Compromise may save expressway authority from paying sky high fees to expressway operator

Photo from BEM FB

The Expressway Authority of Thailand (EXAT) board has agreed to extend the concession period of NECL, a subsidiary of Bangkok Expressway and Metro Public Company (BEM), to operate two expressways for another thirty years, in order to end a legal battle which may result in EXAT being ordered to pay as much as 130 billion baht to NECL.

EXAT board chairman Surong Bulkul said Wednesday that the compromise was the result of lengthy negotiations between EXAT and BEM after the Administrative Court ordered EXAT to compensate BEM’s subsidiary, NECL, for building the second stage expressway, known as Srirat expressway and the D section, in direct competition with the Bang Pa-in-Pakkred expressway, which was built and is operated by NECL under a concession.

He said that, during the negotiations, BEM agreed to reduce the amount of compensation, incurred from the current and any future legal conflicts, from 130 billion baht to 59 billion baht.

He added that continued talks led to a further compromise, with BEM agreeing to waive the 59 billion baht compensation in exchange for a 30-year extension of the concession period to operate the Bang Pa-in-Pakkred, Srirat and Rama IX-Srinakharin expressways.

Under the revised concession contracts, Mr. Surong said that toll fees would be increased by 10 baht every ten years instead of being adjusted in line with the Consumer Price Index (CPI), as stipulated in the original contracts.

However, he added that BEM must invest in the development of the second-stage expressway from Prachachuen to Asoke, covering a distance of 17km, into a double-deck expressway. This will cost an estimated 31 billion baht.

Revenue sharing remains the same at 60% for EXAT and 40% for BEM, said Mr. Surong, adding that the compromise solution was the best option and will need final approval from the government.

 

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