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Thailand: Second bidder will be considered if no deal on high-speed rail

NEGOTIATIONS in relation to the Bt224.5-billion high-speed railway project have yet to be concluded, while the secretary-general of the Eastern Economic Corridor (ECC) Committee has indicated that if a deal was not reached, BSR Joint Venture’s proposal will be considered. 

Worawut Mala, acting governor of the State Railway of Thailand (SRT), said talks with Charoen Pokphand Group (CP Group) and its allies on the high-speed rail project have reached the second phase, adding that negotiations should be finalised within this month and forwarded to the Cabinet. The contract should be signed by March.

The high-speed rail project will connect Bangkok’s two airports – Don Mueang and Suvarnabhumi – with U-tapao in the eastern province of Rayong.

A representative of the Department of Public Prosecutor Commission, who is chairing the negotiations, said the discussions are making fast progress and he was confident a deal would be reached his month. 

He added that if a deal could not be reached, then both the selection committee and the CP Group have agreed to end the talks. 

The committee will summarise the results and forward it to the EEC Committee. After that the process will begin with the second bidder – BSR Joint Venture. 

“The selection committee [of the high-speed rail project] has to discuss all issues, and now the negotiation has reached the second phase. If both parties decide to end the talks, then BSR Joint Venture will be called in. But if the negotiation continues and the selection committee accepts the issues, then the deal will go to the EEC Committee for consideration. If the EEC Committee accepts the deal, then it will be forwarded to the Cabinet. 

Or the EEC Committee may add a note in the contract for the Cabinet’s consideration,” Worawut said. 

Talks began at 1.30pm yesterday with representatives from the Department of Public Prosecutor Commission, the EEC Committee and the CP Group.

Kanit Sangsubhan, secretary-general of the EEC Committee, said proposals or conditions outside the project’s terms of reference (TOR) will not be negotiated, as all bidders have read the same TOR conditions. For example, a proposal to extend the concession by 49 year to 99 years cannot be done, as it is not included in the TOR.

Another proposal for the government to provide a subsidy from the first year of construction and guarantee an internal rate of return of 6.75 per cent per annum also could not be accepted, he said. 

The TOR states that the government subsidy will be made available in the sixth year of construction or when the construction is completed. 

Source: http://www.nationmultimedia.com/detail/Real_Estate/30364011