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Hopewell Owed Nearly Bt13 Billion in Interest by Thailand’s State Railway Doubling Settlement Amount

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BANGKOK – Thailand’s State owned Railway will ask the Junta government to pay the court-ordered 25-billion-baht compensation, including 13-billion-baht interest, to Hopewell (Thailand) Co for its cancellation of the company’s huge transit project contract.

SRT deputy governor Ek Sittivaekin disclosed the figures on Friday. He said the interest rate was 7.5% per year as the Supreme Administrative Court ordered, starting  from the contract termination in 1998, in its ruling.

The principal was 11.88 billion baht, comprising 9 billion baht for construction costs incurred by Hopewell, a 2.85-billion-baht land use fee Hopewell had paid to the SRT, and a 38-million-baht fee for the issuance of a project guarantee.

Mr Ek said the government, the Transport Ministry and the SRT were responsible for the matter and they had yet to finalise their respective shares of the payment.

“However, the government must help (the SRT) pay this debt in accordance with Section 43 of the State Railway of Thailand Act, which states that if the SRT could not pay all its costs the government would pay the remainder,” he said.

The compensation must be paid within 180 days of the court order. The matter would reach the cabinet next Tuesday, he said.

On Monday the Supreme Administrative Court ordered the state and Hopewell (Thailand) Co to comply with the ruling of the arbitration committee set up to resolve the dispute. The committee ordered the compensation in 2008.

The contract to build the project was signed with the Hong Kong-based Hopewell construction group on Nov 9, 1990, when the late Montri Pongpanich was transport minister in the Chatichai Choonhavan government. The multi-tiered transport system was designed to be built above the existing main railway tracks of greater Bangkok, with layers for a toll road, long-haul and commuter trains, frontage roads and commercial property development on the ground.

Seven years later, the cabinet of then prime minister Gen Chavalit Yongchaiyudh announced it would scrap the contract after the company halted construction in 1997 as the financial crash took hold.

The contract was officially terminated on Jan 27, 1998 by the Chuan Leekpai government, at which time Suthep Thaugsuban was transport minister. The cost had been estimated at 80 billion baht in 1990 when the 30-year concession was granted.

By Thodsapol Hongtong
The Bangkok Post

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