October 9, 2019 / 12:31 PM / 10 days ago

Thai airport rail contract deadline extended in row over risk

BANGKOK, Oct 9 (Reuters) - Thailand will give Charoen Pokphand Group and its partners 10 more days to sign a contract for a 225 billion baht ($7.43 billion) high-speed railway linking three airports, an official said, amid a row over land transfers and the burden of risk.

The railway will connect Thailand’s main Suvarnabhumi airport in Bangkok to Don Muang and U-Tapao airports in the east, one of five major public-private partnerships aimed at boosting infrastructure on the eastern seaboard.

“The signing date was moved (from Oct. 15) to Oct. 25 because there are concerns over land transfers,” the acting governor of the State Rail of Thailand, Worawut Mala, told Reuters.

“The transfer of land is an issue I’m concerned about because it could impact the reputation of the SRT. We have to do it properly.”

The delay has exposed a rift between new Deputy Prime Minister Anutin Charnvirakul and CP Group, Thailand’s largest private company and one of its most powerful conglomerates.

CP Group and its partners won the bid for the project in May this year - bidding some 60 billion baht (nearly $2 billion) less than the next-lowest competitor - and have been in negotiations with the government since.

Last week, Anutin set an Oct. 15 deadline for signing the contract and said CP and its partners would be blacklisted from government projects if it was not met.

Comments by CP’s senior chairman, Dhanin Chearavanont, over the weekend indicated further disputes about how much risk the conglomerate should take on.

“It is a public private partnership - so a private company should not take risk while the government does not,” Dhanin said, adding the government had to take its share of responsibility.

“If there is risk, both have to risk and fail together,” he said at a book-signing event.

He did not elaborate on details of the contract dispute.

On Wednesday, Anutin also expressed frustration at the contract negotiations.

“Who is trying to take advantage of the government? Who is trying to avoid following the auction results?” he wrote on Facebook.

“Who exactly is trying to ask the government to be lenient for personal gains?” he added.

Anutin told reporters the new deadline should be enough to get the contract signed.

“But if by Oct 25 they do not come, there will be procedures for that,” Anutin said.

Telecommunications firm True Corporation Pcl, a CP Group company, bids for spectrum at government auctions. CP’s other partners, including Italian Thai Development Pcl and CH Karnchang Pcl, bids on government construction projects. ($1 = 30.3000 baht) (Additional reporting by Panu Wongcha-um; Editing by Nick Macfie)

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