Airport rail deal faces July 15 review after eight-year delay and 21.8bn-baht investment

Thailand’s long-delayed high-speed railway linking Don Mueang, Suvarnabhumi and U-Tapao airports is heading towards a crucial review on July 15, 2026, after more than eight years without construction beginning and combined public and private investment exceeding 21.8 billion baht.

The project has remained stalled since the invitation to tender was issued on May 30, 2018. Its progress has been held back by prolonged negotiations over revisions to the public-private partnership agreement, including requests by the private concessionaire for relief following the impact of the Covid-19 pandemic.

Discussions among the Eastern Economic Corridor Office, the State Railway of Thailand and Asia Era One Co Ltd, the CP Group-led concessionaire, have produced two possible approaches for submission to the Eastern Economic Corridor Policy Committee, chaired by Prime Minister Anutin Charnvirakul.

1. Under the first option, the parties would continue with amendments based on an earlier resolution of the EEC Policy Committee. If the committee endorses this course, the project would proceed under the conditions already negotiated and included in a draft amendment examined by the Office of the Attorney-General.

The proposed changes would then be submitted to the Cabinet for approval in principle before the state and private partners signed the revised joint-investment agreement.

2. The second option would apply if the EEC Policy Committee determines that the contractual problems cannot be resolved through an amendment. The SRT and Asia Era One would then review the relevant legal provisions and begin the process of negotiating an end to the concession.

Asia Era One invokes contractual right

Asia Era One has submitted a formal letter to the SRT seeking to exercise its rights under the public-private partnership agreement after both parties encountered conditions and limitations that had not been fully anticipated when the contract was signed.

SRT governor Anan Phonimdang said the company had cited Clause 6.2 of the agreement, which deals with termination when a Notice to Proceed cannot be issued because the required Board of Investment promotional privileges have not been obtained in full.

The clause permits either party to terminate the agreement if the conditions required for issuing the construction notice cannot be completed because BOI investment promotion has not been fully secured.

The SRT is due to report the matter to the public-private partnership contract management committee on July 15, 2026.

The issue is expected to be forwarded to the project supervisory committee later in July before being submitted to the EEC Policy Committee for consideration in August.

Three grounds for ending the agreement

The concession agreement provides three broad routes through which the project may end.

1. The first is the normal expiry of the 50-year concession period.
2. The second concerns the inability to issue the Notice to Proceed, including termination under Clause 6.2 when the required BOI privileges cannot be secured in full.
3. The third covers other termination circumstances stipulated in the agreement. These include a breach by the SRT, a breach by the private partner, force majeure or another relief event, and the government’s exercise of authority in the public interest.

If the EEC Policy Committee concludes that the previously agreed amendment cannot proceed, the parties would move into negotiations over terminating the agreement and determining compensation for expenditure and losses arising from investments already made.

The SRT is reviewing the figures with its financial division. The final calculation would have to include expenses, income that may need to be deducted, interest and other verified financial items, meaning the precise amount has yet to be established.

Investment exceeds 21.8 billion baht

Preliminary figures show that the public and private sectors have already invested more than 21.8 billion baht in the project.

• The SRT has spent more than 9.8 billion baht, comprising 5.74 billion baht in land-expropriation payments and 4.103 billion baht on relocating public utilities.
• The private partner has invested more than 12 billion baht. Its expenditure includes improvements to Airport Rail Link services and preparations for civil-engineering construction.

These investments would form part of the financial assessment if the project moves towards a negotiated termination.

CP insists it does not want to abandon project

Despite invoking a clause that could lead to termination, Asia Era One has rejected suggestions that the CP Group wants to abandon the railway.

Asia Era One president Sarit Jinnasith said the company had consistently supported the project because it regarded the line as an important part of Thailand’s national infrastructure.

He said the private partner’s main objective was to find a solution with the government rather than end the agreement.

According to Sarit, the fundamental problem was a series of unresolved obstacles that had prevented the project from proceeding, including delays in transferring usable construction sites.

The delayed delivery of land had directly affected both the start of construction and the company’s ability to secure project finance.

Asia Era One said it had held continuous discussions with the SRT and other relevant agencies in an effort to resolve the site-delivery problems.

However, several restrictions could not be addressed under the existing legal framework or because of the actual physical conditions at the project sites.

In some areas, land had formally been handed over to the concessionaire but could not be used for construction because of legal or physical constraints.

One of the main issues concerned a public drainage channel in the Makkasan area, which affected the development and use of project land.

Resolving the matter would require policy-level decisions and coordinated action by several government agencies, rather than action by either contractual party alone.

Sarit stressed that the company was not seeking to blame the SRT or any other agency.

He said all parties wanted the project to proceed, but conditions encountered during implementation differed from the information available when the project was prepared and when its terms of reference were drafted.

The obstacles therefore required a joint solution involving the state, the private partner and the relevant authorities.

Site delays undermine access to finance

The delivery of construction areas is also central to the concessionaire’s efforts to obtain project financing.

Financial institutions consider whether sites are ready and whether construction can proceed according to schedule when assessing whether to lend to a large infrastructure project.

Continued uncertainty over the availability of land has therefore affected lenders’ assessment of the project’s risks and the private partner’s ability to raise funds.

Asia Era One said the delays had an unavoidable impact on project-finance arrangements because construction readiness was a key condition considered by financial institutions.

The economic, financial and investment environment has also changed substantially since the project was tendered, while other underlying conditions have shifted.

These changes have added to the complexity of the proposed contract amendments and require consideration by several government bodies.

U-Tapao passenger forecast revised down

Another major issue concerns the original passenger forecast for U-Tapao airport.

When the railway project was prepared, its financial assumptions were based on expectations of strong passenger growth at U-Tapao.

However, the subsequent expansion of Suvarnabhumi airport’s capacity has altered the aviation outlook and reduced current projections for passenger numbers at U-Tapao.

Asia Era One said the lower forecast had significantly affected the project’s financial model.

The issue has been acknowledged by all parties and has remained under discussion as they consider how to preserve the railway’s public benefits and long-term financial sustainability.

Termination remains a last resort

Asia Era One said the option of ending the agreement should be considered only if the legal restrictions, site-delivery problems and other obstacles prove impossible to resolve and prevent the parties from complying with the contract.

Any decision to invoke the termination process would still require further negotiations among the relevant parties.

Sarit maintained that termination was not the private partner’s preferred result and that its priority remained finding a mutually acceptable way to continue the project.

He said the company had consistently sought a joint solution rather than a route to ending the railway, adding that it could still move forward for the country’s benefit if the outstanding constraints were resolved.

The July 15 review will begin the next stage of the decision-making process, but the project’s future is unlikely to be settled immediately.

The matter must first pass through the contract management and project supervisory committees before the EEC Policy Committee determines in August whether to proceed with the proposed amendment or move towards negotiations to terminate the eight-year-old agreement.

Source: Bangkokbiznews, Bangkokbiznews