THAILAND – Thailand’s flagship 224.5-billion-baht high-speed rail project linking Don Mueang, Suvarnabhumi and U-Tapao airports edged towards collapse after years of delay, as the private operator failed to meet key conditions, construction remained halted and a change of government tore up a rescue deal.
Standstill since 2019
The project, conceived as the backbone of the Eastern Economic Corridor (EEC), was due to begin construction in October 2019 but made almost no progress. The private operator awarded the contract, Asia Era One, did not fulfil essential preconditions for the start of works, and the State Railway of Thailand (SRT) has been waiting for movement for years. Construction has been at a standstill for almost three years, with the pandemic exacerbating delays and drying up crucial financing.
Financial model unravels
Delays and changing economic conditions shifted the project’s calculus. Lower passenger forecasts, falling returns and rising interest rates made the scheme harder to justify to investors, who began to lose interest in the EEC. The private consortium failed even to pay the required concession fee for the Airport Rail Link, further blocking progress and prompting the construction freeze.
Last-minute contract rescue
There was a brief attempt to salvage the scheme when the EEC policy commission approved five amendments to the contract. Under the proposed changes the government would make its contributions in instalments, the private side would provide additional guarantees, and the outstanding fee would be repaid in seven parts. Officials said the alterations were intended to bridge the financing gap and allow a restart of work.
Political reversal halts restart
The plan unravelled after a change of government under Prime Minister Anutin Charnvirakul. The new administration criticised the amendments as disadvantageous to the SRT, and the attorney general flagged 18 legal concerns. The transport minister publicly opposed the instalment arrangement, the amended agreement was set aside, and the SRT governor resigned. The outcome left the project paralysed once more.
Domino effect across the EEC
Stakeholders warned that the consequences went beyond the rail link. Major related initiatives, including the proposed U-Tapao airport expansion and plans for an Eastern Aviation City, depended on a reliable fast connection between the three airports. With the rail project stalled, investor confidence and planning for the wider EEC were undermined.
Legal risks and an uncertain future
Observers said the next phase could be bitter and protracted. If the contract were formally terminated, both sides faced lengthy legal battles and potentially heavy compensation claims. Who would shoulder the costs remained unclear and the future of the prestige project looked more uncertain than ever, with significant implications for Thailand’s eastern development ambitions.
Source: Khaosod English