Thai government plans gigantic 300 billion baht contract adjustments!

Thai government plans gigantic 300 billion baht contract adjustments!

In a surprising turnaround, the Thai government is planning sweeping changes to three major concession contracts worth a total of nearly 300 billion baht. These projects affect transport infrastructure and retail in the country, including the high-speed rail link between three airports, duty-free shops and the completion of the green metro line in Bangkok. The plans were highlighted by Deputy Prime Minister and Transport Minister Phiphat Ratchakitprakarn as crucial to the country's future economic development. However, there are concerns about possible financial disadvantages for the state as a result of these contractual changes, particularly in view of the existing agreements with large operators and the associated revenues.

One of the central issues revolves around the existing duty-free contracts with King Power. Despite difficult negotiations and ongoing threats to terminate the concession, Airports of Thailand (AOT) does not intend to terminate these contracts. AOT has set a deadline of November to receive a response from King Power on its financial conditions and future earnings. King Power expects at least 20 billion baht in annual revenue to be accepted by AOT to continue to maintain operations at a stable level.

Details about the projects

• Hochgeschwindigkeitsbahn: Vertrag im Wert von 224,5 Milliarden Baht, der eine Verbindung zwischen drei wichtigen Flughäfen ermöglichen soll.
• Duty-Free-Verträge: Die aktuellen Verträge laufen bis zum 31. März 2576 (2023), wobei AOT für 2024 mit Einnahmen von 18 Milliarden Baht von King Power rechnet, was 27 % der Gesamteinnahmen ausmachen würde.
• Grüne U-Bahn-Linie: Die Stadtverwaltung von Bangkok hat bereits Schulden in Höhe von 36,4 Milliarden Baht an BTS für den Betrieb der U-Bahn beglichen. BTS erhält monatlich 740 Millionen Baht für den Betrieb.

However, there are significant concerns from the Attorney General's Office about the financial liabilities that the changes to the contracts could create. A total of 18 specific points were identified that illustrate the risk to state interests in the treaty changes. The government also plans to buy back the subway concessions and centralize administration to avoid inefficient structures and ensure better control. 

In the current situation, it is important for everyone involved to find quick and pragmatic solutions. The negotiations now underway could have a decisive impact on the future development of Thailand's transport and retail sectors. It remains to be seen how the government and relevant businesses will respond to these challenges to ensure both economic stability and growth. There is definitely still a lot going on here.