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Companies line up to build Patong Tunnel

PHUKET: Companies bidding to complete the B17 billion Patong Tunnel have until 3pm, April 7 to formally enter their bids, Surachet Laopoolsuk, Governor of the Expressway Authority of Thailand (EXAT), has confirmed.

patongtourismtransportconstructionSafety
By The Phuket News

Saturday 4 February 2023, 01:37PM


Mr Surachet confirmed the deadline at a ‘Pre-Bid meeting’ held at the EXAT headquarters in Bangkok on Tuesday (Jan 31).

Companies had from Dec 26 to Jan 25 to enter their formal expression of interest in the project. Doing so cost each company B200,00 apiece.

Continuing to submit their bid proposals throughout the five stages of the process will cost each company B20,000 each time, Mr Surachet explained after the meeting.

Each bidder must place a B300mn security deposit while the bidding process is underway, he added.

Thirteen companies were confirmed to have submitted their formal expression of interest in the bidding to construct the 3.98-km expressway: 

  1. Sino-Thai Engineering and Construction Public Company Limited (STEC)
  2. China Harbor Engineering Co., Ltd.
  3. Italian-Thai Development Public Company Limited (ITD)
  4. Unique Engineering and Construction Public Company Limited (UNIQ)
  5. Bangkok Expressway and Metro Public Company Limited (BEM)
  6. BTS Group Holdings Plc. (BTS)
  7. Nawarat Pattanakarn Public Company Limited
  8. Right Tunneling Public Company Limited (RTCO)
  9. CH. Karnchang Public Company Limited
  10. Don Muang Tollway Public Company Limited (Don Mueang Tollway)
  11. Egis Group (France)
  12. SRBG Bridge Engineering (China)
  13. China Railway Construction (Thailand) Co., Ltd.

Each bidder must be a single legal Thai juristic person registered in Thailand for at least three years from the date of submission of the proposal. or will be multiple juristic persons combined which must have at least one Thai juristic person and must be registered for not less than three years on the date of proposal submission.

The “Thai juristic person” also must have not less than 35% controlling interest in the group, and the “Thai juristic person” must hold a stake of not less than 51% in the actual company leading the bid.

The bidder must have registered capital of at least B1.1 billion on the contract signing date in order to assure the project will be completed, Mr Surachet explained.

The winning bidder is expected to sign a Memorandum of Understanding (MoU) with EXAT in December, he added.

THE PROJECT

The four-lane expressway will connect the eastern part of the island to Patong Beach by running from Phra Metta Rd in Patong to Tambon Kathu.

The road will be elevated from Phisit Goranee Rd in Patong to the Nakkerd Hills, a distance of 900 metres. The tunnel itself will be 1.85km long.

After passing through the hills, there will be an elevated road, a distance of 1.23km, ending at an intersection with Highway 4029 (Phra Baramee Rd) in Kathu.

There will be two entrances and exits at Phra Metta Rd and at the intersection of Highway 4029, and a toll booth in Kathu.

The total project budget is B17.811bn, consisting of land ownership and building compensation costs of approximately B5.792bn, already approved by Cabinet.

Construction costs are expected to total B8.662bn, and construction supervision costs to cost approximately B215mn, and operating and maintenance costs are forecast to cost approximately B3.142bn, Mr Surachet noted.

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THE TERMS

The expressway will be built under a public-private partnership (PPP) model, with land expropriation handled by the government.

Construction is expected to begin in 2024 and be completed by 2027.

Under the contract, the government is responsible for land ownership. while the private sector is responsible for detailed design and construction (including work control costs) and operations and maintenance (Operation and Maintenance: O&M), EXAT explained in their report of the meeting.

The operator must cede all ownership and operating rights to the government after 35 years under the ‘Build-Operate-Transfer’ model. The 35-year period will begin on the date the EXAT issues the notice for the contractor to proceed with construction.

Phase 1 of the project is deemed the ‘Design and Construction’ period, which will be not more than four years from the date EXAT issues its ‘Notice to Proceed’, followed by Phase 2, the ‘Operations and Maintenance’ period.

Total duration of both Phase 1 and Phase 2 will be not more than 35 years.

Estimated traffic volume when the road and tunnel opens is expected to be about 71,000 vehicles per day (36,000 cars/day, 35,000 motorcycles/day).

Financial return NPV is expected to be B1.734bn. The Equity IRR Target is 8.50% and the B/C Ratio 1.12x, EXAT noted in its report.

The total ‘Payback Period’ is expected to be 21 years.

“This project is economically appropriate. The economic rate of return (EIRR) is 20.44%,” the EXAT report said.

“The goal of the Kathu-Patong Expressway Project is to connect the route from Kathu to Patong Beach and facilitate travel for local people and tourists, and help to promote tourism to Phuket,” Mr Surachet said on Tuesday.

“The project will be able to help alleviate traffic problems and reduce accidents on Highway 4029 [the road over Patong Hill], as well as being used as an evacuation route in the event of a disaster,” he added..

“The construction of this project is expected during 2023-2027 and will be able to open for service in time for the Specialized Expo 2028 which is scheduled to be held from March to June 2028,” he noted.

As part of the bidding process, companies are invited to have their representatives join a formal inspection visit to the site, in Phuket, next Friday (Feb 10), Mr Surachet noted.

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Capricornball | 05 February 2023 - 12:39:52

Come on JohnC, are you stooping to Poolie, Matt and Harald level where you just comment on comments? Fascinated is correct, this boondoggle project is being sold on the premise that EXPO is coming (which it won't, Phuket is not ready). This project will do nothing to improve traffic or safety. It will be fraught with overruns and allow greedy officials and their cronies to stuff their pockets.

Capricornball | 05 February 2023 - 12:24:15

After all the press this week, it just becomes more clear all the time that Thai officials are pretty much all corrupt and care about nothing other than stuffing their pockets, regardless of the cost to the Thai public. This foolish tunnel project epitomizes how the well connected and their crooked cronies are drooling over the opportunities for pilfering that this boondoggle represents

Kurt | 05 February 2023 - 09:35:09

Bidding: 1: 'Expression', costs each company, B200,000 per piece. 2: 5 Stages of proposals, B20, 000 x 5 =B100,000. 3: A Bidding deposit of B300,000!  So, during bidding fork up B600,000.  Do I miss something? @Fascinated, that motorbikes will be allowed in this tunnel is that they bring in toll.  And they better stop linking to Expo2028, if tunnel not ready, not getting Expo, huh?

JohnC | 05 February 2023 - 08:58:04

@farcenated. Sounding more and more like kurt with every new comment. Another "expert" on how things should be done. Whinge whinge whinge! Pathetic.

Fascinated | 04 February 2023 - 18:55:27

One hopes the bidding money is being tracked and audited. Funny that they've already decided that they are getting the Expo- one wonders if the organisers are aware of it? Bearing in mind motorbikes (in theory) are banned from other tunnels in Phuket what makes this one different? its a totally unnecessary vanity project that will do nothing for road safety.

 

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