Transport Minister Phiphat Ratchakitprakarn has rejected a proposed contract amendment for the high-speed rail project connecting Don Mueang, Suvarnabhumi, and U-Tapao airports. The amendment aimed to change the payment structure to a “pay-as-you-build” scheme, which Phiphat said conflicts with the original agreement.
The project, signed on October 24, 2019, between the State Railway of Thailand (SRT) and Asia Era One Co, a CP Group-led consortium, has experienced delays despite initial government backing. The consortium was awarded the bid with the lowest requested co-investment of 117.2 billion baht.
In October 2021, the cabinet approved compensation measures after passenger numbers dropped due to Covid-19. Ongoing negotiations to amend the contract have failed to reach an agreement.
Phiphat emphasized that with just four months left in the current government term, efforts are focused on resolving the multi-billion-baht project. He stated that proposals to switch to a pay-as-you-build model were inconsistent with the original terms and emphasized legal compliance.
He announced plans to convene talks involving SRT, Asia Era One, and EECO to find solutions. If the project stalls, extensions to existing infrastructure, such as the Laem Chabang railway, could be explored to maintain service levels.
Phiphat clarified that the goal is to revert to the original contract terms, and canceling the project could lead to legal disputes. While acknowledging the tight timeline, he committed to using the remaining months for resolution.
Sources from EECO indicated that progress is close, with ongoing negotiations since the Cabinet approved contract amendments in principle. The process aligns with legal requirements.
If no agreement is reached, all parties agree that a new solution must be found. The contract allows for damages if the project is terminated prematurely.
EECO confirmed that shifting to a pay-as-you-build model, which ties payments to project milestones and transfers ownership upon each disbursement, does not violate the law. Negotiations have moved away from the original lump-sum payment scheme, aiming for a more incremental funding approach.