Well, so much for a speedy push through of infrastructure projects, the government decided to take over the SRT and redo the TOR for the inter-city dual track rail network projects that are worth an estimated ~THB 100 bn.

Why? The public reason is to allow smaller firms to participate in the bidding and construction of these projects

Does it make sense? Not really because they don’t have the necessary balance sheet to bid for these large projects AND would most likely have participated as sub contractors.

So why the change? No comment, I prefer not to be invited for a cup of tea for attitude adjustment. But if the average price of the projects increase by +30-50% well, you get the hint.

Should you bother looking at contractors or materials? Sure at the right price they’ll be attractive

What names? Well the usual suspects of UNIQ, ITD, CK, STEC then to the small ones of NWR, SEAFCO, CNT, PYLON, on the material side SCC, SCCC, SCP, I’m sure there are a few others but these are the ones off the top of my head

What’s the timeline? First the panel will recommend how to split the 5 major contracts for the rail routes into 13 contracts valued at THB 5-10 bn each. Then this will be forward to the SRT, the Transport Ministry and the Cabinet. Then a new TOR will be draft, and considered by the panel before inviting bids from the corporates. So in a perfect world with NO MORE DELAYS bidding could start by 2Q17-3Q17.

Route

Amount (THB b)

Distance (km)

Number of contract

Prachuap Khiri Khan-Chumphon

17

167

1

Hua Hin-Prachuap Khiri Khan

10

90

1

Map Kabao in Saraburi-Jira intersection in Nakhon Ratchasima

26

132

1

Lop Buri-Pak Nam Pho in Nakhon Sawan

25

148

1

Nakhon Pathom-Hua Hin

20

165

1

Total

98

702

5

  1. There will be a doubt on capacity of smaller contractors to proceed on their owns. In a way of sub-contractor, there is a comfort when works can not be completed, the main contractor will take over and continue until finishing.

    Financially, the balance sheet of small contractors is weaker and is harder for lender to justify.

    I am indifferent. My best suggestion for a government is to release the new Term of Reference asap, so that every party can plan what to do in the next steps.

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