State Railway Thailand loses its final battle over Baht25bn Hopewell project compensation payout

Construction News
The unfinished structure of the Hopewell Project is left along the northern and northeastern rail lines. (Bangkok Post file photo)

State Railway Thailand loses its final battle over Baht25bn Hopewell project compensation payout

The Central Administrative Court on Tuesday rejected a State Railway of Thailand (SRT) bid to nullify a huge compensation order in the “Hopewell Project”.

A contractor, Hopewell (Thailand), had been awarded a lucrative contract in connection with an 80 billion baht elevated highway and train project.

Construction began in 1997 but was terminated in 1998, by the Chuan Leekpai government in the wake of the Asian financial crisis. At that stage only 10% of the work had been completed and partially built stanchions can still be seen around the capital.

The SRT had hoped that nullifying Hopewell’s 1990 registration would enable it to contest a Supreme Administrative Court order for the Transport Ministry and the SRT to pay the company 25 billion baht in compensation for wrongfully terminating the contract.

The Central Administrative Court, however, ruled that the SRT was not the damaged party, so it could not hear the case.

The Supreme Administrative Court’s ruling was also final, said Tuesday’s ruling.

Hopewell had complained to the Administrative Court that the Transport Ministry and SRT were intentionally defying the Supreme Administrative Court’s order for them to pay out the compensation.

For its part the SRT claimed the company’s registration was invalid, having been registered unlawfully with the Department of Business Development on Nov 5, 1990, as it was then a foreign legal entity and did not have a permit to operate in the kingdom.

The dispute went to the Arbitration Tribunal, which ruled in Hopewell’s favour. The SRT appealed to the Administrative Court and it duly overruled the ruling but the SRT lost its final battle in the Supreme Administrative Court, which upheld the Arbitration Tribunal’s decision made over a decade ago.