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Andrew Chetham

William Barnes

Hopewell Holdings plans to start proceedings to claim compensation from the Thai Government following last year's cancellation of its Bangkok road and rail project.

 The country's Deputy Transport Minister Pradit Pattaraprasit warned that it would counter-sue if Hopewell went ahead.

 He also attacked moves by Hopewell to paint a negative picture of Thailand to international investors.

 The Thai authorities terminated the US$4 billion venture last year after Hopewell fell behind with construction and failed to secure project financing for the transit system, known as Berts.

 Hopewell had spent about HK$5 billion of its own cash on Berts when its concession to build and operate the project was ended.

 Under the terms of the contract with the State Railway of Thailand and the Thai Government, should a contractual dispute arise an independent third party can be brought in to assess the claim and possible compensation.

 Hopewell said it had now invoked this clause in the contract and would appoint an expert from outside Thailand in accordance with its rights.

 Hopewell chairman Sir Gordon Wu Ying-sheung said that the company had been patient with the Thai Government in trying to resolve the issue and had abided by the terms of the international contract signed with the government.

 He said Hopewell was left no option but to take the next move allowed under the contract.

 'The whole world is watching this case because we are talking about a major international contract being unilaterally cancelled under the Civil and Commercial Code of Thailand with a complete disregard to the contract,' Sir Gordon said.

 Sir Gordon's attempts to focus international attention on Thailand appear to be cutting little ice with the government.

 Mr Pradit yesterday threatened to retaliate if Sir Gordon continued to try to undermine investor confidence in Thailand.

 'We have been silent for quite some time. If Sir Gordon really wants to speak out we will have to tell people all over the world about this project,' he said.

 'I've not really publicly spoken out yet, but recently he has been printing documents and showing them around the world. I think this is wrong.

 'If Sir Gordon's tactic is to intimidate Bangkok by menacing its good name with his hard-luck story, it will backfire.'  In September, it emerged Hopewell had hired a team of US litigation lawyers to study the Berts project for a 'second opinion' on how to proceed with its quest for compensation.

 Last year, Hopewell set aside HK$5 billion to cover the potential loss of its investments in the 57.6 kilometre transit system.

 The project ran into difficulties when prospective profits from associated property ventures next to the road and rail lines evaporated when Bangkok's property market slumped.

 Revenues from fares and tolls alone were deemed not enough to support the project's development.

 'They only completed 12 per cent of the work they were committed to finishing in time for [next month's] Asian Games. Who is being fair to whom?' Mr Pradit said.

 'If the work is completed by 70 per cent and we terminate it might be unreasonable. But 12 per cent - I don't think so!'  Mr Pradit said the impact on international opinion was carefully considered before the project was scrapped by the previous government.

 'This wasn't something done on a whim. We decided we were capable of telling investors who is the one who is not fair,' he said.

 Despite the inability of Hopewell and the Thai Government to see eye-to-eye over the issue, Mr Pradit still held out the possibility that Hopewell could compete for a new tender to run a cut-down version of Berts.



Hopewell to sue Bangkok over failed transit project