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Foreign investors pass on ‘small potatoes’ motorway projects
Foreign investors have paid no attention to investing in
the construction of two new Thai government motorway projects worth Bt60
billion (US$1.5 billion) because the total required investment is too small
to interest them, according to the Transport and Traffic Policy and Planning
Office.
The office’s director-general, Maitree Srinarawat, said that Thailand’s
construction of additional motorways is part of a number of state-initiated
mega-infrastructure projects under the supervision of the Highways
Department.
Maitree said the government may need to implement the project by itself,
however, because foreign investors have shown no interest in investing so
far.
Not one foreign investor has asked for more information on investing in
construction of the proposed motorways linking Bangkok to northeastern
Nakhon Ratchasima Province and Cha-um in the upper-southern Petchaburi
Province since information on the project was released.
He said he thought that foreign investors were indifferent to the project
because they believe that construction of roads do not rely on high
technology.
Many also believe that Thailand has the means to undertake the project
itself since it does not require the same high level of investment as
electric train projects, he said.
Regarding progress on the proposed investment in the construction of 10
electric train mass transit routes, Maitree said many potential foreign
investors had sought information on the projects through a website, despite
uncertainty about the country’s political situation. (TNA)
Thailand not broke, says acting Prime Minister Chidchai
Acting Prime Minister Pol. Gen. Chidchai Vanasatidya
dismissed allegations that the Thai government had gone broke and confirmed
that state revenues had been collected up to the targeted amounts.
Gen. Chidchai explained that some budgets may remain untapped by varied
government agencies due to technical snags involving the budding use of the
new Government Fiscal Management Information System (GFMIS).
He said the baht had strengthened due to the inflow of foreign currencies
used in profit-speculating and take-over bids among business circles.
Though export earnings might be adversely affected as a result of the rising
Thai currency, that would only be on a short-term basis, the acting Premier
said.
Meanwhile, the Government’s mega-projects will be shelved indefinitely,
until the next Government has been formed, Gen Chidchai said.
As chair of last Tuesday’s cabinet meeting, Gen. Chidchai reported on the
problem of rising oil prices. The Finance and Energy ministries, as well as
PTT Plc, he said, will adopt measures to help farmers and others relying on
oil-consuming transport systems, and to promote energy-saving measures as
well alternative energy sources in place of petrol. (TNA)
Thailand to help develop quality of rice in Vietnam
Thailand has agreed to help develop the quality of rice
in Vietnam by working out a blueprint for a full-circle management system
for Vietnam’s rice production and sales, which will eventually be used as a
model to boost exports and prices of rice on the world market, according to
the Thai Ministry of Commerce.
Rather than viewing Vietnam as a major competitor, Thailand is choosing to
work cooperatively with the leading nation in Indochina.
The cooperation followed a request by Vietnam’s rice producers and exporters
recently, director-general of the ministry’s Department of Foreign Trade
Rachane Potjanasuntorn told journalists last Friday.
“Thailand’s management of rice trade, from harvests to local sales and
shipments overseas, is recognized by Vietnam,” he said.
Thai delegates comprising of senior officials and representatives of the
private sector, led by Permanent Secretary for Commerce Karun Kittisataporn,
will visit Vietnam in June. Their goal is to meet with their Vietnamese
counterparts to discuss and work on a blueprint, which will detail the
development of Vietnam’s rice harvests, as well as warehouse, sale and
shipment management systems and even solutions to rice trade.
“The blueprint will become a model for expanded cooperation among major rice
exporters in the region, including Vietnam, Thailand, China, India and
Pakistan,” he noted.
“It will eventually also help boost global trade of quality rice and
stabilize rice prices on the world market,” he added.
The first cooperative project among the five major rice exporters is
expected to be a joint shipment of quality rice to the Middle East, a world
major rice importer, according to the department’s chief. (TNA)
Thai rice exports continue to rise this year
Thailand’s rice exports are expected to reach 7.5 million
tons this year, earning the country approximately US$2.3 billion (Bt92
billion), according to a senior Commerce Ministry official.
Rachane Potjanasuntorn, director-general of the Ministry of Commerce’s
Department of Foreign Trade, told journalists last Friday that the country’s
targeted rice exports this year is more or less 200,000 tons higher than the
kingdom’s total rice exports last year.
He said Thailand had exported 1.87 million tons of rice from January 1-April
5, 2006, worth close to US$595 million (Bt23.6 million).
