Amendment of PPP Agreements


by Panisa Suwanmatajarn and Krerktanes Suwanprasit

On 2nd July 2019, the Cabinet approved for amendment of 4 joint investment agreements under the Public-Private Partnership Act B.E. 2019 (“PPP Act). Brief details of the PPP Act have been published previously in our website. Those joint investment agreements have been entered into by and between Airports of Thailand Public Company Limited and its contractors for the services of cargo, ground facilities and maintenance and kitchen, Such amendment of joint investment agreements were proposed by the Ministry of Finance after having approval by the Board of Directors of Airports of Thailand Public Company Limited, the Attorney General and related agencies, i.e. the Ministry of Finance, the Council of State, and the National Economic and Social Development Council.

The above-mentioned amendment is as follows:

Method 1: Delaying the payment of percentage compensation and minimum compensation from the 2nd year to the 4th and 5th year of the joint investment agreements;
Method 2: Exemption of the payment of minimum compensation for 9 months (April – December of 2010); and
Method 3: Delaying the payment of percentage compensation and minimum compensation from the 3rd year to the 6th year of joint investment agreements. For the 4th year onwards, delaying the payment of percentage compensation and minimum compensation as the same as adjusted on the 3th year to the 6th year of joint investment agreement until the 20th year has lapsed.

Such measures are considered as amendment of compensation collection which are in relation to the state benefits and that it is considered as revision of the joint investment agreements on an important part. Therefore, Airports of Thailand Public Company Limited shall need to follow the provision of Section 47 of Private Investments in State Undertakings Act B.E. 2013 (“PISU Act”) which is currently in accordance with Sections 64 and 68 (3) of the PPP Act. Main purpose of the amendment is to help entrepreneurs who have been affected by political unrest resulting in closure of Suvarnabhumi Airport for about 9 months in 2010.

However, delaying the payment of state’s compensation under the above-mentioned measures shall not exceed to actual value of damages.

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