probability x

Hazard

severity)

Risk

Level

2.2 Computer and technology error [5] [5] [25] Very

High

2.3 Continuity in common ticketing service [5] [4] [20] Very

High

2.4 Information Security [5] [4] [20] Very

High

Financial Risk

3.1 Operational investment and expenditure [4] [5] [20] Very

High

3.2 High investment for development [2] [4] [8] Moderate

3.3 An adjustment of fare rate [3] [3] [9] Moderate

3.4 Financial Institutions that have electronic

payment services go bankrupt. [1] [5] [5] Moderate

6.4.3 Risk Management Strategy

One of the key factors to be success in business is the efficient in risk management to eliminate or

reduce the impact or loss exposure to be in acceptable level. There are 4 risk management strategies which

are risk acceptance strategy, risk avoidance strategy, risk control strategy and risk transfer strategy.

6.4.3.1 Risk Acceptance Strategy

Risk acceptance strategy usually is the acceptable level or the cost of eliminating risk or control risk

is greater than loss exposures. Thus, company will do nothing to manage that risk.

6.4.3.2 Risk Avoidance Strategy

Risk avoidance strategy is to defined acceptable level of risk, whereby the risks lower, then, this level

is not worth the mitigation.

6.4.3.3 Risk control strategy

Risk control strategy is to set appropriate risk management protocols and procedures to reduce the

severity and likelihood of such risk.





6.4.3.4 Risk Transfer Strategy

Risk transfer strategy applies in the case of unpredictable of risk or event and hardly to prevent that

risk. Moreover, this risk can cause high exposure because an organization has limitation in human resource

and resources i.e. natural disaster. Thus, an organization can transfer risk by do insurance or outsource to

diversify risk that may occur from less competency in that area.

Prog

ram

Man

agem

ent S

ervi

ces:

PM

S

Th

e O

ffice

of T

rans

port

and

Traf

fic P

olic

y an

d Pl

anni

ng

AgC

/ KS

CC

/ PS

K Pa

ge 6

–15

Com

mon

Tic

ketin

g O

ffice

(CTO

)

Esta

blis

hmen

t Rep

ort

Tabl

e 6-

8 R

isk

Man

agem

ent S

trate

gy

Type

s of

Ris

k Pr

obab

ility

Leve

l

Haz

ard

seve

rity

Ris

k le

vel

Stra

tegi

es

Def

initi

on

Ope

ratio

nal R

isk

1.1

Cha

nge

in re

leva

nt p

olic

ies

[3]

[4]

Hig

h Ri

sk A

ccep

tanc

e

Regu

lato

ry c

hang

es t

hat

rele

vant

to

trans

it sy

stem

can

be

man

age

by r

isk

acce

ptan

ce b

ecau

se t

he d

uty

of C

TO i

s to

oper

ate

follo

w t

he g

over

nmen

t po

licy.

Thu

s, i

f th

ere

are

any

regu

lato

ry c

hang

es, C

TO h

as to

adm

ire th

at r

isk.

It c

ould

not

deny

thos

e po

licie

s.

1.2

Ope

ratio

nal

risk

acco

rdin

g to

cha

nge

in l

aws,

rule

s an

d re

gula

tions

. [3

] [4

] M

oder

ate

Risk

Acc

epta

nce

CTO

has

to fo

llow

the

law

s, ru

les

and

regu

latio

ns. C

TO s

houl

d

acce

pt t

hat

risk.

It

cann

ot a

void

the

ope

ratio

n ac

cord

ing

to

law

s an

d re

gula

tions

.

