No bids to build Patong Tunnel

The procurement process began on Dec 19, with 13 companies entering formal expressions of interest, EXAT reported on its official Facebook page.

At that time, EXAT Governor Surachet Laopoolsuk explained that the total project budget is B17.811 billion, consisting of land ownership and building compensation costs of approximately B5.792bn, already approved by Cabinet.

Under the terms offered, construction costs were expected to total B8.878bn, and construction supervision to cost approximately B215mn, and operating and maintenance costs were forecast to cost approximately B3.142bn.

The deadline for submitting bids for the Patong Tunnel, which it calls the ‘Kathu-Patong Expressway’, was Apr 7.

However, EXAT has now confirmed, “It appears that no private entity has submitted an offer to invest in the project.”

The lack of any bids was expected to be due to economic conditions “caused by various situations, such as the long-term impact of the COVID-19 virus epidemic, and the protracted Russo-Ukrainian War, resulting in higher interest rates,” the agency noted.

The economic factors have affected the cost of construction from the original estimate of B8.878 billion in 2021, with construction costs now expected to be 10% higher. 

“The result has been the private sector deciding not to invest in the project as it should be, with road infrastructure in Phuket to support Phuket participating in the selection to host the Specialised Expo 2028, a major global event that will be held in 2028,” EXAT noted.

“EXAT will consider reviewing the project implementation, possibly implementing the Kathu-Patong Expressway Project (Project Phase 1) in conjunction with the Muang Mai - Koh Kaew - Kathu Expressway Project (Project Phase 2) combined into one project to incentivise the private sector to be more interested in co-investing,” the agency explained.

“It will consider the investment value of the project. Including the duration of private concessions to be consistent with current conditions,” it added.

For details of the project terms and the 13 companies that expressed interest in building the tunnel, see ‘Companies line up to build Patong Tunnel’.