State Railway suing CP consortium for B13.3 billion

Sum represents amount agreed under contract to build long-stalled three-airport rail line

The State Railway of Thailand (SRT) has filed a suit with the Central Administrative Court demanding that Asia Era One Co, a consortium led by the Charoen Pokphand Group, pay 13.3 billion baht owed under the contract to build the long-stalled three-airport high-speed rail project.

The state enterprise filed the lawsuit on Wednesday to exercise its rights under the contract for the project designed to link Don Mueang and Suvarnabhumi airports with U-tapao airport in Rayong, the SRT public relations department said.

The rail line was touted as a key component of the Eastern Economic Corridor development project.

The SRT signed the 224-billion-baht contract with Asia Era One on Oct 24, 2019. It stipulated that the company pay 10.67 billion baht for its right to co-invest in the project within two years after the contract took effect, or by Oct 24, 2021. The SRT’s demand includes 2.66 billion baht in interest calculated from that date.

The consortium’s major shareholders are CP Group through Charoen Pokphand Holding (87.15%), Bangkok Expressway and Metro Plc (5.14%), China Railway Construction Corporation (5.14%) and Italian-Thai Development (2.57%). The concession covers the construction and operation of both the high-speed railway and the existing Airport Rail Link in Bangkok.

The SRT also demanded that Bangkok Bank and Siam Commercial Bank pay 1 billion baht each as they guaranteed project implementation.

The project has been stalled for years by a combination of the Covid-19 pandemic, land, financing and contractual disputes. 

Asia Era One has been seeking to terminate the contract and exit the project, saying its lenders no longer have confidence that the project is viable. The SRT says the consortium still has obligations to meet, hence the lawsuit.

When the contract was signed, the government expected the 220km high-speed rail line to be operational by 2023 and to generate significant economic development along the route.

The most recent projections put the start date at 2031-32, if the project ever breaks ground.