Orange Line route hits contract snag

Deputy Prime Minister Anutin Charnvirakul yesterday ordered the revision an investment proposal for the construction and operation of the Orange Line electric rail route’s 122-billion-baht western section before it is submitted to the cabinet.

After meeting parties involved in the investment project he said changes could be needed before the proposal is sent to cabinet for clearance.

Mr Anutin is the deputy prime minister overseeing the Transport Ministry.

Although the investment plan was approved by a public-private partnership (PPP) investment committee set up by the previous government, the Transport Ministry now wants to alter things to maximise the potential benefits to the state from the rail scheme, he said.

The ministry is looking to divide the project contract into two.

The first would be for the construction of the electric rail route from the Thailand Cultural Centre to Bang Khun Non in Thon Buri. The other would be for operating the train service, Mr Anutin said.

“Personally, I think that splitting the contract into two would be a better option. We usually do it this way and there have not been any problems so far with this method,” he added.

Having two contracts shows good practice when it comes to investment diversification and income distribution, which will benefit the economy better, he reasoned.

However, the Finance Ministry has raised an objection to the Transport Ministry overriding the PPP committee’s approval of the single contract, said Mr Anutin.

The Finance Ministry has urged the Transport Ministry to base its decision on the estimated internal rate of return (IRR) of the project, he said.

However there are inconsistencies in different versions of the IRR calculated by different organisations, Mr Anutin said, adding that the Transport Ministry will have to look at these closely to find the most suitable one before this project is forwarded to the cabinet.