Tunnel expressway project shelved due to projected lack of returns

Transport Minister and Deputy Prime Minister Suriya Juangroongruangkit announced the cancellation of a major expressway infrastructure project’s underground component.

The Expressway Authority of Thailand (EXAT) will not proceed with the tunnel section of the Phase 3 Northern Expressway project (N1 section), which was designed to connect the Si Rat Expressway to both Ngamwongwan and Prasert Manukit roads.

The decision comes after EXAT conducted a detailed financial study of the project. The analysis revealed a concerning contrast between the project’s economic and financial metrics.

While the economic internal rate of return (EIRR) showed a promising 19.2%, the financial internal rate of return (FIRR) was negative, indicating the project would operate at a loss. Suriya explained that EXAT requires the project to be financially viable.

“EXAT, as an investment-driven organisation, requires projects to be financially viable, not just economically beneficial.

“For economic viability, the Ministry of Transport would need to allocate a support budget. Given the costs of construction and maintenance, the project appears financially infeasible and will likely be postponed.”

The cancelled N1 section was planned as a significant infrastructure development, spanning 10.55 kilometres. With a projected cost of 49.22 billion baht, the route was designed to begin at the Si Rat Expressway-Ngamwongwan intersection and terminate at Prasert Manukit Road, where it would connect to the N2 section at Sukhonthasawat Junction.

The distinction between economic benefits and financial viability proved crucial in this decision, highlighting EXAT’s requirement for projects to demonstrate not just public utility but also financial sustainability, reported The Nation.

In other news, Deputy Transport Minister Surapong Piyachote is pushing for Prime Minister Paetongtarn Shinawatra’s approval of a crucial construction contract for the long-delayed Thai-Chinese high-speed train project. This contract is one of the last two to complete the first phase.

Boonchai Panich Co secured Contract 4-5, which involves constructing a 13.3-kilometre section. Despite this, the signing of the contract has been delayed due to concerns about the Ayutthaya Station’s location, 1.5 kilometres from the Ayutthaya Historical Park. Although the planned route does not intersect with the UNESCO World Heritage site, its proximity has raised public apprehension.