Treasury sets Mor Chit IRR

The Treasury Department has set the internal rate of return (IRR) for the long-delayed Mor Chit development project at 10-12%, its chief says.

The estimated IRR is based on Bangkok’s new city planning under the floor area ratio (FAR) — a proportion of a building’s total area to the size of the land upon which it is built — said Treasury Department director-general Chakkrit Parapantakula, adding that the new city planning directive scaled down the building’s usable area by 200,000 square metres from almost 1 million previously.

The concession to develop the 63-rai Mor Chit project was won by Bangkok Terminal, but the company failed to start the project due to legal obstacles, which have now been cleared after the Supreme Administrative Court ruled the concession contract abided by the law and is valid.

At that time, the project was to be developed as commercial and residential areas, a skytrain depot and a bus terminal for routes to the North and Northeast. Mor Chit bus terminal had earlier been moved to Kamphaeng Phet Road to allow the project to be developed and the plan was to move it back to the Mor Chit site.

However, state-owned Transport Co in May said that it will relocate the bus terminal on Kamphaeng Phet Road to an existing site belonging to the company in Pathum Thani’s Rangsit area, which currently serves as a maintenance and repair depot. Buildings and other related facilities will be constructed to serve passengers.

Mr Chakkrit said investment for the Mor Chit project is estimated to increase to more than 20 billion baht from the previous 19.6 billion baht.

The Treasury Department will set the project’s concession period, which will start after the construction is completed, at 30 years. Construction is expected to take five years, he said.