PROJECT DEADLINE
U City has 15 days to show commitment, financial readiness to build a delayed luxury hotel on a prime plot by Chao Phraya river.
The Treasury Department has given a 30-day deadline for SET-listed U City, a concessionaire with a prime plot on the east bank of the Chao Phraya river, to show commitment and financial readiness in developing a delayed six-star hotel project.
On the plot stands the 100-year-old Customs House, part of which is now being used as a river police station.
There are around 15 days left for U City to submit documents that express its readiness both financially and in terms of business partners to push ahead the project’s development, said department’s directorgeneral Chakkrit Parapantakul.
Natural Park was renamed U City after completing an amalgamation with BTS Assets Co and Kamkung Properties Co from BTS Group Holdings, and its consortium won a 30-year concession contract from the Treasury Department in 2005 to develop and manage the boutique hotel with no more than 33 rooms on a five-rai plot on Charoen Krung Road, even as there were doubts over its financial status.
Amanresorts Services and Silverlink Holdings Limited were reportedly Natural Park’s business partners for the hotel at that time.
The group paid 128.3 million baht in cash to the department, of which 125 million was a front-end fee and 3.3 million rent for the first year. It also placed a letter of guarantee worth 43.6 million baht as collateral. The department will receive a total of 1.34 billion baht from the concession.
However, the project never got off the ground. The company said the department did not hand over the land plot because part of it is still being used as a river police station.
Mr Chakkrit said the department would propose to the government’s joint venture committee under public-private partnership that it consider whether the hotel project should go ahead if the concessionaire fails to show its commitment by the deadline.
If it misses the deadline, the department also plans to file a lawsuit against the concessionaire, demanding the unpaid rental fee and fines, he said.