High-speed link hangs on contract rejig
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- Asia Era One, the CP Group-led consortium that won the high-speed rail concession, told the State Railway of Thailand (SRT) and the Eastern Economic Corridor Office (EECO) it would be unable to continue the PPP project unless the contract is revised, SRT governor Anan Phonimdaeng said.
- Two options will be submitted to the EEC Policy Committee within roughly two months: approve previously greenlit contract amendments (already vetted by the Office of the Attorney General) for cabinet approval, or terminate the 224.5-billion-baht concession and negotiate exit terms.
- Lenders have lost confidence in the project's commercial viability after Covid-19 and the subsequent downturn cut passenger forecasts, making financial institutions reluctant to fund the concessionaire, according to Anan.
- The SRT expects to finalize its assessment after the contract management and project supervisory committees meet in July, then deliver a recommendation to the EEC board within about two months.
- Any termination would have to follow contractual procedures agreed by both parties, with officials examining provisions including failure to issue a notice to proceed, force majeure, or other circumstances.
- If the project is scrapped, the SRT would fall back on the existing eastern railway line to maintain rail services in the Eastern Economic Corridor.
Why it matters: A 224.5-billion-baht flagship EEC infrastructure project — meant to link Thailand's three main airports — now faces a two-month countdown that could end in cancellation, leaving the SRT to rely on the existing eastern line and leaving CP Group's consortium on the hook for sunk costs and exit negotiations with lenders who have already soured on the deal's post-Covid economics.