Compromise could save expressway authority from paying exorbitant compensation

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Thailand’s Expressway Authority (EXAT) board has agreed to extend the concession period of NECL, a subsidiary of Bangkok Expressway and Metro Public Company (BEM), to operate two expressways for an additional thirty years. The hope is they can avert a legal battle which could eventually result in the government authority being ordered to pay as much as 130 billion baht compensation to NECL.

Thai PBS reports that EXAT board chairman Surong Bulkul says that the compromise was the result of lengthy negotiations between EXAT and BEM after the Administrative Court ordered EXAT to compensate BEM’s subsidiary, NECL, for building the second stage expressway, known as Srirat expressway and the D section, in direct competition with the Bang Pa-in-Pakkred expressway, which was built and is operated by NECL under a concession.

During the negotiations, BEM agreed to reduce the amount of compensation, incurred from the current and any future legal conflicts, from 130 billion baht to 59 billion baht.

Surong added that continued talks led to a further compromise, with BEM agreeing to waive the 59 billion baht compensation in exchange for a 30 year extension of the concession period to operate the Bang Pa-in-Pakkred, Srirat and Rama IX-Srinakharin expressways.

In the Thai PBS report, Mr. Surong says that toll fees would be increased, in the revised concession contracts, by 10 baht every ten years, instead of being adjusted in line with the CPI, as stipulated in the original contracts.

However, he added that BEM must invest in the development of the second-stage expressway from Prachachuen to Asoke, covering a distance of 17 kilometres, into a double-deck expressway. This will cost an estimated 31 billion baht.

SOURCE: Thai PBS