'Billions saved' in high-speed rail deal

'Billions saved' in high-speed rail deal

The State Railway of Thailand (SRT) has said it will now be able to save billions of baht in additional costs in the execution of a high-speed rail project linking Don Mueang, Suvarnabhumi and U-tapao airports.

SRT said this is possible due to the concessionaire, Asia Era One, agreeing to amend the construction contract and shoulder costs.

The SRT expects to save up to 27 billion baht, said SRT governor Nirut Maneephan.

Some 9.2 billion baht of this figure is required to fund the construction of a high-speed railway structure the project is sharing with the Thai-Chinese high-speed train project, he said.

The SRT also expects to save billions of baht in interest that would have needed to have been paid if it had not agreed to begin repaying construction costs of the project to Asia Era One from the 21st month instead of the 25th month as agreed in the initial contract and shorten the repayment period from 10 years to seven years, he said.

The early repayment and shorter repayment period were agreed in trade of the agreement by Asia Era One to shoulder the 9.2-billion-baht construction of the shared rail structure, he said.

Asia Era One, formerly known as Eastern High-Speed Rail Linking Three Airports Co, is the CP-led consortium that won the bid to build a high-speed rail linking three airports.

The agreement between the SRT and Asia Era One is expected to be approved by the government committee directing the Eastern Economic Corridor (EEC) policy and then endorsed by the cabinet by the end of this month, he said.

The high-speed rail system linking the three airports is one of the key infrastructure projects in the flagship EEC.

Also as part of the deal, Asia Era One and the SRT signed a memorandum of understanding in which both sides agreed to work together to find a solution to the overdue payment by Asia Era One of 10.6 billion baht for the so-called joint venture right it was supposed to have done on Oct 24.

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