The Treasury Department has moved forward the development of its expensive former Mor Chit bus station land plot by allowing a private firm, Bangkok Terminal Co, to resume investment under a new contract, says the director-general.
Bangkok Terminal won the development concession of this plot in 1996, but the company failed to start the project because the concession was later found to have violated the 1992 Public-Private Partnership Act, which requires government projects valued from 1 billion baht to comply with the law.
However, the contract between the Treasury Department and the company is still valid according to an Administrative Court ruling.
Chakkrit Parapuntakul, head of the department, said Bangkok Terminal remained eligible to operate the concession contract, but after 20 years the contract must be updated.
One new condition is reducing the development space to 700,000 square metres from 900,000 sq m in compliance with amending the floor area ratio under the new city plan, he said.
The 20-year delay also requires a renegotiation of benefits from the concession, Mr Chakkrit said.
"The return from our assets must be adjusted to be in line with current market value," he said.
The project comprises a high-rise building for commercial space, residential units, a mass-transit station and a skytrain depot.
Former conditions required the Land Transport Department to relocate its northern and northeastern public bus station back to this area after moving their station to Kamphaeng Phet Road to allow the concession project.
The Treasury Department has been trying to renegotiate with the Land Transport Department, which holds the usage rights to this plot, as the former wants to cut its space for activities to 80,000 sq m from 100,000 sq m.
This project is on 63 rai, and the Treasury initially awarded the development concession to the private firm Sun Estate, which was renamed Bangkok Terminal in August 1996.
The initial project concept was a mass transport centre and commercial spaces valued at 19.7 billion baht. Under the old contract, the developer paid 550 million baht as a land-use fee to the Treasury Department and annual rent of 5.35 million, rising 15% every five years.