EARTH Thailand

Cabinet scrambles over Map Ta Phut

Bangkok Post 03 December 2009  

Court ruling keeps 65 projects on hold

Cabinet members will meet urgently today after a court ruling kept in place a suspension order for 65 high-value projects at the Map Ta Phut industrial estate in Rayong.

The projects are worth billions of baht in investment and export earnings but will remain shuttered pending a full hearing into whether they comply with the constitution, the Supreme Administrative Court ruled yesterday.

As the Federation of Thai Industries warned that billions of baht in potential investment could now move offshore, the government said it would speed up attempts to find ways for all the stalled projects to move forward.

Prime Minister Abhisit Vejjajiva and members of his cabinet would meet today to discuss the implications of the court's ruling, Finance Minister Korn Chatikavanij said.

The meeting was called after the court's decision to allow only 11 projects to go ahead, while 65 others will remain frozen temporarily pending the full court hearing.

"The 65 projects will need to comply with Section 67(2) of the constitution," Mr Korn said.

"In any case, the country needs these projects to move forward."

Mr Abhisit said the ruling helped clarify the situation for investors. He hoped a panel chaired by former prime minister Anand Panyarachun representing environmentalists, businesses and rural communities would quickly develop a framework to meet the terms required under Section 67 of the charter.

The section requires projects affecting the health or environment of a community to conduct impact studies, hold public hearings and seek suggestions from an independent organisation before being allowed to proceed.

The panel will find a solution to the problem in the absence of this independent organisation, which has not yet been set up.

Mr Anand said the panel expected to finalise a blueprint for the independent body in the next two weeks.

Charl Kengchon, managing director of Kasikorn Research, said the ruling helped dispel some of the uncertainties over new investment projects.

"Even though 65 projects will remain suspended, things are at least clear for what is needed now. It will take time, but the path is clear," Mr Charl said.

Tanit Sorat, a vice-chairman of the Federation of Thai Industries, said the case could affect investment trends and economic growth for next year.

"Foreign investors had been planning to invest 200 billion-300 billion baht next year in the petrochemical and steel industries. Now they might shift to neighbouring countries like Cambodia and Vietnam," he warned.

Companies affected by the ruling include the PTT Group, Siam Cement Group , BlueScope Steel, Bayer and Aditya Birla Chemicals.

Auttapol Rerkpiboon, an executive vice-president for PTT Plc, said the company would push forward with its investment plans.

One of the 11 projects allowed to proceed is PTT's 26 billion baht gas separation plant. PTT and its subsidiaries have 24 projects in the Map Ta Phut area, valued at more than 130 billion baht.

'PTT estimates it may need to import over a million tonnes of LPG in 2010 to meet growing demand.

Roongrote Rangsiyopash, vice-president of SCG, said the company would work with the Anand panel to come up with a solution acceptable to all sides. The court said two SCG projects could proceed but 18 with a total investment of 57.5 billion baht could not.

Yo Jitsukata, president of the Japanese Chamber of Commerce, said the ruling was disappointing. "I wonder how the government will react to this outcome, which is unfortunate for investors," he said. "A lot of money will be lost if these projects have to stop."