Cutting costs is more costly

New estimates shows that to cut the Elite card will cost the government Bt2,370 million.

Thailand Privilege Card Company admits that terminating its controversial Elite Card project will cost the government Bt2,370 million in direct losses.

TPC board chairman, Thongchai Sidama, revealed the results of a recent study that measured the loss to the government’s coffers if the Elite Card was scrapped.

“We have studied all sides of the issue. If we end the project completely, the government will have to pay the cost of membership fee refunds amounting to Bt2,240 million and compensation for 134 employee of around Bt18 million.

“Overall it would cost Bt2,370 million to close the project. And this does not yet include payments in case members and partners sue the company. Also, the nation’s reputation will be damaged as a result,” said the chairman.

The study follows the government’s resolution, last January, to check the impact of closing the project. The present board has eight members half of which represents TAT, the main stakeholder. It has a TAT advisor, Udom Methathamrongsiri, representing the company as its acting president.

The board and government are mulling over various options. They include finding a private sector partner, restructuring the company to be self sufficient or scaling down TPC into a TAT department.

A source on the board revealed there is now growing support to turn the project into a department of the TAT.

The TAT board will consider that option at its meeting, 29 July, but whatever option is taken it would still need approval from the Cabinet.

The company has accumulated a deficit of Bt1,431.93 million and has cash of Bt408 million. Operational costs are around Bt20 million a month. The card has 2,570 members with Korean, Japanese, and Taiwanese making up the majority.

Meanwhile Aktiv Company Limited, the sole distributor of the Elite Card, says it will not sell Elite Card membership due to the uncertain political situation in the country.

“We sell the card in the name of the government and that has caused questions as there is no clear direction from the government,” said company’s president, Soontaree Chanprasit.

She intends to hold talks with the TPC board to gain clarification on the company’s role in the future.

She claimed the company’s partners in Korea closed their office last month because it was too difficult to sell the card. It had sold 700 memberships.

Referring to TPC’s decision to curtail benefits on golf, spa, limousine, and airport lounge services, she said it would have a negative impact on up-scale members who demanded delivery of value services especially in Bangkok, Phuket and Chiang Mai.

TPC claimed it had compensated members by offering check-in at THAI’s gold card counters and a 15% discount on duty-free shopping at King Power outlets.

The company plans to send a letter to members, TAT offices overseas and the Ministry of Foreign Affairs to clarify its status and member benefits at present and once the government makes a decision.