EARTH Thailand

PM sees environmental rules paving way for new industrial landscape

The Nation 18 December 2009

Prime Minister Abhisit Vejjajiva yesterday reiterated his wish to have new environmental rules ready by year-end, saying if the Map Ta Phut crisis could be resolved satisfactorily, it would pave the way for a new industrial-development landscape in Thailand.

Speaking to reporters prior to leaving for Copenhagen for the UN Framework Convention on Climate Change (UNFCCC), he said he expected all information on the Map Ta Phut issue to be ready for Cabinet consideration this coming Tuesday.

"We're concerned about those projects that have been operational or under construction. The investigation of their possible impacts, which would be submitted to the court, could lead to clarification of how these projects should proceed," he said.

The premier also urged all private companies involved to inform government agencies about their projects' investment status.

At the meeting of economic ministers on Wednesday, it was decided the Industry and Energy ministries should hold urgent discussions with the owners of each of the 65 suspended projects about their latest status.

Deputy Prime Minister Korbsak Sabhavasu was also assigned to work with the four-party panel, chaired by former PM Anand Panyarachun, in speeding up the resolution of complex legal issues.Initial data showed 10 projects with a combined investment of Bt29.4 billion had been operational at the time of their suspension, while 29 projects worth Bt180.87 billion were under construction.

Eighteen projects with an investment of Bt26.67 billion were awaiting operating licences, while the remainder - worth Bt13.12 billion - had not yet applied for licences or had unclear status.

According to a government document obtained by The Nation, among the suspended operational projects are Thai Polycarbonate's expansion phase, the Hemaraj Eastern Industrial Estate in Map Ta Phut, the expansion phase of the Hemaraj Eastern Industrial Estate in Pluak Daeng district, PTT Phenol's upgrade and Siam Mitsui PTA's capacity expansion.

Operational projects

- The list of projects which are now operational, according to a government data obtained by The Nation.


1. Siam Mitsui PTA/3rd PTA,CTA production line

2. Thai Polycarbonate/polycarbonate expansion

3. IEAT and Eastern Industrial Estate/ Extended part of Hemaraj Industrial Estate in Pluak Dang district

4. PTT Phenol/plant upgrade

5. IEAT and Eastern Industrial Estate/Eastern Industrial Estate in Map Ta Phut district

6. IEAT and IRL 1996/IRL Industrial Estate

7. Blue Scope Steel (Thailand)/Enlargement of cold-rolled and galvanised steel manufacturing area

8. Aromatics (Thailand)/Natural gas pipeline to link PTT Utility-Aromatics (Thailand)-Map Ta Phut Olefins

9. Styrene Monomer-Siam Polyethylene-Rayong Olefins/Petrochemical pipeline

Source: The Nation

Abhisit yesterday said the National Economic and Social Development Board was concerned that if the Map Ta Phut impasse remained unsolved, it would be difficult to clear environmental disputes at other locations.

He added that industrial development in Map Ta Phut should continue but with due care and attention to the environment. This would reveal the new face of Thailand's industrial development.

Energy Minister Wannarat Charnnukul, who is accompanying Abhisit to the UNFCCC, yesterday said the Energy Policy and Planning Office had been assigned to summarise the impact of the Map Ta Phut injunction on energy projects and suggest solutions to ease upcoming problems, particularly the shortage of liquefied petroleum gas (LPG) and the Oil Fund's financial status.

He insisted the Oil Fund should not operate at a loss, as that would mean conventional oil consumers shouldering the burden.

He said if necessary, the LPG price could be increased ahead of the August 2010 schedule."The government honours the court's order [suspending 65 projects], but we must be prepared for chain effects. LPG next year should cost more than US$700 [Bt23,300] per tonne, in line with oil prices," Wannarat said.

The Energy Ministry earlier revealed that as PTT's sixth gas-separation plant could not come on stream next month as planned, monthly imports of LPG could increase to 100,000 tonnes.

As the domestic LPG price is fixed lower than the market price, the Oil Fund is expected to shoulder additional subsidies of Bt16 billion next year.

Chainoi Puankosoom, CEO and president of PTT Aromatics and Refining, said private companies were ready to invest more on environmental grounds, in line with Article 67 (2) of the Constitution.

He said construction of most of the 65 suspended projects was 50-100-per-cent complete, adding that suspension of further construction work would not ease pollution problems - but more investment in better tools and equipment would do so.

However, the government must rush to establish new rules as specified by the Constitution, he said.

"Private companies are concerned that legal clarity will not be seen within 12 months, due to the lengthy process involved. There should be a special framework to allow these companies to proceed earlier than that," Chainoi said.

He is concerned about the effect on downstream plants - mostly small and medium-sized enterprises - that are reliant on some of the suspended projects for raw-material supplies. At present, they have to import plastic pellets for manufacturing and would have to shut down if this source of supply were to do dry up.

The Federation of Thai Industries is collaborating with the government and the four-party panel, said Dusit Nontanakorn, chairman of the Thai Chamber of Commerce.

He stressed the private sector desperately wanted the Map Ta Phut issue to be resolved within four or five months, as any further delay would put even more pressure on the investment outlook.

"We're principally concerned with the domestic problems of political turbulence and Map Ta Phut, as they could have a long-term economic impact. The government must end this problem [Map Ta Phut] soon, as if it continued for more than a year, it could affect confidence over the next five to 10 years. If new investment disappeared, the economy could stagnate," Dusit said.