1.3

Som

e en

trepr

eneu

rs

are

unde

r go

vern

men

t

cont

rol o

r hav

e th

e co

nces

sion

agr

eem

ents

. [3

] [2

] M

oder

ate

Risk

Tra

nsfe

r

Som

e en

trepr

eneu

rs a

re u

nder

gov

ernm

ent c

ontro

l or h

ave

the

conc

essi

on

agre

emen

ts

whi

ch

will

be

impa

ct

to

com

mon

ticke

ting

syst

em m

anag

emen

t. C

TO c

ould

tran

sfer

that

ris

k by

aske

d fo

r the

add

ition

bud

get t

o be

abl

e to

impr

ove

syst

em in

orde

r to

su

ppor

t th

e ch

ange

in

te

rms

and

cond

ition

s or

polic

ies.

1.4

Urg

ent G

over

nmen

t Pro

ject

s [4

] [3

] H

igh

Risk

con

trol

It co

uld

be a

ble

to c

ontro

l thi

s ris

k by

det

erm

ined

the

hum

an

reso

urce

s m

anag

emen

t pl

an a

nd b

udge

ts t

o do

the

urg

ent

Prog

ram

Man

agem

ent S

ervi

ces:

PM

S

Th

e O

ffice

of T

rans

port

and

Traf

fic P

olic

y an

d Pl

anni

ng

AgC

/ KS

CC

/ PS

K Pa

ge 6

–16

Com

mon

Tic

ketin

g O

ffice

(CTO

)

Esta

blis

hmen

t Rep

ort

Type

s of

Ris

k Pr

obab

ility

Leve

l

Haz

ard

seve

rity

Ris

k le

vel

Stra

tegi

es

Def

initi

on

gove

rnm

ent p

roje

cts

to b

e ef

ficie

nt a

nd e

ffect

ive

proj

ects

.

1.5

Del

ay o

pera

tion

[5]

[4]

Hig

h Ri

sk c

ontro

l

It ca

n m

anag

e th

e pr

ojec

t del

ay b

y co

ntro

l tha

t ris

k. C

TO c

an

outs

ourc

e th

at o

pera

tion.

1.6

Erro

r in

hum

an re

sour

ce m

anag

emen

t [5

] [3

] H

igh

Risk

con

trol/

Risk

Tra

nsfe

r

This

typ

e of

ris

k ca

n m

anag

e by

ris

k co

ntro

l st

rate

gy i

.e.

train

ing,

info

rmat

ion

trans

fer

to s

taff

or e

stab

lish

inte

rnal

aud

it

depa

rtmen

t to

redu

ce th

e m

ista

ke fr

om o

pera

tions

. Mor

eove

r,

CTO

can

tra

nsfe

r th

is r

isk

by o

utso

urce

thi

s de

partm

ent

to

min

imiz

e th

e er

ror

from

uns

kille

d em

ploy

ees

or i

ncap

able

empl

oyee

s.

1.7

Risk

from

con

tract

ors

[2]

[2]

Mod

erat

e Ri

sk T

rans

fer/

Risk

con

trol

Risk

from

Sub

cont

ract

ors

can

be re

duce

by

trans

fer t

his

risk

to

thos

e su

bcon

tract

ors.

C

TO

can

dete

rmin

e pe

rform

ance

war

rant

ee i

n th

e co

ntra

ct.

It m

ay d

educ

t re

tent

ion

mon

ey t

o

cove

r th

e da

mag

e th

at

subc

ontra

ctor

m

ake

mis

take

.

Furth

erm

ore,

CTO

can

con

trol t

his

risk

by c

ontro

l, re

gula

te a

nd

eval

uate

the

perfo

rman

ce a

nd a

lso

prov

ide

train

ing

or tr

ansf

er

the

oper

atio

n pr

oces

s to

sub

cont

ract

ors.

