Ministry seeks reversal of compensation to Hopewell

Ministry seeks reversal of compensation to Hopewell

Abandoned Hopewell transit project structures near Vibhavadi Rangsit Road in Bangkok. (File photo)
Abandoned Hopewell transit project structures near Vibhavadi Rangsit Road in Bangkok. (File photo)

The Transport Ministry is seeking to reverse the Supreme Administrative Court's ruling ordering it and the State Railway of Thailand (SRT) to pay hefty financial compensation to Hopewell (Thailand) Co.

Planned as the country's first urban train network, the "Hopewell" elevated highway and railway was signed off on Nov 9, 1990 and was officially terminated on Jan 27, 1998.

The loss-ridden SRT has been counting on the government's help to settle the 11.88 billion baht in compensation it has been ordered to pay Hopewell over the cancellation of the transport project two decades ago.

Acting SRT governor Worawut Mala said earlier this year that his agency does not have enough cash to pay the compensation.

The Transport Ministry plans to file a lawsuit with the Civil Court, asking the court to look into evidence that the SRT has uncovered about Hopewell's registration as the contract winner, said Transport Minister Saksayam Chidchob.

The company may actually have been ineligible to have been awarded the contract to build the project right from the start, according to the ministry, Mr Saksayam added.

It is important to further investigate whether the registration of Hopewell (Thailand) Co was carried out correctly, as it was given the green light a long time ago, he added.

The minister added that questions have been raised over the actual amount of the company's shares which were held by foreigners.

Whether the actual proportion of shares held by foreigners exceeded the legal limit, or whether any Thai nominees were used unlawfully at the time to hold shares on behalf of actual shareholders, who were foreigners, has yet to be revealed, according to the minister.

On April 22 this year, the court ordered the ministry and the SRT to compensate the firm within 180 days for the losses incurred after authorities terminated the contract for the Hopewell project.

The compensation, set at 11.88 billion baht, is subject to an annual interest charges of 7.5%, adding up to around 37 billion baht in total.

Deputy Prime Minister Wissanu Krea-ngam will have the final say on the compensation and where the funding will be sourced, said Mr Saksayam.

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