Estate operators seek soft loans, tax relief
Operators of industrial parks have appealed to the government and a state bank for more soft loans, longer debt-repayment terms, and tax deductions as they recover from the flood disaster.
Meanwhile, for its part, the government has intensified its lobbying with global insurers to make sure they keep doing business here.
Lersak Chuladesa, president and chief executive officer of the Government Savings Bank (GSB), said yesterday that industrial parks hit hard by the floods had asked for 15-year loans instead of the seven-year terms approved by the Cabinet previously.
They also want tax deductions on the cost of loan repayments.
The state bank was also asked to extend more soft loans to support manufacturers doing business in the parks, he said.
“Their requests have been sent to Finance Minister Thirachai Phuvanat-naranubala for consideration,” Lersak said. GSB yesterday signed a memorandum of understanding with the Industry Ministry and the Industrial Estate Authority of Thailand to extend Bt15 billion in loans to the estate operators for construction of flood barriers around the parks. The loans were previously approved by the Cabinet with an interest rate of 0.01 per cent per annum and seven-year repayment periods.
Operators of four of the seven inundated parks met with the GSB to discuss the loans, Lersak said. They need to build dykes ranging from 8.5 to 67 kilometres in length to enclose their parks and prevent future flooding.
Bangpa-in Industrial Estate has applied for loans worth of Bt700 million and Rojana Industrial Park has requested Bt6.7 billion, he said. The other two, Nava Nakhon Industrial Park and Bangkadi Industrial Estate, also applied for loans.
“We expect the total loans demanded by industrial-park operators is only half of the Bt15-billion target.”
The Japan International Cooperation Agency will provide technical support for building dykes, he said.
Meanwhile Virabongsa Ramangkura, chief strategist for the flood recovery committee appointed by the government, conceded that international insurers might charge higher premiums for flood coverage in the first year of renewed contracts.
“European insurers have insisted [they will continue] to do business with Thailand,” he said. “But there will be some difficulties in contract renewals in the first year ... premiums will be higher, and after that premiums will fall back when they are confident in the flood-prevention measures put in place by the government.”
Virabongsa said he had just come back from London, where he met with European insurers including Lloyd’s, the world’s largest insurance market.
International reinsurers will not pull their business worth Bt800 billion out of Thailand as they have confidence in the country’s capacity to prevent future disasters, he said. “Flood prevention is on our national agenda, and we have the knowledge, manpower and money to do it,” he insisted.
Virabongsa plans to visit Japan, where he will meet with investors, insurers and high-ranking government officials to explain to them the short-, medium- and long-term flood-prevention measures.
