The high-speed rail project connecting Don Mueang, Suvarnabhumi, and U-Tapao airports is slated to begin operations later this year following a revised agreement between the government and the project developers.
Anan Phonimdang, deputy governor of the State Railway of Thailand (SRT), confirmed that the SRT board has approved the revised agreement.
The proposal will now be reviewed by the Eastern Economic Corridor (EEC) Policy Committee and the cabinet to ensure fair terms for the state. The Notice to Proceed (NTP) is expected to be issued by the end of the year.
In 2018, Asia Era One, a consortium led by CP Group, was awarded the contract to construct the rail system for 224.5 billion baht. Despite being a key infrastructure project in the EEC, it faced delays due to various challenges, including the impact of the pandemic.
The SRT and the Office of the EEC have renegotiated parts of the contract with the consortium to guarantee the project’s completion.
“The resolution is straightforward and based on principles. The consortium must provide an additional bank guarantee to ensure completion,” Mr. Anan explained.
He added that the contract adjustments address four main areas: payment for joint venture rights, government funding for the project, an additional bank guarantee, and investment promotion benefits.
Under the revised terms, Asia Era One will fully settle the joint venture rights fee plus interest, amounting to 11.7 billion baht, in seven installments.
The government will begin funding the project 18 months after the NTP is issued, instead of at the start of train operations. Additionally, the consortium is required to provide another bank guarantee of 111.9 billion baht within 270 days following the contract adjustment.
Originally, the project was structured as a public-private partnership, with the government committing to invest approximately 111.9 billion baht. This includes 3.57 billion baht for land acquisition and the remainder to be disbursed in the sixth year or after the commencement of train operations.
Asia Era One has also requested government payments for ongoing construction efforts.
To secure the NTP, the company initially needed to obtain an investment promotion certificate from the Board of Investment. However, following a review that concluded on May 22, this requirement was waived, according to Mr. Anan.
Mr. Anan noted that if the NTP is issued as scheduled, the project is anticipated to be completed by 2029.
