The high-speed rail project linking Don Mueang, Suvarnabhumi and U-Tapao airports is expected to be up and running later this year after the state and project builders agreed on a revised project.
Anan Phonimdang, deputy governor of the State Railway of Thailand (SRT), said the agreement has since been acknowledged by the SRT’s board.
The matter will be forwarded to the Eastern Economic Corridor (EEC) Policy Committee and the cabinet for review to ensure the state is not at a disadvantage, he said, adding the Notice to Proceed (NTP) is expected to be issued late this year.
Asia Era One, a CP Group-led consortium, won the bidding to build the rail system worth 224.5 billion baht in 2018, but the project, which is among the major infrastructure development projects in the EEC, hit a snag due to several factors, including the fallout from the pandemic.
The SRT and the Office of the EEC have negotiated with the firm over changing parts of the contract to ensure the project is completed.
“The solution is clear and based on principles. The company is required to submit an additional bank guarantee as an assurance it will be completed,” said Mr Anan.
According to the SRT deputy governor, the contract revision involves four issues: payment of the so-called joint venture right, the government’s investment in the project, an additional bank guarantee, and investment promotion privileges.
Under the proposed revision, Asia Era One Company will pay the joint venture right in full plus interest, totalling 11.7 billion baht. The payment will be made in seven instalments.
The state will start investing in the rail project 18 months after the NTP is issued instead of right after the trains begin operating. The company will be required to submit an additional bank guarantee of 111.9 billion baht for this within 270 days of the contract revision.
Under the original contract, in which the rail system is to be developed under a public-private partnership scheme, the government has committed to investing about 111.9 billion baht. It will pay 3.57 billion baht for land appropriation and will start paying the remaining 108.33 baht in the sixth year or after trains start running.
However, Asia Era One has asked the government to pay the company for ongoing construction work.
For the NTP to be issued, the company must receive an investment promotion certificate from the Board of Investment first. However, the review process ended on May 22, so the state has agreed to remove this requirement, Mr Anan said.
According to Mr Anan, if the NTP is issued as planned, the construction is expected to be completed in 2029.