Workers rally over THB6 billion payment default in Thai Oil project

Some 500 employees from over 20 subcontractors working on Thai Oil Plc’s clean fuel project (CFP) rallied outside the South Korean embassy in Bangkok on Thursday to protest against a default in payments.

The project kicked off in 2018 when Thai Oil, a listed subsidiary of national gas and oil conglomerate PTT Plc invested US$4.82 billion (159.22 billion) baht in a clean fuel initiative, promising an interest of $151 million (4.98 billion baht) throughout the five years.

The project was awarded via bidding to the UJV Consortium, which comprises Petrofac International (UAE), Samsung Engineering Ltd and Saipem SPA.

According to a complaint filed with the Department of Special Investigation (DSI) by Thai Oil’s shareholders last month, the three contractors have defaulted on paying compensations worth over 6 billion baht to 28 subcontractors for eight months now, resulting in them suspending the project’s construction indefinitely.

A subcontractors’ representative said on Thursday that the payment default has affected companies employing over 5,000 workers, with some having to shut down due to heavy losses.

In response, Thai Oil issued a statement on Thursday asserting that it has paid the compensation to the UJV Consortium as per the contract, and has done all it can to push the contractors to pay the wages owed to subcontractors.

“Thai Oil and subcontractors are both affected by the UJV’s failure to fulfil the contract. The company is committed to completing the construction of the CFP project as quickly as possible, as one of our urgent and primary goals,” the company said.

Thai Oil noted that the CFP had been delayed due to the impact of the Covid-19 outbreak, prompting the company to amend the contract in 2021, extending the delivery deadline of the project and increasing the budget by $550 million (18.6 billion baht).