The Thai Government has told Hopewell Holdings it is not prepared to go to arbitration over its decision to scrap the US$4 billion Bangkok road and rail project and has given the company a March 12 deadline to vacate the project. Hopewell said the government had insisted it had the legal power to terminate the agreement with Hopewell to build the project, meaning it did not have to comply with the compulsory arbitration process set out in the 1990 agreement if a dispute arose. The Thai authorities are also demanding Hopewell hand over a 500 million baht (about HK$89.6 million) performance-based bond within 15 days. A Hopewell spokesman said the company had requested the Bangkok Bank, with whom the bond was lodged, not to hand over the money. The spokesman said the Thai Government's conduct was ominous for foreign companies doing business or preparing to do so in Thailand. 'If Thailand confiscates the project without pursuing the options for remedy according to a signed agreement, then this sends a very bad signal,' he said. In an apparent backdown from its previous position, Hopewell said it was now preparing to remove its plant and equipment from the site. 'Faced with an order from the Thai authorities to do so, Hopewell has very little choice in the matter,' the spokesman said. Hopewell had previously not complied with a government demand made in January immediately to vacate the land. Hopewell has so far kept its equipment at the site and maintained a contingent of security guards to protect the infrastructure from squatters, despite little work having been carried out since late last year. Thai authorities formally informed Hopewell it was scrapping the company's right to build the project on January 27, but a letter sent to Hopewell last week gave the first indication that the government would not comply with the dispute-resolution clauses set out in the lengthy agreement. The Hopewell spokesman said the firm was determined to seek compensation. Hopewell has already spent US$600 million on the project, which is only about 20 per cent completed. Last October, Hopewell revealed it had made a HK$5 billion provision to cover a potential write-off on the project. The Thai Government axed the project because of its repeated delays. The first stage of the project was originally scheduled to be completed by the start of the Asian Games next December. Analysts have long called on Hopewell chairman Sir Gordon Wu to quit Thailand and to focus on his infrastructure projects in Greater China. Concerns about Hopewell's future earnings potential drove shares in the company to just 98 HK cents on January 23 but they have since firmed, to close at $1.71 on Friday.