Transport Minister Phiphat Ratchakitprakarn has reaffirmed that the government will not amend the concession agreement for a high-speed rail line linking three airports, saying a legal pathway exists for the developer to walk away if it cannot proceed under the original terms.
Asia Era One, a consortium led by the Charoen Pokphand (CP) Group, was awarded the concession for the 225-billion-baht project linking Don Mueang, Suvarnabhumi and U-tapao airports in 2019. It has yet to break ground.
The key point of contention is the consortium’s proposal to change the state subsidy payment structure. It has sought phased payments based on construction progress, instead of the original terms requiring full completion within five years before the government repays the subsidy over a 10-year period.
Mr Phiphat said the government would “adhere only to the original contract”, stressing the need to safeguard fiscal discipline and state interests.
Exit plan
However, in a bid to prevent further prolonged delays, he said Ministry of Finance regulations allow a private contractor to cancel a state contract without being deemed to have abandoned the project if external factors — such as oil price impacts — make continuation impossible, provided construction has not yet begun.
The CP-led consortium has not yet given a formal response.
Mr Phiphat noted that the government is considering proposals for large-scale developments capable of attracting travel to the eastern provinces, such as a world-class theme park and a major sports complex. He has been the main driver behind a campaign to bring Disneyland to the Eastern Economic Corridor (EEC).
These ideas would allow the private sector to reassess the project’s commercial viability. If CP and its partners conclude that the project is financially unworkable, they would still have the right to withdraw, he said.
The State Railway of Thailand (SRT) and the EEC policy committee plan a meeting with the consortium this month to determine the project’s direction. If the contract is terminated, the SRT would be required to launch a new bidding process as quickly as possible.
Decade of delays
Anan Phonimdaeng, the acting SRT governor, said the cabinet has made it clear that it will not accept any contract changes proposed by the private sector and has ordered adherence to the original agreement.
He warned that if the contract is cancelled and a new bid is required, the project — already six years behind schedule — could be delayed by a further eight to 10 years. A new procurement process would take two to three years, followed by around six years of construction.
Mr Anan added that reopening talks with the second winning bidder is virtually impossible, as bid guarantees and price validity periods expired long ago, meaning the entire process would have to restart from square one.
The original contract with Asia Era One in 2019 included a concession agreement to operate the Airport Rail Link.
During the Covid-19 pandemic, declining passenger numbers on the Airport Rail Link prompted Asia Era One to request compensation. The cabinet of Prime Minister Prayut Chan-o-cha approved a revision of the contract in 2021.
But even after the pandemic, little progress was made, due in large part to delays in expropriating and transferring land needed to build the rail line.
