Closure of the Expressway Compensation Saga! Expressway Authority Negotiates 30-Year Concession Exchange with BEM to Invest in Two-Level Expressway

Dec 21, 2018 | view 13,820

Closure of the Expressway Compensation Saga! The board of the Expressway Authority has approved negotiations to exchange a 30-year expressway concession with a debt of 137 billion baht, but has set conditions that BEM must invest in a two-level expressway and reduce toll fees in return.

Mr. Surong Bulakul, Chairman of the Expressway Authority of Thailand (EXAT), revealed that today (December 20), the board meeting approved the Expressway Authority to proceed with negotiations with Bangkok Expressway and Metro Public Company Limited (BEM) to resolve disputes and lawsuits between the two parties in several cases.

Initially, BEM has been very cooperative, and the negotiations are considered quite successful. The Expressway Authority proposed to extend the expressway concession for the Udon Ratthaya and Si Rat expressways, as well as the outer city network (Expressway Phase 2) sections C and D, overall to clear the debt to zero. The duration of the concession extension is still being calculated, but it is initially estimated to be between 30-40 years.

Image from the website of Bangkok Expressway and Metro Public Company Limited (BEM)

At the same time, the Expressway Authority has also set other conditions for BEM to implement, such as BEM must construct a two-level expressway from Prachachuen to Asoke with an investment of over 30 billion baht to alleviate traffic problems, as well as manage additional traffic flow, reduce toll fees, and address other related issues as compensation.

The Expressway Authority aims to finalize the negotiations and present the results to the Public-Private Partnership Policy Committee (PPP Board) for consideration within next week. After that, it will be submitted to the Ministry of Transport and the Cabinet for further consideration.

“The negotiations are one of the ways to resolve disputes among three options. The Cabinet resolution has instructed the Expressway Authority to negotiate debt reduction with the private sector first. I believe this approach has the potential to relieve the debt incurred by the organization, freeing the government from liabilities, providing citizens with more expressways, keeping tolls at reasonable levels, and allowing the private company to remain viable, thus helping to close the long-standing expressway lawsuit saga,” Mr. Surong stated.

Mr. Surong Bulakul, Chairman of the Expressway Authority of Thailand

Currently, the Expressway Authority and BEM have concluded one lawsuit, where the Expressway Authority must pay compensation of 4 billion baht by December 19. The Expressway Authority is negotiating to defer this debt until the negotiations reach a conclusion.

Additionally, the Expressway Authority and BEM have ongoing disputes amounting to 80 billion baht that are currently in court or arbitration. If other cases are included, such as those whose statute of limitations is uncertain or cases that may be litigated, the total value of lawsuits could reach up to 137 billion baht.

Although these lawsuits arose from past government actions, I would like to emphasize that the decisions made by previous governments were not intended to benefit private entities but were meant to serve the public interest.