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Thailand to start new airport construction without JBIC loan.

BANGKOK, July 19 Kyodo

Thai Prime Minister Thaksin Shinawatra insisted Thursday that Thailand will go ahead with construction of a new airport passenger terminal even without approval from its biggest lender, the Japan Bank for International Cooperation (JBIC).

Thaksin spoke at the site of the new airport while inspecting the project.

New Bangkok International Airport Co. (NBIA) will start driving piles for the construction project in mid-August with its own funds as it cannot wait for JBIC approval on possible loans.

''We have to let JBIC know that we need to go on...otherwise we will lose the opportunity,'' Thaksin said.

The new airport, located in Nong Ngu Hao southeast of the capital, is to replace already overcrowded Don Muang Airport. But the 120 billion baht ($2.6 billion) project, which was scheduled to be complete in 2004, has been long-delayed due to allegations of a lack of transparency and charges of mismanagement.

So far, about 25% of the costs are covered by a 33.6 billion baht loan from JBIC. Overall, more than half the total loans are expected from JBIC.

Further delay would threaten Thailand's aim of becoming a regional aviation hub, experts suggested.

The most recent setback was caused by trouble with designs of the passenger terminal and concourse.

Last September, two bidders came in with bids -- on a design by U.S.-based Murphy Jahn Tams-Act (MJTA) -- that were 8.8 billion baht over the budget of 45.7 billion baht.

The NBIA then ordered MJTA to modify its design to bring the costs within the budget target, under the condition of using 80% local materials.

The NBIA then canceled the first bid and is now seeking JBIC approval for new bidding on the modified design.

The new design is expected to cut 35-37 billion baht of the cost in a bidding expected to finish by December.

Thaksin said he is confident the new bidding process will be clean as long as the design and ceiling price are accurate. He also assured financial support from the government.

''Today, with the reduction of the cost, I'm not worried about loans, but it doesn't mean that we don't want JBIC money. We still do...,'' he said.

''We have to borrow on the basis of mutual understanding. It would not be right if the loan (conditions) will mean we have no freedom to make our own decision on the right things...We will seek cooperation from JBIC and sympathy from Japanese government,'' he added.

A source from the Japanese government said the acting chairman of NBIA, Srisook Chandrangsu, will go to Japan to discuss the matter directly with JBIC.
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Publication:Asian Economic News
Date:Jul 23, 2001
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