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Government to pay huge compensation if contracts fail

PM proposes speedy opening of ASEAN-China Free Trade Area

Indonesian business persons seek cooperation from Thai private sector

NPLs in banking sector drop to 11.49% in December

KTB: Capital write-down waiver proposed

Multi-faceted aid promised for Afghanistan

Government to pay huge compensation if contracts fail

The Thai government could find itself paying an enormous amount of compensation of six billion baht if it fails the contracts signed for a power plant construction project in Prachuap Khiri Khan’s Bor Nok district. But the company’s five shareholders still want to proceed on in the plant’s project, since they feel the contracts are in order and the project is still viable.

They trust that the Thai government can negotiate with the power plant’s opposing groups and hope its decision will not decrease foreign investors’ confidence in Thailand. Thailand will need to increase its capacity for power in the future, particularly in the provinces.

But if the contracts are to be cancelled, the Electricity Generating Authority of Thailand (EGAT) would have to compensate Union Development Co. for no less than six billion baht. The compensation is calculated from the already invested amount of 80 million US dollars plus an investment loss value.

Union Development Co. Ltd. insists that the contracts made with EGAT have been transparent and are open for inspections. Both sides have carefully considered before signings the contracts, made under an international New York law, and the Thai Supreme Prosecutor has also inked. Copies of the contracts have been submitted to Thailand’s upper House committee as requested to stay inside the boundaries of transparency. (TNA)


PM proposes speedy opening of ASEAN-China Free Trade Area

Prime Minister Thaksin Shinawatra has proposed that the Association of Southeast Asian Nations (ASEAN) accelerate steps so that a planned free trade area between ASEAN and China will be implemented ahead of schedule. The Premier raised the proposal when he paid a courtesy call on Rodolfo Severino, ASEAN’s Secretary General, at the ASEAN Secretariat in Jakarta recently.

ASEAN and China reached a landmark agreement on the establishment of the ASEAN-China Free Trade Area at a recent ASEAN summit in Brunei. They initially agreed that the planned free trade area be set up over the next 10 years.

Thaksin proposed that ASEAN member countries and China cooperate more closely in exchange of information through an on-line network, called E-ASEAN, which could be set up to help achieve the goal of the earlier implementation of the ASEAN-China Free Trade Area.

Severino praised Thailand’s continued cooperation and commitment with ASEAN, particularly in attempts to address drugs problems in the region and to crack down terrorist rings, as well as to speedily implement the ASEAN Free Trade Area (AFTA). He also suggested that governments of ASEAN member countries assist and support their people so that they will be able to earn more incomes on their own, and not have to depend on allocated funds from the governments.

Severino was asked be a coordinator to invite ASEAN ministers for a meeting to be hosted by Thailand, aimed to reduce the gap between old and new members of ASEAN. ASEAN now groups Brunei, Indonesia, Malaysia, the Philippines, Singapore, Thailand, Cambodia, Laos, Myanmar and Vietnam, the latter four of which are new members. (TNA)


Indonesian business persons seek cooperation from Thai private sector

During an official two-day visit to Jakarta by Prime Minister Taksin Shinawatra, the Indonesian business community expressed interest in the economic measures which the Thai government is using to stimulate Thailand’s economy.

During the breakfast meetings held on January 17 and 18, Indonesian business people, including some who are already joined in business relationships with Thais, revealed they are increasingly interested in promoting more investment projects in the Thai private sector.

When asked about the economic measures and policies which the Thai government is using to stimulate the Thai economy, Taksin said a key factor to progress in the country’s rehabilitation was political reform, which left more time for government to deal with economic issues.

He said the Thai government is also implementing measures to stimulate domestic demand and spending which regenerate the economic climate by creating more income for individuals apart from the traditional methods of export, tourist promotion, and investment through incentives.

He said that he applied his personal experiences as a businessman to the administration and management of national policies and measures which are based on societal, not individual benefits. He added that precise information is also a vital factor. (TNA)


NPLs in banking sector drop to 11.49% in December

Non-performing loans held by all commercial banks in December last year dropped to 441.94 billion baht or 11.49% of the outstanding loans from 512.17 billion or 13.25% in November, according to the Bank of Thailand.

The decline in the NPLs was attributed to the transfer of bad debts to Thai Asset Management Corporation and greater efforts by most banks to solve the problem. NPLs held by private-owned banks edged down to 370.47 billion baht or 14.43% of the outstanding loans from 438.44 billion or 16.75%. Those held by state-owned banks decreased to 71.46 billion baht or 5.59% from 83.73 billion or 6.55%.

NPLs held by Bangkok Bank declined to 106.1 billion baht (14.71%) from 112.59 billion (15.42%), Thai Farmers Bank to 62.72 billion (13.1%) from 63.9 billion (13.32), Bank of Ayudhya to 56.92 billion (16.58%) from 66.11 billion (19.52%), DBS Thai Danu to 4.46 billion (5.87%) from 4.91 billion (6.45%), Thai Military Bank to 33.53 billion (12.28%) from 56.54 billion (20.5%), and Siam Commercial Bank to 84.92 billion (18.5%) from 99.96 billion (21.46%).

NPLs held by UOB Rattanasin edged up 407 million baht or 0.85% of the outstanding loans from 358 million or 0.74%, Standard Chartered Nakornthon increased to 1.33 billion (2.11%) from 1.18 billion (2.03%), Bank of Asia decreased to 20.16 billion (18.29%) from 22.85 billion (20.27%), Krung Thai rose to 64.65 billion (8.19%) from 54.67 billion (7.13%), BankThai declined to 4.42 billion (3.19%) from 4.66 billion (3.25%), Siam City Bank dropped to 146 million or (0.7) from 4.89 billion or (2.34%), and Bangkok Metropolitan Bank decreased to 2.24 billion (1.59%) from 19.5 billion (12.2%). (TNA)


KTB: Capital write-down waiver proposed

Krung Thai Bank (KTB) has proposed the Financial Institutions Development Fund (FIDF) to allow the bank to write down its registered capital and to refrain from exercising warrants, with the aim to clean the bank’s balance sheet.

Bank president Viroj Nualkhair said the bank was waiting for an answer from the rescue fund and if it insisted to exercise its right, it would have to discuss KTB’s privatization plan again. The planned registered capital write-down is to write off the state-run bank’s accumulated loss in a bid to attract investors to subscribe for the bank’s shares to be allocated to the public as part of the privatization plan.

The FIDF controls the largest stake in KTB at around 80 per cent and it has planned to sell KTB’s shares to the public by the fourth quarter of this year to brining down the government’s holding to below 50 percent. (TNA)


Multi-faceted aid promised for Afghanistan

In its assistance to war-torn Afghanistan, Thailand will adhere to His Majesty the King’s “Sufficiency Economy” philosophy, linking peace-keeping and sustainable development, Foreign Minister Surakiart Sathirathai told an international conference on Afghanistan in Tokyo.

Thailand’s participation was not confined to security operations but would also promote self sufficient and sustainable development among local communities, Surakiart told the conference. The foreign minister was speaking at the International Conference on Reconstruction Assistance to Afghanistan, which ended yesterday. Participants included Hamid Karzai, chairman of the interim administration of Afghanistan, and UN Secretary-General Kofi.

Surakiart said Bangkok would participate in the rehabilitation of Afghanistan by dispatching a military engineer task force, which would include field and construction engineers and de-mining experts. Teams of military medical officers will also be sent to the country. (TNA)



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