The average price of exported Thai rice is anticipated to be approximately
US$318 per ton (Bt12,720), though the price of Thai Hom Mali or fragrant
‘jasmine’ rice may be higher at approximately US$440-450 per ton
(Bt17,600-18,000), according to Rachane.
Vietnam, Thailand’s main rival as a rice exporter, has set to export roughly
five million tons of rice this year. (TNA)
Public debt in February drops by more than Bt1.9 billion
Thailand’s public debt in February dropped by more than
1.9 billion baht to 3.23 trillion baht, or 41.68 percent of the gross
domestic product (GDP), according to the Public Debt Management Office.
In a report on public debt management, Pannee Sathavarodom, the office’s
director-general, said that the Finance Ministry managed to restructure
offshore loans in March under which outstanding loans and interest burdens
dropped to 7.68 billion baht and 1.08 billion respectively.
At the same time, the ministry issued bonds to compensate for damages
incurred by the Financial Institutions Development Fund (FIDF). Proceeds
from the bond issuing totaled 11.89 billion baht. Of this, 1.39 billion baht
comes from savings bonds and the remaining 10.5 billion from special
government bonds.
In the first six months of the 2006 fiscal year, the government has sought
total loans of 78.91 billion baht.
Of this, 4.96 billion stems from offshore loans sought by state enterprises,
73.95 billion from domestic loans sought by the Finance Ministry (41.04
billion) and by state enterprises (39.91 billion).
Simultaneously, 65.83 billion baht had been set aside from the budget for
repayment of loans plus interest.
FIDF has also redeemed matured bonds worth 20 billion baht.
Of the total 3.23 trillion baht public debt for February, 1.9 trillion baht
were loans directly sought by the government, 1 trillion by non-financial
institution state enterprises, and 333.09 billion by FIDF.
Public debts are categorized into offshore loans (565.05 billion) and local
loans (2.68 trillion), and they are grouped into long-term loans (2.66
trillion) and short-term loans (582.59 billion). (TNA)
Cabinet resolves to postpone deliberation of mega-projects indefinitely
Caretaker Transport Minister Pongsak Rattapongpaisal last
Tuesday revealed that the cabinet resolved to indefinitely postpone the
deliberation of mega-infrastructure projects until the new government is
formed.
He said the cabinet approved the adjournment in presentation of terms of
reference for the implementation of the state-initiated mega-projects
because it wanted to wait for the new government to deal with the matter.
Originally, potential investors were invited to submit the terms of
reference for the project implementation on April 28.
However, Pongsak said the cabinet had instructed each ministry to prioritize
the mega-projects before the new government is formed.
For instance, the implementation of the project on dual-track railways
proposed by the Transport Ministry should be given a top priority because it
could ease transport costs of entrepreneurs significantly.
The minister said the cabinet had also instructed the Energy Ministry to ask
PTT Public Company Limited to sell fuel at a special price to Transport
Company’s and Bangkok Mass Transit Authority’s buses to help reduce their
operation costs. He said he would hold a meeting with the energy minister
and state agencies concerned to come up with a way to assist them. (TNA)
Gasoline prices likely to surge to Bt30 per liter
The price of premium gasoline on the domestic market is
likely to surge to 30 baht per liter if global oil prices continue to
skyrocket, according to an industry executive.
Anusorn Sangnimnuan, president of Bangchak Petroleum Public Company Limited
(Bangchak), said that the current price of premium gasoline is at 28.34 baht
per liter after all oil traders, except PTT Public Company Limited (PTT),
decided to increase the retail price by 0.40 baht last Wednesday. However,
the marketing margin remains in deficit.
Should oil traders set the margin to reflect their actual costs at 1.50 baht
per liter, premium gasoline prices would definitely exceed 30 baht per
liter, Anusorn noted.
Anusorn stated that whether or not fuel prices would be raised further would
depend on the decision made by major oil traders.
He conceded that global oil prices had continued to increase due to concerns
regarding the tension between the United States and Iran and its nuclear
program, as well as unrest in Nigeria. Such unfavorable incidents are
leading to fears that fuel production could decline.
It is also projected that global crude oil prices would continue to increase
throughout this year, particularly in the September-November period of every
year when fuel production capacity often drops, as natural disasters, such
as Hurricanes, normally occur, he said. (TNA)
East Asian investment in Thailand set to double over next five years
East Asian countries’ investment projects in the Thai
economy are expected to double over the next five years, thanks to
strategies of the Ministry of Commerce to attract more investment from the
richer economies into the country.
