Airports of Thailand to examine reinstating King Power contract

Gavin Lipsith

Print Article E-Mail Article E-Mail Author

Local reports suggest the authority appears willing to settle its dispute with King Power International Group Thailand at Bangkok Suvarnabhumi airport

Thai media reports indicate that the new board of Airports of Thailand is investigating ways to settle its long-running dispute with King Power International Group Thailand over the commercial and duty-free contracts at Bangkok Suvarnabhumi airport. The authority has included concession revenue—over Bt3bn ($94.7m)—from the retailer in its accounts for the first time since the start of the dispute, and has set up a subcommittee to investigate how to make the 10-year concession agreement legal.

Airports of Thailand terminated the two agreements with King Power in March last year after claiming that the retailer had under-represented the value of investment in the contract to avoid closer scrutiny of the deal. King Power has since been operating at the airport under an injunction protecting it from eviction.

The booked concession revenue represents a proportion of King Power’s concession payment for the past six quarters, according to Kim Eng Securities (Thailand), with the remaining Bt3bn expected to be registered on the authority’s accounts for April to June 2008.

The booking of King Power revenue and the commitment to investigate reinstating the contract suggest that the new board appointed by Airports of Thailand is ready to forget the grievances of the old board against King Power, and allow the retailer to continue its business at Suvarnabhumi airport.

Airports of Thailand adjusted its profit expectations for this year and next year upward in light of the additional booked revenue, and its shares closed slightly higher yesterday (April 28) with analysts expecting further improvement in the share price to follow.