PTT losses could top B262bn
Bangkok Post 29 October 2009 | Yuthana Praiwan
RAYONG : PTT Plc, the country's largest energy conglomerate, faces potential opportunity losses of 262 billion baht per year due to delays in completing its 25 ongoing projects in Map Ta Phut.
The Petroleum Institute of Thailand, which conducted the review, estimates that PTT's petrochemical business could forego revenues of 181 billion baht a year due to delays in expanding its plants. PTT's oil refinery and gas separation plant face opportunity losses of 59.7 billion baht per year, with another 17.2 billion lost for the steel sector and 8.4 billion for industrial estate projects.
The 25 projects are among 76 at Map Ta Phut at the centre of a legal debate over whether their operating permits are valid under the constitution.
PTT, the country's largest listed company by market capitalisation, has 130 billion baht in investments affected, and faces opportunity losses of 90 billion baht from the delays alone. Other affected companies include Siam Cement, Indorama Polymer and Glow Energy.
Bowon Vongsinudom, a senior executive vice-president of PTT Aromatics and Refinery Plc, said the 76 projects, worth a combined 288 billion baht, would generate 10,000 jobs for the region once completed.
For the PTT Group, 10 out of 25 projects at Map Ta Phut are ready to begin operations, including a sixth gas separation plant. Another nine are awaiting operating permits from the Industrial Works Department. Six are under construction.
"The total cost for the gas separation plant alone is 28.1 billion baht, and this excludes another 4 billion in investments for pollution control systems. This plant will have zero emissions," Mr Bowon said.
He said the potential economic losses were not confined to PTT and other industrial companies in the region. Indirectly affected are numerous other sectors and supply chains in auto parts, electronics, packaging, textiles, construction materials and logistics.
"We also have financial institutions that have expressed serious concerns over the issue. The creditors will also feel some impact from the delay," he said.
He criticised environmental activists who have fought to suspend industrial operations in Map Ta Phut.
"It seems like [opponents] only intend to release some information that no one can really say whether it is true or not," he said. "Their requests are also narrow-minded. The private sector has made its best efforts to follow environmental standards. Yet they are not satisfied."
Environmental activists argue that decades of industrial growth and development in Map Ta Phut and the Eastern Seaboard have taken a heavy toll on water and air quality and present health risks for residents.
The Administrative Court on Sept 29 ordered all 76 projects to halt operations pending questions on whether state agencies followed Section 67 of the 2007 Constitution in approving their permits.
Section 67 stipulates that those involved in any activities that could have a severe impact on the people must conduct health and environmental impact studies, public hearings and face a review by an independent body.
The Industry Ministry, PTT and Siam Cement have filed an appeal. All 76 projects may continue operations pending the outcome.
Charoenchai Prathuangsuksri, chairman of the Federation of Thai Industries in Rayong and an executive of Siam Cement, said 21 new SCG petrochemical plants were also affected.
He said the group had invested 20 billion baht for environmental management systems related to the projects.
Phirawat Rungroengsri, director of the Map Ta Phut Industrial Estate, blasted the environmental group Greenpeace for criticising local environmental standards.
"Our standards in some areas are better than those used in developed countries such as Japan and the UK," he said.