The saga surrounding the high-speed railway linking three airports has hit a snag, undone by land expropriation, eviction problems and the entire board of the State Railway of Thailand (SRT) resigning.
The Charoen Pokphand (CP) Group-led consortium won the project with a 224-billion-baht bid last December. The government had threatened to blacklist the group if it failed to meet the Oct 15 deadline.
The delays are in part because of concerns by the bid winners over land expropriation and eviction problems.
The consortium's latest move was a request for the government to share the risk in the project. The ministry and the SRT denied there was a land issue and rejected risk-sharing.
Delays in the project signing pose a risk for future implementation and raise questions of behind-the-scenes wheeling and dealing, as well as the project's economic value.
A model of the Chinese-made CRH380A train, designed to operate at a cruising speed of 350kph and a top speed of 380kph. Patipat Janthong
DUBIOUS TRANSPARENCY
Infrastructure megaprojects are a crux of economic development, but transparency and procurement come into question when different groups want to take their piece of the pie.
Thirachai Phuvanatnaranubala, a former deputy governor of the central bank and former finance minister, accused the government of "deceiving people" by using the high-speed rail project to divert national budget into the pockets of certain business groups.
The government, he said, should have invested in a double-track system connecting the three airports, which would cost 50 billion baht, or three times less than the high-speed project.
Regarding land expropriation and eviction, if the SRT fails to hand over this part of land, approximately 2,000 rai, in time to the CP Group-led consortium contracted to build the project, it may face another episode of having to pay hefty financial compensation to a contractor, Mr Thirachai said.
He was referring to the Supreme Administrative Court's order on April 22 for the SRT to pay Hopewell Thailand 12 billion baht plus interest, or 37 billion baht in total, within 180 days to compensate for losses incurred by Hopewell after Thai officials terminated a contentious transport project two decades ago.
A CP Group-led consortium won the high-speed rail project with a 224-billion-baht bid last December. Pornprom Satrabhaya
NO WORRIES
Kanit Sangsubhan, secretary-general of the Eastern Economic Corridor (EEC) Office, said the CP-led consortium will not delay a public-private partnership agreement on the high-speed railway linking three airports from the extended deadline of Oct 25.
"The current situation will not impact this massive investment," he said. "This megaproject can proceed. There are no worries about any further delays."
Mr Kanit noted that the consortium already accepted the project's conditions and the date of the contract signing.
"The office has talked with the consortium to seek a solution to speed up the contract signing," he said. "The consortium vowed that it would not withdraw from the project."
The high-speed railway is to link Don Mueang, Suvarnabhumi and U-tapao airports in Bangkok, Samut Prakan and Rayong, respectively. The megaproject is expected to be the second one in the EEC to see a contract signing soon after the first, namely the third phase of Map Ta Phut seaport (55.4 billion baht).
The railway is projected to have a speed of 250 kilometres per hour. With a length of 220km, the megaproject is scheduled to open commercially in 2024.
The consortium comprises CP, Bangkok Expressway and Metro Plc, China Railway Construction Corporation, Ch.Karnchang Plc and Italian-Thai Development Plc.
Mr Kanit said the high-speed railway will improve the number of tourists in the country by an average of 8% a year, especially in Pattaya, Chon Buri.
"It will handle 15 million passengers in the next five years, 30 million passengers in the next 15 years and 60 million passengers in the next 20 years," Mr Kanit said. "Roughly 3 million people a year will use this railway system once it starts operation."
He said the megaproject is not only for handling tourists but will also support investors in the EEC, as it will provide convenient transport to reduce travel times and fuel costs and eliminate traffic jams.
The high-speed railway is one of five infrastructure megaprojects to serve the EEC.
"The office forecasts the railway to make an economic return of 700 billion baht," Mr Kanit said.
The high-speed railway linking the three airports is one of the infrastructure megaprojects of the Eastern Economic Corridor. Patipat Janthong
FRAGILE CONFIDENCE
Deputy Prime Minister Anutin Charnvirakul said that any delays in the signing of the 224-billion-baht contract between the SRT and the consortium on the rail link would hurt investor confidence in the EEC.
"The high-speed railway linking Bangkok's Don Mueang and Suvarnabhumi with U-tapao airport in Rayong plays a very important role in the EEC project and U-tapao airport expansion," he said. "Any delays will definitely affect overall confidence of investors."
The Transport Ministry decided last Tuesday to postpone the contract signing from Oct 15 to Oct 25.
But Mr Anutin said the project could see further delays since the government and the winning bidders still have time for renegotiations until Nov 7, the final day when the winning bid is valid.
Transport Minister Saksayam Chidchob said the government has done its best to support the deal, especially in terms of the requests of the winning bidder on land delivery.
The government established a subcommittee to monitor the process of land delivery, and at the latest meeting of the EEC committee on Sept 30, the SRT reported that it had delivered 72% of land and pledged to deliver the remaining 28% in 2-3 years.
The government also vowed to charge no fines in the event that the project's operation is delayed because of late land delivery.
"Prime Minister Prayut Chan-o-cha has ordered that the project must continue because it creates great benefits to Thailand and strengthens the country's competitiveness," Mr Saksayam said.
The current Airport Rail Link connects inner Bangkok with Suvarnabhumi airport in Samut Prakan. Amornthep Chotchalermpong
ECONOMIC GAINS
Kriangkrai Tiannukul, vice-chairman of the Federation of Thailand Industries, said the railway will create economic value for sectors like tourism and for urbanisation schemes such as the new city development plan in the eastern region.
"This project will enable the country's tourism industry, especially in Pattaya, Chon Buri, to expand further in the long run," Mr Kriangkrai said. "It will be an economic engine to beef up the country's GDP, while other sectors will benefit from the project such as retail and real estate."
He said the project will improve development in the outskirts for both residential and commercial projects along the main stations of the railway.
Tanit Sorat, vice-chairman of the Employers' Confederation of Thai Trade and Industry, said the current extended deadline is unlikely to affect the project because the government will carry out the project smoothly.
"Both parties will seek a mutual agreement and solution to push forward the railway project," he said.
Besides an improved logistics system, the tourism industry and the property market will reap benefits from the upcoming project, Mr Tanit said.
"The new urbanised areas will expand along the railway and create 19,000 new jobs from the business expansion in eastern provinces," he said.
According to Mr Tanit, business operators prefer railway transport to air and sea shipments. The railway will also make it easier for tourists to travel from Bangkok to the East.
"They have many choices for their travels, and public transport is still very preferable," Mr Tanit said.
Chon Buri is expected to become Thailand's landmark port city, linking land and sea areas and developing the tourism and business sectors in the manner of New York in the US, Antwerp in Belgium and Nagoya in Japan, he said.
"In the future, the megaprojects in the EEC will increase the country's GDP per capita and economic value," Mr Tanit said.
