The 224.5-billion-baht high-speed railway linking Don Mueang, Suvarnabhumi and U-Tapao airports was approved in March 2018 under Gen Prayut Chan-o-cha's administration as a flagship Eastern Economic Corridor (EEC) project. More than eight years and seven governments later, the project remains stalled by a combination of land, financing and contractual disputes. Although the Office of the Attorney General (OAG) has cleared a draft contract amendment, key disagreements between the state and the private concessionaire remain unresolved.
What is the project?
The 220-kilometre railway linking the three airports will have nine stations across five provinces, comprising Bangkok, Samut Prakan, Chachoengsao, Chon Buri and Rayong. It combines part of the existing Airport Rail Link with new high-speed rail infrastructure to become the transport backbone of the EEC. It is expected to improve connectivity between airports, industrial estates and tourism centres while supporting the expansion of U-Tapao Airport and the Eastern Aviation City.
Who is building it?
The project is a public-private partnership (PPP) between the State Railway of Thailand (SRT) and Asia Era One, a consortium led by CP Group. Asia Era One won the concession in 2019 after seeking 117.2 billion baht in government investment support. The consortium's major shareholders are CP Group through Charoen Pokphand Holding (87.15%), Bangkok Expressway and Metro Plc (5.14%), China Railway Construction Corporation (5.14%) and Italian-Thai Development (2.57%). The concession covers the construction and operation of both the high-speed railway and the existing Airport Rail Link. Under the October 2019 agreement, construction was to be completed within five years of a formal Notice to Proceed.
Why has it been delayed?
Delays stem from administrative, technical and financial issues. Early obstacles included land handovers, investment promotion approvals and design coordination, including disputes over land use, integration with the Thai-Chinese high-speed rail project and U-Tapao Aviation City plan adjustments. The Covid-19 pandemic then disrupted economic conditions, while rising costs and tighter financing further complicated viability. Consequently, the Notice to Proceed was never fully activated, and full-scale civil construction did not begin.
Contract amendments
Asia Era One said the pandemic fundamentally altered the assumptions underpinning the original agreement. Weaker passenger forecasts, economic uncertainty and restrictive lending made it difficult to secure financing under the original terms. In October 2021, the cabinet approved principles for Covid-19 relief measures, paving the way for amendment discussions. Asia Era One maintains revisions are necessary to make the project bankable.
What changes were proposed?
Asia Era One proposed changes to the financing and payment structure. The most controversial involves changing the government's payment mechanism. Originally, the government was to provide its investment contribution only after construction was completed and services had begun. Asia Era One proposed a "build-and-pay" model, paying state support progressively as construction milestones are achieved. The consortium said earlier payments would improve cash flow, lower risks and secure loans. The amendment would also require the consortium to provide additional guarantees worth about 160 billion baht and commit to completing construction within five years of the amended agreement taking effect.
Ministry resists
The ministry emphasised that financing risk should remain with the private concessionaire, a core principle of the 2019 PPP agreement. Deputy Prime Minister and Transport Minister Phiphat Ratchakitprakarn has repeatedly stated that changing the payment structure would increase the state's financial exposure. The government is also concerned that major changes could set a precedent, encouraging private operators to seek similar concessions when conditions deteriorate.
OAG's conclusions
The OAG recently reviewed the proposed amendments and raised 18 observations before clearing the draft. The review focused on protecting public interests, consistency with previous cabinet resolutions and EEC policies, and safeguards against default. Key protections include the proposed 160-billion-baht guarantees covering civil works, systems installation, service obligations and outstanding commitments. The OAG required the guarantees within 270 days of signing, with portions released progressively as milestones are completed. While removing a significant legal obstacle, the review did not resolve the policy disagreement over payment terms.
What happens next?
The project's future depends on whether the government and Asia Era One can bridge their differences. Although Mr Phiphat does not support a build-and-pay arrangement, the OAG found no legal objection to the draft amendment, subject to its observations and cabinet approval. If pursued, the proposal must be submitted for cabinet consideration. If no agreement is reached, Asia Era One may have to seek alternative financing under the existing framework. Further delays could affect related EEC projects and undermine confidence in Thailand's ability to deliver large-scale PPP infrastructure. The State Audit Office warned continued delays could expose the state to compensation claims.
