Dhanarak Asset Development Co, a state enterprise under the Treasury Department, has sought the Finance Ministry's approval to grant a 20-year rental contract for a convention centre and hotel at the Chaeng Watthana Government Complex to Centara Hotels and Resorts.
The contract would begin on Nov 26 this year and end June 30, 2038, said Sumet Damrongchaitham, president of Dhanarak Asset Development.
Centara Hotels and Resorts was the only one group that proposed to rent the convention centre and hotel at the government complex by offering 1.15 billion baht for the 20-year contract, above the reference price of 1.14 billion.
The rental space handover can occur immediately because Centara Hotels and Resorts has managed Centra by Centara Government Complex Hotel & Convention Centre Chaeng Watthana for three years, Mr Sumet said, adding that the long-term contract will encourage the concessionaire to invest further.
Proceeds arising from the rental contract will help Dhanarak Asset Development turn a corner after being mired in net losses for 13 years. Part of the proceeds will be used to finance design expenses for the Chaeng Watthana Government Complex's Zone C.
Meanwhile, Mr Sumet expects a plan to develop the Chaeng Watthana Government Complex's Zone C to go before the cabinet by the middle of next year, with construction beginning in late 2018.
The new zone will use eco-friendly construction methods, and the design will be relatively different from that of existing Zones A and B.
Dhanarak plans to offer securitisation, backed by revenue generated by the rental of the complex, to fund development of the Government Complex's Zone C.
Securitisation is a financial instrument that pools together contractual debt or assets and transforms them into a security.
