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Enoch Yiu

Hopewell Holdings yesterday denied that its $25 billion contract to build an overhead road and rail scheme in Bangkok had been scrapped by the Thai Government.

 The company's chairman and managing director, Sir Gordon Wu Ying-sheung, issued the denial, while attempting to 'clarify the company's position'.

 'No notice of any kind regarding the project has been received from the Thai Government,' he said.

 His comments add to the confusion that surrounds the future of the Bangkok Elevated Road and Train System (BERTS) following a statement last week by Thai Transport Minister Suwat Liptapallop that the project would be scrapped.

 'The government has reason enough to cancel the contract, because the construction is slow,' Mr Suwat said, conveying a decision reached at a cabinet meeting.

 'The contract is for eight years. Now it is the seventh year and only 12 per cent is completed.'  Sir Gordon was adamant the project had not been 'scrapped', 'terminated' or 'cancelled'.

 He said that according to the agreement, the Thai authorities must provide in writing its reasons for cancelling the project and that Hopewell would have a minimum of 90 days from the receipt of the notice to remedy any default.

 Hopewell could also seek independent arbitration in Bangkok to judge whether sufficient grounds existed to justify termination of the contract.

 Sir Gordon said the financiers to the project could also ask the government not to exercise its right to terminate if the lenders agreed to remedy any default of the subsidiary responsible, Hopewell (Thailand).

 He said in the unlikely event that the project was 'scrapped' any liabilities were those of Hopewell (Thailand).

 'They would not pass on to Hopewell Holdings,' Sir Gordon said.

 He said the company had fulfilled all its commitments under the contract to build the 60 kilometre elevated road and rail network, and that the delay was due to failures by the Thai Government and the downturn in the Thai economy. Sir Gordon said the company had submitted a proposal to the Thai Government on September 26 requesting a revision of both the road toll fees and train fares structure due to the devaluation of the Thai baht.

 He said Hopewell fully intended to complete the project, but if construction was to continue an increase in the toll fees and train fares was a prerequisite for the company because of the decline in the Thai economy.

 'Subject to the full co-operation of the Thai authorities and the conclusion of successful negotiations, Hopewell (Thailand) Ltd can complete the BERTS project,' he said.

 He said Hopewell had already invested $5.3 billion in the Bangkok infrastructure project, and that Hopewell (Thailand) had paid up capital of 9.15 billion baht (HK$1.96 billion) which was higher than the minimum requirement of six billion baht stipulated in the agreement with the Thai Government.

 Sir Gordon said Hopewell's $5.3 billion commitment to the project was fully funded by the company with no bank loans involved.

 Hopewell said yesterday the company intended to seek bank financing to finish the construction if the completion of the project was assured.

 Hopewell spokesman Bob Fienberg said there had been no communication between the two sides since the company submitted the proposal for the revised fares.

 Mr Fienberg said the company would only consider the question of compensation after formal notification of cancellation from the Thai Government.



Hopewell denies cancellation of Bangkok transit project