BANGKOK — The 290-billion-baht ($8.9 billion) Thai project to develop U-Tapao Airport and Eastern Aviation City has stalled. Bangkok Airways has signalled that it may pull out of the contract and demand 4 billion baht ($123 million) back from the government that it has already invested.
Puttipong Prasarttong-Osoth, president of Bangkok Airways Public Company Limited, said after the internal meeting of U-Tapao International Aviation Company Limited (UTA) on 1 September that if the government does not provide clarity within a month, the company is ready to terminate the contract citing non-compliance with the terms and will ask the Eastern Economic Corridor Policy Committee (EEC) to return the 4 billion baht already invested.
Project Downsizing
UTA has been waiting for EEC’s approval to downsize its investment plan. The original first phase was designed for 12 million passengers per year, but the company wants to start with just 3 million passengers per year, as current passenger traffic is only 400,000 per year. The investment would then be gradually expanded to 6 million, 8 million and finally 12 million passengers per year, depending on future demand.
According to EEC rules, such a revised plan must be submitted to the Cabinet. However, it has not yet been submitted as numerous factors, notably political uncertainty, have delayed the project and the future timetable remains unclear.
In the meantime, there has been no progress on the high-speed train project, which is supposed to connect the three airports (Don Mueang, Suvarnabhumi and U-Tapao) and was supposed to be completed by June according to the contract. Around five years have now passed since the contract was signed and construction has not begun.
Politics Won’t Hurt Tourism
Commenting on the political turmoil following the Constitutional Court ruling that disqualified Prime Minister Paetongtarn Shinawatra, Puttipong said Bangkok Airways’ business would not be affected even with a new prime minister and government and the airline was ready to continue supporting Thai tourism.
“Thailand is not like other countries. There are many provinces and destinations for tourists to choose from. Visitors will just go where they feel safe. I don’t think this political episode will affect tourism across the country because there have been no serious incidents that have led to border closures,” he said.
MRO Project Shared with Thai Airways
As for the maintenance, repair and overhaul (MRO) centre project at U-Tapao airport, which will be jointly funded by Bangkok Airways and Thai Airways International, Puttipong confirmed that the details have already been submitted to the EWG.
Under the plan, Bangkok Airways will use 30 rai of the 200-rai site and invest about 1 billion baht to service narrow-body aircraft such as Airbus A320 and A319. Thai Airways will focus on wide-body aircraft. Each party will build separate hangars to ensure operational flexibility.
The MRO centre is part of the 6,500-hectare U-Tapao and Eastern Aviation City project in Rayong province, a strategic initiative under the EEC to transform U-Tapao International Airport into Bangkok’s “third gateway to the world” while developing a full-fledged aviation city. The project aims to create a regional hub for aviation business, logistics and aerospace industries, as well as tourism and entertainment zones.
The plan has been underway since 2015 under the military government, which had originally scheduled construction to begin in 2025.
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