Suriya justifies revisions to high-speed rail project contract

Transport Minister Suriya Jungrungreangkit has defended the government’s revisions to the contract for the high-speed rail project connecting three airports, saying these changes are essential for the project’s advancement and to ensure fairness for both the government and the concessionaire.
Revisions are necessary due to both parties failing to honour the original agreement, Mr Suriya, also a deputy prime minister, said on Tuesday.
The government did not provide the concessionaire with the land for construction in a timely manner, and the concessionaire was unable to commence construction as planned during the Covid-19 pandemic, he said.
Although the revisions have been approved by the Eastern Economic Corridor (EEC) Policy Committee, they were not presented to the cabinet for endorsement on Tuesday as initially anticipated, according to the minister.
The original contract was signed in 2019 between the State Railway of Thailand (SRT) and Asia Era One, a subsidiary of Thai conglomerate Charoen Pokphand (CP) Group. A concession agreement to operate the Airport Rail Link was part of the joint investment plan.
The high-speed rail system, a flagship project of the EEC, aims to link Don Mueang, Suvarnabhumi and U-Tapao airports.
Mr Suriya was responding to accusations made by the main opposition People’s Party during last week’s interpellation, which claimed that these contract revisions favour the concessionaire, potentially compromising the government’s position.
The revised contract is awaiting cabinet submission and has already been reviewed by the prosecution to ensure fairness for both parties, he said.
Finance Minister Pichai Chunhavajira, who chairs the EEC committee, responded to the accusations at a House meeting last week.
He acknowledged that the government’s land expropriation took two years longer than anticipated since the 2019 contract signing. This delay, coupled with the economic impact of Covid-19 and geopolitical conflicts affecting inflation and interest rates, hindered the concessionaire’s ability to secure financing for the project’s implementation.
Regarding the decision to pay the concessionaire the agreed 149-billion-baht investment in instalments rather than in a lump sum after construction, Mr Pichai explained that this approach would reduce the total investment to about 120 billion baht, considering current interest rates.
The full 149 billion baht could rise considerably if paid later, he said.
Each instalment will be paid only after the contracted contractor completes its work, and a bank guarantee equal to the promised investment will be required to ensure the contractor fulfils future obligations, he added.