Airbus investment in EEC hinges on thorny PPP issue
Airbus’ commitment to invest in the Eastern Economic Corridor could materialise next month if a thorny issue were to be resolved, according to a source at the Eastern Economic Corridor Office (EECO).
The European aircraft manufacturer and Thai authorities have still not agreed on the framework of investment in a maintenance, repair and overhaul of aircraft (MRO) at U-tapao International Airport in Rayong province, according to the source at the EECO.
The Thai side insists that the joint venture between Airbus and Thai Airways be a public-private partnership (PPP) as a public infrastructure project whose assets would be handed over to the government after 50 years of operation.
Airbus, however, is opposed to a PPP joint venture, and instead wants it to be a joint investment project between two private companies without a lifespan for the project.
The source said that the selection committee responsible for selecting a partner for the investment project may need to forward Airbus' proposal to the Cabinet for consideration, or make changes to the previous investment framework.
The source said that Airbus remains interested in the MRO investment projects as it sees its potential.
According to the Thai Airways investment plan, Thai Airways will invest Bt2 billion between 2023 and 2043 of the total estimated investment of Bt6.3 billion in the project. The rest will be invested by business partners. The land area designated for this investment is 210 rai.
Its capacity is about 80 to 100 planes. If investment goes as planned, it will start operating in 2023 with revenue projection of Bt400 million to Bt500 million in the first year.
It will repair about 10 airplanes in the first year of operation. Revenue is expected to grow about 2 per cent per year and total revenue for 50 years is projected at Bt200 billion.
Sumeth Damrongchaitham, president of Thai Airways, was optimistic about the investment plan. He said the selection committee was awaiting a proposal from Airbus, which is expected to submit its plan by next month.
“We learn that Airbus will make a proposal due to the high demand for MOR services, but only small details of the investment contract need to be resolved,” he added.
