CK firms merger risks lawsuit

Construction News

The Si Rat outer ring road is under construction. The 6-lane road project is scheduled for completion at the end of 2016. (Bangkok Post photo)

The Transport Ministry may file a lawsuit against Bangkok Expressway Plc (BECL) if its merger with another firm harms the ministry’s state enterprise, said a senior transport official.

Chartchai Tipsunave, deputy permanent secretary at the Transport Ministry, said a study will be conducted to determine if and how the planned merger between BECL and Bangkok Metro Plc (BMCL) will affect concessions or projects by the Expressway Authority of Thailand (Exat).

Exat has awarded BECL a contract to build, transfer and operate the 16.7km Si Rat-Outer Ring Road Expressway, of which construction is about 60% complete. It also operates the second-stage expressway in greater Bangkok.

BMCL, the operator of the Blue Line subway train, and BECL are both subsidiaries of construction company Ch Karnchang Plc (CK).

Mr Chartchai said Exat will carry out the study, which was ordered by the ministry’s committee overseeing the Si Rat-Outer Ring Road expressway project.

He said if the study’s findings indicate the merger will affect the concession contracts with Exat or is deemed in violation of the contracts, Exat will take action to protect state interests.

A lawsuit may be lodged against BECL, he said, but did not elaborate.

“We need details on whether the merger will affect the existing concessions or projects,” he said.

“Even though we can’t stop a merger by private companies, the move shouldn’t affect the state, or we will have to initiate a lawsuit.”

Mr Charnchai said the study’s findings will also be discussed by the Exat board before they are submitted to the committee overseeing the expressway project, along with recommendations for consideration.

The Exat board is expected to discuss the issue in the middle of this month, he said.

He also said the BECL-BMCL merger was an unprecedented issue for Exat.

The case will be taken into consideration during future transport and infrastructure projects to make sure the state is not put at a disadvantage, he added.

The merger is likely to be completed and listed on the Stock Exchange of Thailand in August.

The new entity will be named Bangkok Expressway and Metro Plc (BEM).