The EEC Office will seek a new investor for the state-owned land in the Eastern Airport City Promotion Zone (EECa) in U Ta-pao airport to conduct maintenance, repair and overhaul(MRO).
Deputy Prime Minister and Minister of Finance Pichai Chunhavajira, recently chaired the 4th meeting of the Eastern Economic Corridor Policy Committee (EEC Policy Committee)at the Government House.
Chula Sukmanop, secretary-general of the Eastern Economic Corridor Office of Thailand (EECO) said the EEC Policy Committee approved the adjustment of the operational approach for the U-Tapao Maintenance, Repair and Overhaul (MRO) project due to the Thai Airways International Public Company Limited had no longer be a state enterprise since 2020, it could not be a project owner for the Maintenance, Repair, and Overhaul (MRO) facility at U-Tapao Airport.
He said the EEC Office considers that this project is essential for the development of U-Tapao Airport and for enhancing Thailand’s aircraft maintenance capabilities, as well as for improving the skills of aviation technicians to meet international standards.
Therefore, it is necessary to continue the project to suitable for the changing situation. The EEC Committee has resolved to approve the improvement of the project’s operational approach by canceling its status as a public private partnership(PPP)project, as previously approved by the cabinet on October 30, 2018.
The EEC Office will proceed to find a tenant for the state-owned land in the Eastern Airport City Promotion Zone (EECa) to conduct aircraft maintenance activities in accordance with Section 53 of the Eastern Economic Corridor Act and the regulations of the Eastern Economic Corridor Policy Committee regarding the criteria, methods, and conditions for leasing state-owned land designated as a special economic promotion area in 2019.
The EEC Office will present the EEC Committee’s resolution to the cabinet for acknowledgment and will consider canceling the cabinet’s resolution from October 30, 2018, in the relevant aspects.
To amend investment contract of the high-speed rail connecting the three airports
EEC Policy Committee also approved the principle for resolving the issues of the high-speed rail project connecting the three airports by amending the joint investment contract to ensure that the project can proceed.
This will be based on the assumption that the government does not disadvantage while the private sector does not gain too much benefits.
The proposed contract amendments will be submitted to the cabinet for consideration on five key points, which include:
1)The payment method for public investment cost (public investment cost) has been changed. Previously, when the private sector operated the high-speed train, the government would pay a total of 149.65 billion baht in installments based on the progress of work verified by the State Railway of Thailand (SRT), with a maximum amount of 120 billion baht.
The private sector must provide additional guarantees beyond the original contract, totaling 160 billion baht, to ensure that the high-speed train is constructed and operational within five years. Furthermore, ownership of the constructed assets will gradually transfer to the government (SRT) according to the payment schedule.
2) The payment schedule for the investment rights in the Airport Rail Link (ARL) project requires the private sector to pay a total of 10.67 billion baht in seven equal annual installments.
The first installment must be paid on the date of signing the contract amendment. Additionally, the private sector must provide a guarantee letter issued by a bank, valued at the total amount of the ARL investment rights, including other financial costs for which the State Railway of Thailand (SRT) is responsible.
3) Establish additional revenue-sharing provisions in the event that the project’s loan interest rates significantly decrease in the future, resulting in the private sector achieving a return on investment (IRR) exceeding 5.52%. The State Railway of Thailand (SRT) has the right to request that the private sector pay an increased share of the benefits, the amount of which will be agreed upon later.
4) The exemption from the conditions for issuing the notice to proce (NTP) allows the contracting parties to create a memorandum of agreement to waive the NTP conditions that have not yet been fulfilled. This enables the State Railway of Thailand (SRT) to issue the NTP immediately upon signing the amended contract in accordance with these principles.
5) To prevent future issues that may arise from events significantly impacting the project’s financial status, the contractual clauses regarding force majeure and grace periods will be revised to align with the joint investment agreements between the government and the private sector in other projects.
The EEC policy committee meeting decided that the EEC Office should present the principles for addressing the project’s issues regarding the five mentioned points to the cabinet for approval to review its resolution from March 27, 2018. It also instructed the contracting parties to jointly negotiate the draft amendment contract and submit it to the project oversight committee for consideration. This will then be forwarde to the Office of the Attorney General for review before being presented to the EEC and the Cabinet for final approval of the contract amendment, prior to the contracting parties signing the amende contract.
Acknowledge the progress of the EEC development
The committee also acknowledged the progress of the development of the EEC, particularly regarding the development of EEC promotional zones, infrastructure projects in four major transportation initiatives, and efforts to attract investment in five special target industry clusters.
They are healthcare and medical, digital, next-generation automotive, BCG economy, and services. From January 2023 to September 2024, the EEC Office has attracted 139 investors, with 35 investors expressing interest in the five clusters and submitting Letters of Intent (LOIs) for a total of 36 projects.
Twelve projects have submitted proposals to request benefits under EEC law, with a total investment value of approximately 135 billion baht.
Eastern Economic Corridor Office of Thailand
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