Thai officials have said they will negotiate with the Hopewell (Thailand) Company after a final court ruling on Monday that the government must pay compensation of about US$372 million for costs of a failed mass transit project.
The Hopewell project to build an elevated road and rail system in Bangkok was signed by the Chatchai Choonhavan government way back in 1990, but the project was scrapped in 1998 after being plagued with funding and construction problems, plus a persistent failure to meet deadlines. Less than 14% of the 60km system had been built when the Chuan Leekpai government terminated the contract.
That began a 21-year legal battle for compensation, which ended on Monday when the Supreme Administrative Court said the government rail authority should pay 11.88 billion baht ($372 million) to the Hopewell (Thailand) Company for its costs.
The ruling is a blow to the State Railway of Thailand, which is already shackled with 100 billion baht in debt. Officials have said they may need to devise a new debt plan.
The court has ordered the government to pay the compensation within 180 days. But the Prayut government’s senior legal adviser, Deputy Prime Minister Wissanu Krea-ngam, said they would negotiate with the company to find a way to settle the issue, now that the matter has been decided.
The Hopewell project was one of the most notorious failures of the 1990s when Thailand experienced a remarkable ‘boom and bust’ era that came crashing down when the financial crisis hit in July 1997. Construction halted on over 500 high-rise buildings, infamous “ghost towers” that stood derelict and abandoned for years.
Giant concrete pylons built as part of the Hopewell project still stand alongside the intercity rail line up past Don Muang Airport in the city’s north – a constant reminder to the heady days when bank loans were given out like candy.
The ruling comes at a time when Bangkok’s mass transit system, known as the Skytrain, is expanding rapidly, while the State Rail body is looking to shed some of its vast land holdings to reduce its huge debts and pay for double-track links into the North, Northeast and South.