Rail agency defends contract cancellation
AMORNRAT MAHITTHIROOK
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| Supot: Panel did not have enough details |
The State Railway of Thailand (SRT) will appeal to the justice court against an arbitration ruling over the Hopewell elevated and train contract and demand 200 billion baht in compensation from Hopewell (Thailand).
The appeal will be filed by the end of the month, said an SRT board member.
Supot Saplom, the director-general of the Highways Department and an SRT executive board member, said the Office of the Attorney-General (OAG) will be authorised to file an appeal on the SRT's behalf.
Early this month an arbitration committee ruled that the SRT and the Transport Ministry should pay 11.8 billion baht, plus 7.5% interest per year, and return a letter of guarantee worth 500 million baht to the Hong Kong-based Hopewell (Thailand) in compensation for terminating a concession contract to build a 60km elevated system for ordinary and electric trains, a tollway and frontage roads.
Mr Supot said the rail agency will also demand the company pay 200 billion baht as remuneration for a loss of opportunity when it takes the arbitration committee ruling to court.
He said the SRT will argue that the arbitration panel did not have all the relevant information about the concession when it made its ruling.
"The arbitration committee has considered the procedures for terminating the contract and compensation. But there is more to take into consideration," he said.
Mr Supot said the termination of the concession contract was appropriate as construction was delayed. The company suspended construction on the project for one year before the Chuan Leekpai government scrapped the contract.
The Hopewell project was approved during the Chatichai Choonhavan administration when Montri Pongpanich was transport minister. The contract was signed on Nov 9, 1990.
The 30-year concession took effect on Dec 6, 1991, and the company was supposed to complete the system by Dec 5, 1999.
The 1997 financial crisis cut short the construction work and the Chuan administration decided to scrap the concession in January 1998 after a series of delays.
Only the pillars from Bang Sue to Rangsit had been erected by then.
Mr Supot also dismissed as untrue a claim by Hopewell that the construction was delayed because the SRT could not hand over the land to be used.
He said the construction of local roads near the Hopewell elevated route was completed without any problems.
"The contract cancellation was in accordance with required legal procedures," he said.
Mr Supot added that he heard the company had lodged a complaint with a court overseas.
The SRT has not heard anything from the court, however.
Mr Supot said the SRT can proceed without having to wait for instructions from the Transport Ministry.
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