In the latest development concerning Thailand’s real estate sector, the developer and involved state agencies are faced with considerable liabilities due to damage inflicted by a construction project. These entities have been issued a two-week ultimatum to deliver solutions without resorting to the building’s demolition. This decision comes as the climax of a significant court case wherein the supreme administrative court backed the preceding court’s verdict to retract the construction permit of the Ashton Asoke-Rama 9 scheme.
This construction project has been a subject of controversy, involving the Mass Rapid Transit Authority of Thailand (MRTA) as a party. The MRTA had foreseen the utilisation of the land as part of the first stage of a rail project. The land, initially defined for a plush condominium project, neighboured a public route, Asok-Montri Road. However, a fraction of it was later regained to house the project.
WCP’s legal counsel, Pisit Detchaiyasak, highlighted that reclaimed land could not be assigned to private entities for construction activities. If a plot of land is deemed unfit for construction, any construction permits granted by corresponding authorities are in violation of the law. This technicality is based on the non-compliance of the land with the requirements mandated in the Ministry of Interior Regulation No. 33 (1992).
Along these lines, Prasert Taedullayasatit, Ananda Development Plc’s Property Business CEO, commented on the potential hardships faced by the 668 Ashton Asoke Rama 9 tenants following the Supreme Court’s verdict. Prasert reassured that continuous efforts are being made to pinpoint the accountable parties amidst the five sued government agencies. Several negotiations are intended to transpire with the State Railway of Thailand (SRT) and the Bangkok Metropolitan Administration (BMA), in addition to other government bodies involved. The aim of these discussions is to mitigate the damage inflicted and develop a viable solution within the given 14-day time frame.
Prasert further emphasised the possible implications of the Supreme Administrative Court’s ruling on the trust of consumers and investors. This case is of potential significance due to the issuance of title deeds which signify ownership and residence spanning over four years. A ripple effect is expected on other analogous projects that are interconnected with government agencies under land reclamation legislations.
This case potentially poses a risk to the confidence of the company’s bondholders who hold stakes in units renowned for a sales value of approximately 828 million baht. The company holds half of these shares, leading to a depreciation value estimated between 250-300 million baht. This value is significantly below the threshold necessary to cover the principal and bonds, adds Prasert.
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