Thai Billionaire's Global Consortium Bids for Rail Project

(Bloomberg) -- Billionaire Dhanin Chearavanont’s Charoen Pokphand Group teamed up with firms from Asia and Europe to bid for a 225 billion-baht ($6.8 billion) Thai high-speed railway project.

The link will connect three international airports in Thailand and is a key part of the infrastructure agenda championed by the military government that seized power in May 2014. The administration is trying to speed up implementation of its program ahead of a general election due next year.

The consortium submitted its bid on Monday, according to a State Railway of Thailand statement. The only other bid came from a rival alliance led by BTS Group Holdings Pcl, the operator of Bangkok’s elevated metro. The winner is due to be selected in January and contracts signed by the end of that month.

A Charoen Pokphand Group statement on Sunday listed the other members of its consortium as:

• China Railway Construction Corp.
• Bangkok Expressway & Metro Pcl
• Italian-Thai Development Pcl
• CH. Karnchang Pcl
• Japan Overseas Infrastructure Investment Corp. for Transport & Urban Development
• CITIC Group
• China Resources (Holdings) Co.
• Siemens AG
• Hyundai
• Ferrovie dello Stato Italiane SpA
• CRRC-Sifang
• Japan Bank for International Cooperation

The rail link is one of the largest transportation projects in Thai history. It would run between Bangkok’s two international airports and another near the tourist hot-spot of Pattaya, the U-Tapao International Airport in Rayong province.

The project is linked to the Eastern Economic Corridor initiative, a 1.7 trillion-baht plan to add infrastructure and advanced industries along the eastern seaboard.

Some 31 firms, mostly from Thailand, China and Japan, studied the rail link’s terms, according to the Eastern Economic Corridor’s website.

‘Strong Contender’

"C.P. Group has emerged as a very strong contender with its partnership with both local and overseas companies," said Adisak Phupiphathirungul, a strategist at Thanachart Securities Pcl in Bangkok. "It’s still hard to say who is the favorite, because the BTS-led consortium studied the project for quite a long time.”

A general election is possible in Thailand in late February next year, raising the question of whether the next civilian administration will adopt the same priorities -- such as a push for high-speed train connections -- as the military government.

For instance, the upstart Future Forward Party led by tycoon-turned-politician Thanathorn Juangroongruangkit has recommended studying options such as Richard Branson’s Virgin Hyperloop One. Thanathorn has said that developing such networks of pods traveling at airplane-like speeds could enable Thailand to become a technological leader.

The military government is trying to bolster investment in Southeast Asia’s second-largest economy, part of a push to lift the pace of economic growth closer to levels seen in neighboring nations.

To contact the reporters on this story: Sunil Jagtiani in Bangkok at sjagtiani@bloomberg.net;Suttinee Yuvejwattana in Bangkok at suttinee1@bloomberg.net

To contact the editors responsible for this story: Linus Chua at lchua@bloomberg.net, James Ludden, Matthew G. Miller

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