Talks hit wall over delay clause
Thai and Chinese authorities failed to reach a conclusion in the latest round of meetings yesterday on whether China can sue the Thai government if the latter fails to meet construction deadlines, thereby causing delays to the Thai-Sino high-speed train project.
The “default clause” in the contract has yet to be wrapped up as China wants the right to sue the government or file a lawsuit to confiscate state assets in other projects if the Thai side fails to proceed with construction of the railway and relevant infrastructure as planned, said Transport Minister Arkhom Termpittayapaisith.
“China wants to know if it can take legal action against Thai government organisations if construction fails or is delayed,” he said.
But the Thai side disagreed as according to the general practice of state contracts, if there is any problem causing a delay such as a natural or man-made disaster, the government will extend the contract period and the contractor cannot sue the government for any delay, said Mr Arkhom.
“The matter has been discussed for over a year now and must be concluded within this month, otherwise the Finance Ministry will face difficulties,” the minister added.
Due to the unsettled negotiations, Thailand decided to engage in civil works and build rail tracks for the first phase — Bangkok-Nakhon Ratchasima — of the Thai-Sino high-speed train by itself, while China will provide the high-speed train technology.
The minister made the comments after the 24th joint committee meeting between representatives from both nations, which was held in Bangkok from Wednesday to yesterday.
According to Mr Arkhom, most of the negotiations have proceeded as planned. However a few delays have resulted from positional changes in China’s National Development and Reform Commission, the agency mainly involved in the highspeed rail talks.
Yet some details relating to the financing of the Bangkok-Nakhon Ratchasima phase have not yet been concluded.
The “most urgent matter” to settle relates to the legal consequences in the event of a contract default causing delays, Mr Arkhom said.
The first phase is estimated to be worth 179 billion baht, or around 708.9 million baht per kilometre of construction. The Bangkok-Nakhon Ratchasima route is set to stretch for 253km.
The Transport Ministry says Thailand will be responsible for 75% of the first phase’s investment, comprising contractor sourcing and raw materials used to construct bridges, tunnels and embankments along the route, supervised by the Department of Highways.
China will cover the remaining 25%, which includes funding for railway construction, signalling networks and train procurement.
Construction of the high-speed railway’s first phase has been split up into 14 contracts, with embankments for the first 3.5km stretching from Klang Dong to Pang Asok in Pak Chong district of Nakhon Ratchasima being under construction since late last December.
The second contract, concerning the next 11km stretch from Sikhio to Kut Chik in western Nakhon Ratchasima, will go up for bidding in August.
The remaining 12 contracts have been split into two batches of six each, Mr Arkhom said.
The first six, covering a total of 119km, will be up for auction from September to January. The rest, spanning a total of 114km, include the construction of a depot in Chiang Rak station in Pathum Thani.
These contracts will be auctioned from November to March.
“Construction for all contracts must start by the end of next year,” Mr Arkhom said.
The complete Thai-Chinese high-speed railway, running from Bangkok to Nong Khai, will span 606km. Thailand will oversee all of the second phase.
China wants to know if it can take legal action ... if construction fails or is delayed. ARKHOM TERMPITTAYAPAISITH TRANSPORT MINISTER