Thai billionaire family’s CP Group-led consortium requests termination of 3-airport high-speed rail contract

It cited the inability to issue a notice to proceed with construction, as well as the inability to secure an investment promotion certificate from the Board of Investment as reasons, as reported by The Nation.

Asia Era One, however, stressed that the letter was sent to the State Railway of Thailand (SRT) to safeguard the rights of the contracting parties and clarify facts related to the project’s implementation, and should not be seen as an immediate exit from the project or a cancellation of the contract.

It should also not be interpreted as the BOI refusing to support or approve the project, the consortium noted, adding that consideration of the project remains subject to contractual and legal processes.

Sarit Jinnasith, Asia Era One’s president, said the firm had been working with relevant agencies to find an appropriate path forward in line with the contract, the law and the national interest.

He reaffirmed the company’s commitment to the project, saying cooperation among all parties would produce an appropriate outcome benefiting the country, the public and all stakeholders.

The consortium, in which CP is the largest shareholder, won the concession in 2019 to build the 220-kilometer rail line connecting Don Mueang, Suvarnabhumi and U-Tapao airports, which was projected to cost 224.5 billion baht (US$6.73 billion).

But the project was delayed after material costs climbed and the COVID-19 pandemic reshaped travel demand. CP has sought revisions to the contract, including changes to the government’s payment structure from the usual post-completion lump sum to a pay-as-you-build model, according to the Bangkok Post.

The cabinet approved the principle of the proposed relief measures, including amendments to the contract, in October 2021. Talks between SRT, Asia Era One and the Eastern Economic Corridor Office (EECO) have continued for years under successive governments without reaching a resolution, leading to the current process.

The EECO has reportedly scheduled a meeting of the joint investment contract management committee for July 15 to review the proposed mutual termination of the contract before referring the matter to the Eastern Economic Corridor Policy Committee, according to Kaohoon International.

Don Mueang serves as a hub for low-cost carriers, Suvarnabhumi handles international flights while U-Tapao provides access to tourist destinations and resorts in the country’s eastern region.

The conglomerate is controlled by the Chearavanont family, who ranked second on Forbes’ latest Thailand rich list with an estimated combined net worth of US$36.6 billion.

It is among the world’s largest producers of animal feed and livestock and also has interests spanning real estate, fintech and telecommunications.