Transport Minister Suriya Jungrungreangkit has justified the government’s modifications to the contract for the high-speed rail project that connects three airports, emphasizing that these changes are crucial for advancing the project and ensuring fairness for both the government and the concessionaire.
He stated that the revisions were necessary because both parties had failed to adhere to the original agreement. The government did not timely provide the concessionaire with the required land for construction, and the concessionaire could not start work as planned due to the Covid-19 pandemic.
While the revisions have been approved by the Eastern Economic Corridor (EEC) Policy Committee, they were not brought before the cabinet for endorsement as initially expected, according to Mr. Suriya.
The original contract was signed in 2019 between the State Railway of Thailand (SRT) and Asia Era One, a subsidiary of the Thai conglomerate Charoen Pokphand (CP) Group. This agreement included a concession to operate the Airport Rail Link as part of their joint investment plan.
The high-speed rail project, a key initiative of the EEC, aims to connect Don Mueang, Suvarnabhumi, and U-Tapao airports.
In response to allegations from the main opposition People’s Party during last week’s interpellation, which claimed that these contract revisions favor the concessionaire and could jeopardize the government’s position, Mr. Suriya stated that the revised contract has already been reviewed by the prosecution to ensure fairness for both parties and is now awaiting cabinet submission.
Finance Minister Pichai Chunhavajira, who leads the EEC committee, addressed the accusations at a recent House meeting. He acknowledged that the government’s land expropriation process took two years longer than anticipated following the 2019 contract signing. This delay, along with the economic repercussions of Covid-19 and geopolitical conflicts impacting inflation and interest rates, affected the concessionaire’s ability to secure financing for the project.
Regarding the decision to pay the concessionaire the agreed investment of 149 billion baht in instalments rather than as a lump sum after construction, Mr. Pichai explained that this strategy would reduce the total investment to approximately 120 billion baht, considering current interest rates. He noted that the total of 149 billion baht could significantly increase if payment were delayed.
Each instalment will be released only after the contracted contractor completes the necessary work, and a bank guarantee equivalent to the promised investment will be required to ensure the contractor meets future obligations.