The ministry’s Department of Foreign Trade aims to attract investment worth
Bt300 billion (US$7.5 billion) in total from the region by 2011, about
double from Bt150 billion (US$3.750 billion) currently invested, according
to the department’s Director-General Rachane Potjanasuntorn.
The target is part of the department’s plan to develop the East Asian region
as a hub for Thailand’s trade and investment, Rachane told journalists. The
East Asian economies include Japan, Korea, China and Taiwan.
“The department will continue to implement strategies to attract more
investment from East Asia despite Thailand’s current political uncertainty,”
Rachane said, speaking in his capacity as the head of the East Asian hub
project.
“East Asian businesses will be particularly invited to invest in Thailand’s
electronic and automobile industries, as well as in the local entertainment
and information technology (IT) sectors,” he added.
Campaigns to attract more joint ventures for Thai small and medium-sized
enterprises (SMEs) and more tourist arrivals from the East Asian region
(from 2 million annually now to approximately 4.8 million) would also be
included in the project, Rachane noted. (TNA)
BOT may allow baht to appreciate to control inflation rates
The Bank of Thailand (BOT) may allow the Thai baht to
strengthen by market mechanism in a bid to control inflation rates,
according to a leading financier.
Supavuth Saicheu, president of Phatra Securities Public Company Limited
Research Division, said that given the current circumstance, it is
justifiable if the central bank let the baht appreciate by market mechanism
to contain rising inflation rates. Supavuth pointed out that the average
inflation rate in Thailand is higher than that of its 21 neighboring
countries and trading partners.
So, it is likely that the BOT will allow the baht to appreciate in the same
direction with other regional currencies, although exports will be affected
to a certain extent.
Should the BOT be able to keep the inflation rate at an appropriate level,
he said, it would not need to raise its interest rates so high. He said
foreign capital inflow into the country, particularly for the Stock Exchange
of Thailand (SET) is another reason behind the strengthening of the Thai
baht. It is likely that foreign investors will soon take profits from their
capital gains in the stock market.
On an economic trend this year, he said, Phatra Securities believed the
country’s economy would grow 4.5 percent, boosted by higher exports in the
second half of this year. Should the exports not expand as predicted, he
said, the Thai economy will not reach its target growth.
Additionally, more people may opt to reduce spending and turn to saving
money, which will lead to a decline in consumption. (TNA)
Growing Japanese economy a mainstay for Thailand
Thailand’s external trade and economy will continue to
grow over the coming years, driven mainly by Japan’s continuing economic
expansion, according to the Kasikorn Research Centre (KRC).
The Japanese economy could emerge from deflation this year and continue to
grow steadily over the coming years with expanding consumption and
investment, the Thai private think tank said last Saturday.
These factors could boost Thai exports to Japan and increase Japanese
investment in Thailand, which would then stimulate Thai economic growth, the
Bangkok-based research house reported.
Japan is not only one of Thailand’s largest trading partners, but also the
top investor in the Thai economy.
Thailand’s first 20 export items to Japan accounted for nearly 56 percent of
the kingdom’s total export value last year.
Major Thai products exported to the Japanese market include IC boards,
computers and parts, camera lenses, natural rubber, automobiles and parts,
electrical equipment and parts, air conditioners, plastic and aluminum
products and raw materials for resource-based industries.
Thailand’s exports to Japan will grow considerably more once Bangkok and
Tokyo sign the Japanese-Thai Economic Partnership pact covering the
establishment of the proposed Thai-Japanese Free Trade Area (FTA) Agreement,
according to the KRC.
Total Thai exports to Japan this year are expected to reach US$17 billion
(Bt680 billion) this year, said the research house. (TNA)
SET joins Asian bourses in capital market development
The Stock Exchange of Thailand (SET) has agreed to join
with the Jakarta Stock Exchange (JSX) and the Korea Exchange (KRX) to
further develop the capital markets of the three countries.
The three bourses signed a memorandum of understanding (MOU) constituting
the agreement at the 25th Asian and Oceanian Stock Exchanges Federation
General Assembly in Taipei, late last week, SET board chairman Vijit Supinit
revealed.
Under the agreement, the three stock markets will exchange information and
cooperate in varied projects to efficiently develop the capital markets of
the three countries.
Cooperative projects to stimulate economic growth of the three nations will
also be jointly implemented, according to the SET board chairman.
“The three stock markets have different strengths,” SET’s Vijit noted. “So,
the agreement will lead to a pool of information and techniques beneficial
to each other and the three national economies.” (TNA)
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