Don Mueang – Suvarnabhumi – U-tapao Airport rail pact ‘needs fine-tuning’
CP-led group settles on 50-year contract
20 March 2019
Contractual negotiations on a high-speed rail project linking three major airports between the State Railway of Thailand (SRT) and a CP-led consortium have become less tense after CP settled for a 50-year contract.
Prior to their latest round of talks, rumours were swirling that the consortium wanted the concession almost doubled to 99 years as part of an additional set of 12 proposals for the 220-kilometre project.
The SRT committee responsible for selecting the project’s concessionaire held talks with the consortium Tuesday to discuss these. The planned line will connect Don Mueang airport in Bangkok with Suvarnabhumi in Samut Prakan and U-tapao in Rayong.
The consortium, which offered the lowest bid of 117.2 billion baht, comprises CP, Bangkok Expressway and Metro Plc, China Railway Construction Corporation Ltd, Ch Karnchang Plc, and Italian-Thai Development Plc.
With the discussions ongoing, SRT acting governor Worawut Mala issued a reassurance: “We haven’t hit a dead end. The talks will carry on.”
He said some of the wording had been adjusted and clarified. One example would be the proposal indicating that this would be a 50-year concession. However, the time frame could be extended if the government feels the consortium is running it effectively and responsibility, he added.
The acting SRT governor said the contract still needed to be fine-tuned in part for greater clarity.
The consortium is reportedly still discussing some of the proposals with other financial partners, including the Japan Bank for International Cooperation (JBIC), according to Mr Worawut.
He said JBIC expressed concern about the talks being disrupted after the March 24 election.
The meeting also touched on whether the consortium’s proposals were too specific at this early stage, such as its desire to relocate train stations and rail line extensions, and switch up its marketing approaches.
They will meet again on March 28. Talks are tipped to conclude before the middle of next month.
BSR Joint Venture offered the second-lowest bid but Mr Worawut said it would not be invited to any negotiations while talks were under way with the consortium.
Pundits have expressed concern that a newly installed Thai government could end up changing the policy and potentially axing the project, he cautioned.