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AOT leaves new airport buildings uninsured

BackJul 21, 2006

By The Nation

Suvarnabhum may not be covered for the test flights which take place next week

Airports of Thailand (AOT) has not yet taken out any insurance coverage for , despite its first "commercial" flights taking place on July 29, say sources.

Consortium, the new airport's contractor, has paid for the only insurance thus far, and that covers only the period of construction.

Dhipaya Insurance and ITO recently sent letters to AOT warning the company that needs property insurance to cover any damage that may occur from third-party contractors, such as those hired by airline companies and work inside the airport but are not covered by ITO's insurance. The sources, speaking on condition of anonymity, said that when the airport opens for the first "commercial" flights on July 29, it would require general liability insurance.

"It's very worrying. For instance, if on the opening date a passenger lights a cigarette and something happens, the contractor's insurance wouldn't cover that, because it is no longer within the construction period. The commercial flights have begun," said the sources.

AOT has argued that the flights planned for that day are test runs and do not constitute commercial flights, and thus the contractor's insurance should cover any accidents that may occur.

However, AOT's official press statement, released on June 20 and still available on its website at, referred to the scheduled flights by Thai Airways International and five other local airlines on July 29 as "the first commercial flights".

The source said Dhipaya and international reinsurers inspected the new airport on June 7 and submitted a letter on July 13 proposing insurance fees and quotes, but AOT has not yet replied.

An executive with Dhipaya, which is partially state-owned, said airlines would provide insurance for their passengers, and as for the airport itself, the contractor had not yet completed and handed over the assets to AOT.

The issues are whether the July 29 flights are commercial, and if there were an accident, who would bear responsibility, AOT or ITO?

Some foreign experts say the July 29 flights should be treated as a routine commercial run, since the airlines are collecting fares from the passengers. But AOT insists that these are test flights, because all revenues derived from them will be donated to His Majesty the King, says the Dhipaya executive.

"Dhipaya is hiring a foreign expert to study the issue, and we're optimistic it will be resolved by July 29," said the executive.

AOT executives did not return calls from The Nation.

Thai Airways plans two flights on July 29: one from Airport to Suvarnabhumi for Bt999 and the other from Chiang Mai to Suvarnabhumi and then on to Phuket for Bt2,999. Five other airlines will also fly on that day: Nok Air, Thai AirAsia, Orient Thai, PB Air and Bangkok Airways.