1.8

Risk

from

Une

xpec

ted

Circ

umst

ance

s [5

] [5

] Ve

ry h

igh

Risk

Tra

nsfe

r C

TO c

an d

o in

sura

nce

to t

rans

fer

the

risk

from

une

xpec

ted

Prog

ram

Man

agem

ent S

ervi

ces:

PM

S

Th

e O

ffice

of T

rans

port

and

Traf

fic P

olic

y an

d Pl

anni

ng

AgC

/ KS

CC

/ PS

K Pa

ge 6

–17

Com

mon

Tic

ketin

g O

ffice

(CTO

)

Esta

blis

hmen

t Rep

ort

Type

s of

Ris

k Pr

obab

ility

Leve

l

Haz

ard

seve

rity

Ris

k le

vel

Stra

tegi

es

Def

initi

on

circ

umst

ance

s lik

e na

tura

l di

sast

ers,

or

terro

rists

. Th

ese

are

unco

ntro

llabl

e fa

ctor

s w

hich

cau

se h

uge

impa

ct t

o bu

sine

ss

oper

atio

n an

d hi

gh c

ost o

f dam

age.

Tech

nica

l Ris

k

2.1

Tech

nolo

gica

l Cha

nge

[3]

[3]

Mod

erat

e Ri

sk T

rans

fer

To d

ecre

ase

the

rese

arch

cos

t and

dec

reas

e m

ista

ke o

f stu

dy,

rese

arch

and

dev

elop

men

t, C

TO c

an o

utso

urce

the

res

earc

h

and

tech

nolo

gy d

evel

opm

ent a

nd in

nova

tion

whi

ch r

elev

ant t

o

com

mon

tic

ketin

g sy

stem

to

be a

pply

in

Thai

land

. It

need

s

know

ledg

e an

d sk

ill to

stu

dy a

nd d

evel

op te

chno

logy

.

2.2

Com

pute

r and

tech

nolo

gy e

rror

[5]

[5]

Very

hig

h Ri

sk c

ontro

l/

Risk

Tra

nsfe

r

Com

pute

r an

d te

chno

logy

erro

r ca

n m

anag

e by

ris

k co

ntro

l

stra

tegy

. It

can

redu

ced

by p

rovi

de t

he b

acku

p sy

stem

to

supp

ort a

nd a

men

d er

ror.

Mor

eove

r, C

TO c

an tr

ansf

er th

is ri

sk

to c

ompu

ter s

yste

m p

rovi

der b

y as

ked

for t

he w

arra

ntee

.

2.3

Con

tinui

ty in

com

mon

tick

etin

g se

rvic

e [5

] [4

] Ve

ry h

igh

Risk

Avo

idan

ce/

Risk

con

trol

CTO

can

man

age

the

disc

ontin

uity

in c

omm

on ti

cket

ing

serv

ice

prob

lem

by

risk

avoi

danc

e st

rate

gy. C

TO c

an a

void

or c

hang

e

the

oper

atio

n pr

oced

ures

whi

ch a

re th

e fa

ctor

s to

be

dela

y in

oper

atio

n.

2.4

Info

rmat

ion

Secu

rity

[5]

[4]

Very

hig

h Ri

sk c

ontro

l/ Th

is t

ype

of r

isk

can

redu

ce t

he p

roba

bilit

y to

occ

ur b

y ris

k

Prog

ram

Man

agem

ent S

ervi

ces:

PM

S

Th

e O

ffice

of T

rans

port

and

Traf

fic P

olic

y an

d Pl

anni

ng

AgC

/ KS

CC

/ PS

K Pa

ge 6

–18

Com

mon

Tic

ketin

g O

ffice

(CTO

)

Esta

blis

hmen

t Rep

ort

Type

s of

Ris

k Pr

obab

ility

Leve

l

Haz

ard

seve

rity

Ris

k le

vel

Stra

tegi

es

Def

initi

on

Risk

Tra

nsfe

r co

ntro

l stra

tegy

i.e.

trai

ning

, edu

cate

the

corp

orat

e cu

lture

and

ethi

cs i

n op

erat

ion

to i

nter

nal

empl

oyee

s. T

his

will

help

to

redu

ce fr

aud

that

rel

evan

t to

info

rmat

ion

secu

rity.

