Thailand gives CP Group till Oct 15 to sign 225b baht rail deal

Bangkok

THAILAND has given the agro-industrial conglomerate Charoen Pokphand Group (CP) until Oct 15 to sign an investment agreement for the 225 billion baht (US$7.36 billion) high-speed train project.

Deputy Prime Minister Anutin Charnvirakul announced the deadline on Thursday, adding that CP's bid for the project was 60 billion baht (nearly US$2 billion) lower than its competitors'.

CP Group and 12 other companies won the bid for the project in May, beating out a consortium led by mass transit operator BTS Group Holdings.

Since then, the company has been negotiating with the State Railway of Thailand on the terms of the agreement, including land ownership.

Mr Anutin said: "On Oct 15, CP Group should sign the contract because if they don't, they will be blacklisted by the government."

He said failure to sign would mean that other companies in the CP bidding group - including Bangkok Metro Expressway and Metro, Italian Thai Development, CH Karnchang and China Railway Construction - could be similarly blacklisted for future government projects.

The high-speed train project, a private-public partnership, will connect Thailand's main international airport Suvarnabhumi to low-cost carrier airport Don Muang and U-Tapao airport in eastern Thailand.

The acting governor of the State Rail of Thailand, Worawut Mala, told Reuters: "I think there will not be a problem in signing."

There were land-transfer concerns because of utility infrastructure that involved other agencies, but these issues have since been resolved through meetings, he said, adding that the government is ready to support the project.

CP Group, owned by Thai billionaire Dhanin Chearavanont, has businesses in agriculture through CP Foods, telecommunications in China-mobile backed True Corporation and Ping An Insurance Group.REUTERS