SATURDAY, March 02, 2024

EEC Phase 2 aims to attract 500 billion baht in new investment

EEC Phase 2 aims to attract 500 billion baht in new investment

The Thai government is accelerating the development of the 2nd phase of the Eastern Economic Corridor (EEC) and will propose it to the Cabinet for approval this month.

The proposal aims to attract 500 billion baht in new investments over the next 5 years, advancing the development of an additional 77 infrastructure projects worth a total of 337 billion baht.

The Eastern Economic Corridor (EEC) project, which has been the flagship of Thailand’s plans for economic development, was reinforced during the administration of former prime minister Prayut Chan-o-cha.

During the 3rd meeting of the Eastern Economic Corridor Office of Thailand (EECO) on November 24, the chairman, Deputy Prime Minister and Commerce Minister Phumtham Wechayacha, approved the draft master plan for the development of the Eastern Economic Corridor (2023-2027). This plan serves as the main operational framework for the EEC, aiming to integrate various units for territorial development in all dimensions: economic, social, and environmental.

This marks the continuation of the EEC development from Phase 1 (2017–2022), which had already approved investments of around 2 trillion baht. Following discussions in the meeting, various agencies will now draft operational plans and activities, along with requesting budget allocations for reconsideration in January 2024.

The actual investment target is set at 500 billion baht. EEC Secretary-General Chula Sukmanop revealed that in the recent EEC board meeting, the draft master plan for the development of the Eastern Economic Corridor (2023-2027) was approved to inform relevant agencies and initiate the drafting of operational plans and activities.

According to the Public Relations Department, the draft master plan for the development of the Eastern Economic Corridor (2023-2027) aims to create an operational plan to drive actual investments in the EEC Phase 2. The target is to achieve approximately 5 trillion baht over a 5-year period or an average of 1 trillion baht per year.

This initiative aims to contribute to the expansion of gross provincial cluster product (GPCP) by an average of 6.3% and improve the human achievement index in areas such as livelihoods and the economy by an average of 2%.

In 2021, the EEC’s GPCP figure amounted to 2.36 trillion baht, representing 14.6% of the country's Gross Domestic Product (GDP). Prior to the Covid-19 pandemic, the EEC economy had continuously grown at an average rate of 2.1% annually, mainly driven by the industrial and service sectors.

To achieve these goals, 5 pathways have been identified, comprising:

1. Promoting targeted industrial and future service investments, targeting an annual value of benefits of 250 billion baht, increasing the number of targeted industrial factories by 3.5% annually. The proportion of small and medium-sized (SME) enterprises’ revenue in the targeted industries to the GDP in the EEC will not be less than 7% per year. Additionally, the number of SME entrepreneurs in targeted industries will increase by 3.5% annually.

2. Enhancing the efficiency and utilisation of infrastructure and public utility systems, aiming for major infrastructure development success, such as completing the high-speed rail projects connecting 3 airports and the development of U-Tapao Airport, reaching over 90% completion by 2027. The construction of Laem Chabang Port's Phase 3 F1 Terminal will also be completed by 2027.

Meanwhile, the construction of the Mab Ta Phut Industrial Port’s Phase 3, Section 1, will be completed by 2026, increasing rail cargo transportation by 5% annually, generating at least 5% of electricity from clean energy by 2027, and meeting the water demand of 2.89 million cubic meters by 2027.

3. Elevating workforce skills for technological changes and innovations, targeting a 2.5% increase in labour productivity annually, maintaining an average unemployment rate of not more than 0.83% per year, and developing skilled labour according to industry needs by at least 20,000 people annually.

4. Developing modern, livable, and occupationally suitable cities, aiming to develop new and existing cities according to plans, reducing the average rate of transferring patients out of the area by 10% per year, decreasing greenhouse gas emissions by 20% by 2027 compared to the baseline, and ensuring at least 15% of recycled waste utilisation per year.

5. Linking investment benefits to sustainable community development, targeting an average household income increase of not less than 5% per year.

Advancing infrastructure development

Reports indicate that the development plan for infrastructure supporting EEC development between 2023-2027 has already gained the Cabinet’s approval on 3 strategies:

1. Improving railway and water transportation systems and connecting other cargo transportation modes

2. Elevating secondary transportation networks to support seamless public travel.

3. Enhancing transportation networks with proactive measures and modern technology.

This involves executing 77 infrastructure projects in transportation, totaling 337.80 billion baht. It comprises 29 projects initiated in 2023 with a budget of 125.60 billion baht and 48 projects to be conducted between 2023-2027, costing 212.20 billion baht.

For the projects outlined in the Operational Plan 2023-2027, the allocation includes public investment from state budgets, loans, and state enterprise budgets for 61 projects, totalling 178.58 billion baht (52.87%) and private sector investments and joint public-private ventures for 16 projects, totalling 159.22 billion baht (47.13%).

This investment in infrastructure consists of 295.71 billion baht (87.5%) for infrastructure and 38.38 billion baht (11.4%) for public utility systems, with promotion measures at 3.70 billion baht (1.1%).

No plan to expand the provincial area in Phase 2 has been drawn up as yet. Such expansion would require additional legislation or royal decrees, as the current law dictates that the EEC operates within the original 3-province area, comprising Chonburi, Rayong, and Chachoengsao.