Thailand’s EEC rail contract revisions to be finished next month
07 August 2024
Government closer to agreement with CP-led consortium building high-speed line to link three airports
Talks to revise the contract for the Eastern Economic Corridor (EEC) high-speed rail system are expected to conclude next month before proceeding to the next step, authorities say.
The high-speed rail system, a flagship project of the EEC, would link Don Mueang, Suvarnabhumi and U-tapao airports.
The original contract was signed in 2019 by the State Railway of Thailand (SRT) and Asia Era One, a consortium led by the Charoen Pokphand Group. A concession agreement to operate the Airport Rail Link (ARL) was part of the joint investment plan.
During the Covid-19 pandemic, however, declining passenger numbers on the ARL prompted Asia Era One to request compensation. The cabinet approved the revision of the contract in 2021.
EEC secretary-general Chula Sukmanop said this week that some adjustments will be made to the contract, particularly regarding the financial collateral the consortium must provide, and a request for the government to expedite payment for construction work.
The agreement will be sent to the EEC Policy Committee by mid-September, he said.
After approval, the details will be reviewed by the Office of the Attorney-General before being submitted to the cabinet.
The EEC expects to sign the contract with the consortium before the year ends.
An SRT source said the consortium had agreed to pay the 10.6-billion-baht concession fee in seven instalments starting this year.
Due to financial constraints caused by the pandemic, the global economy and high interest rates, a condition has been made that the government expedite a payment of 119 billion baht payment before the 18th instalment following the issuance of a Notice to Proceed, instead of after construction is complete.
The consortium has agreed to provide bank guarantees of about 100 billion baht to mitigate risks and ensure construction continues. The money will be gradually returned upon completion of the project.
In addition, the new contract removes the requirement for investment promotion certificates. This allows the SRT to issue the Notice to Proceed and enables the consortium to access the construction sites.
The financial guarantee by the private partner is to be provided within 270 days of signing the amended contract.
Efforts are also being made to resolve land issues in the U-Tapao Airport and Eastern Aviation City project. Construction will take five years to complete, with an expected opening in 2029, five years behind schedule.
Source: https://www.bangkokpost.com/thailand/general/2843248/eec-rail-contract-revisions-to-be-finished-next-month