In

addi

tion,

CTO

ca

n si

gn

the

conf

iden

tialit

y ag

reem

ents

w

ith

subc

ontra

ctor

s or

int

erna

l em

ploy

ees

to p

reve

nt i

nfor

mat

ion

leak

age

whi

ch is

the

risk

trans

fer s

trate

gy.

Fina

ncia

l Ris

k

3.1

Ope

ratio

nal i

nves

tmen

t and

exp

endi

ture

[4

] [5

] Ve

ry h

igh

Risk

con

trol

Risk

con

trol

stra

tegy

can

app

ly t

o m

anag

e th

is r

isk.

CTO

shou

ld s

et th

e in

vest

men

t pla

n an

d ex

pens

es c

ontro

l to

redu

ce

the

risk

of d

efic

it or

loss

from

hig

h co

st o

f ope

ratio

n.

3.2

Hig

h in

vest

men

t for

dev

elop

men

t [2

] [4

] M

oder

ate

Risk

Tra

nsfe

r

Syst

em d

evel

opm

ent o

f com

mon

tick

etin

g sy

stem

nee

ds lo

ts o

f

inve

stm

ent.

Com

mon

tic

ketin

g sy

stem

ha

s to

im

prov

e

acco

rdin

g to

new

inn

ovat

ion.

CTO

can

tra

nsfe

r th

is r

isk

to

gove

rnm

ent.

Gov

ernm

ent s

houl

d de

term

ine

budg

ets

to s

uppo

rt

the

rese

arch

and

dev

elop

men

t.

3.3

An a

djus

tmen

t of f

are

rate

[3

] [3

] M

oder

ate

Risk

Tra

nsfe

r

CTO

sho

uld

mak

e ag

reem

ent

with

the

gov

ernm

ent

to r

ecei

ve

the

subs

idy

from

the

chan

ge in

gov

ernm

ent p

olic

y th

at im

pact

to t

he f

are

rate

. If

the

fare

rat

e is

incr

ease

, pa

ssen

gers

may

Prog

ram

Man

agem

ent S

ervi

ces:

PM

S

Th

e O

ffice

of T

rans

port

and

Traf

fic P

olic

y an

d Pl

anni

ng

AgC

/ KS

CC

/ PS

K Pa

ge 6

–19

Com

mon

Tic

ketin

g O

ffice

(CTO

)

Esta

blis

hmen

t Rep

ort

Type

s of

Ris

k Pr

obab

ility

Leve

l

Haz

ard

seve

rity

Ris

k le

vel

Stra

tegi

es

Def

initi

on

decr

ease

and

CTO

may

be

loss

.

3.4

Fina

ncia

l In

stitu

tions

th

at

have

el

ectro

nic

paym

ent s

ervi

ces

go b

ankr

upt.

[1]

[5]

Mod

erat

e Ri

sk A

void

ance

/

Risk

con

trol

The

loss

exp

osur

e fro

m t

he b

ankr

uptc

y of

fin

anci

al in

stitu

tion

can

man

age

by

risk

avoi

danc

e st

rate

gy

and

risk

cont

rol

stra

tegy

. C

TO h

as t

o do

tra

nsac

tion

with

sta

bilit

y ba

nks

or

depo

sit m

oney

to m

any

bank

s to

red

uce

the

loss

exp

osur

e. It

will

be a

larg

e da

mag

e if

CTO

dep

osit

to o

nly

one

bank

and

that

ban

k go

ban

krup

tcy.





6.4.4 Risk Monitoring

Risk monitoring must continue for the life of the project. CTO should consider the possibility of events

that could be occur and will impact to company operation and performance by provide monitoring report ,

review the risk management plan and evaluate the performance of risk management plan. Then, it can be

use this information to improve the risk management plan to increase the efficiency of risk management

operation and determine the risk management strategy.

program management services: pms common ticketing office ... · psk consultants co., ltd. program...

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