CP Group seeks to follow up rail success with U-Tapao, aviation city bids
22 March 2019
CHAROEN Pokphand Group (CP Group), along with BBS Joint Venture and Grande Consortium, submitted bids yesterday for the U-Tapao airport and Eastern Aviation City development projects worth Bt290 billion.
The projects come under the eastern economic zone development scheme, which will feature high-speed rail connections serving urban expansion plans that will see the Eastern Aviation City grow to become an aviation metropolis within 10 years.
CP Group and its business allies formed a consortium called Thana Holding Joint Venture and its expected partners include Charoen Pokphand Holding, Italian-Thai Development, Ch Karnchang and B Grimm Joint Venture Holding. As representatives of the joint venture, Noppadol Dej-udom, vice chairman for CP Group’s Sustainability, Good Governance and Corporate Communications Office, and Adiruth Thothaveesansuk, vice chairman for CP Group’s Special Projects Development Office, submitted the bid for the projects. CP Group’s participation in the bidding for the paired projects in the Eastern Economic Corridor (EEC) comes hot on the heels of its success in winning the bid to build a high-speed train system connecting three international airports: Suvarnbhumi and Don Muang in Bangkok and U-Tapao in Rayong. The group is engaged in negotiations with the government on the details of the project.
Another bidder for the U-Tapao and aviation city projects is BBS Joint Venture, which comprises Sino-Thai Engineering and Construction, Bangkok Airways, and BTS Group Holdings.
The third bidder, Grande Consortium, comprises Grande Asset Hotel and Property (Grand); Asia Aviation (AAV), which is majority-owned by Thai AirAsia, an operator of a low-cost airline AirAsia; and Christiani & Nielsen (Thai) (CNT). Grande holds an 80 per cent stake in the consortium, while AAV and CNT each owns 10 per cent.
Earlier, Thai Airways International Plc and PTT Plc, which had shown interest in bidding, dropped out of the race.
“We have an investment plan to buy 38 new aircraft worth Bt160 billion, which is under study by the National Economic and Social Development Council Office,” Thai Airways International Plc’s president Sumeth Damrongchaitham said recently.
“This is a high investment for our business. As a result, we decided to cancel to our plan to join in on the bidding.”
However, the company may join in on an investment covering cargo, aviation catering and ground services at a later stage, he said.
Earlier, 42 domestic and overseas private firms from had expressed interest to buy the letter of intent required to participate in the bidding for this project. Of the foreign companies, six are from China, two firms from France, five from Japan, and one each from Turkey and Malaysia.
Work on the Eastern Aviation City development is planned to start initially on a 6,500-rai site encompassing U-Tapao airport, before being extended to become the Eastern Aviation Metropolis.
The U-Tapao airport development project will be located on a 6,500-rai site owned by the Royal Thai Navy and include a maintenance, repair and overhaul centre, a duty-free zone, a terminal, a second runway and a container depot.
Both projects will be developed under the public-private partnership (PPP) model.