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Thailand to negotiate compensation pay with Hopewell Co. for aborted rail project

Source: Xinhua| 2019-05-01 20:24:03|Editor: Xiaoxia
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BANGKOK, May 1 (Xinhua) -- The Thai government plans to negotiate a mega-billion-baht compensation pay with Hong Kong construction firm Hopewell for an elevated rail project, which was scrapped over two decades ago, said Transport Minister Arkhom Termpittayapaisith late on Tuesday.

The cabinet on Tuesday acknowledged the Supreme Administrative Court's ruling delivered last Friday for the Ministry of Transport and the State Railway of Thailand (SRT) to follow the ruling of an ad hoc committee of arbitrators issued in November 2008 on the 60-km-long rail project.

In Tuesday's press conference, Arkhom confirmed that the SRT has been notified of the Supreme Administrative Court's ruling for the rail agency to follow the arbitrators committee's ruling to the extent that it provide 11.88 billion baht (about 371.5 million U.S. dollars) in compensation pay, plus a 7.5 percent interest per annum, to Hopewell Co. for the termination of the unfinished project.

He said the Ministry of Transport and the SRT, which is subject to the ministry, are yet to negotiate the compensation pay with Hopewell Co. in accordance with the Supreme Administrative Court's ruling and to find an appropriate financial source to fund it.

A working group, consisting of officials of the SRT, the Office of Attorney General, the Budget Bureau and the Ministry of Finance, will be set up to prepare measures for the compensation pay.

Nevertheless, an ad hoc committee will also be set up by the Ministry of Transport and the SRT to investigate and take legal action against those who may have been allegedly involved in the termination of the project.

The project, Bangkok Elevated Road and Train System, was approved by Thai cabinet in 1989, which would see the construction of some 60 km elevated tollways and railways across the Thai capital with a investment of some 80 billion baht then.

The Ministry of Transport, SRT and the only company tendered for the project, Hopewell (Thailand) Co. with its headquarter in Hong Kong, signed a contract in 1990 with a 30-year concession.

Hopewell would invest in the project to complete the construction in eight years, operate the project and pay Thai government shares of its benefit according to the contract.

However, The contract was officially terminated in 1998 by the Chuan Leekpai-led Democrat government, when Suthep Thaugsuban was transport minister, saying the construction was largely behind set targets.

After that, both sides took legal actions against each other, asking the opposite to compensate the great loss.

On April 22, 2019, the Supreme Administrative Court, revised verdict of a lower court and ruled that Thai government cancelled the contract unfairly and should compensate Hopewell (Thailand) Co. in 180 days.

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