Pledge of extra funding for boost in efficiency

Finance Minister Thirachai Phuvanatnaranubala promised extra funds to boost water-management efficiency after the Cabinet endorsed increasing the 2012 budget deficit by Bt50 billion to finance post-flood reconstruction. 

Meanwhile, more listed companies have shut down their operations because of the flood disaster.

Thirachai said an executive decree would be drafted to specify investment projects and funding amounts clearly. 

“The extra deficit should be used for investment to boost the economy ... The investment is worthwhile as a lack of good water-management policies to maintain investor confidence would be a major problem for Thailand and disrupt our development process,” he said.

The Cabinet decision will increase the 2012 deficit to Bt400 billion, which is 3.4 per cent of gross domestic product. The government has estimated that in the 2012 fiscal year, its expenditure will total Bt2.38 trillion against revenue of Bt1.98 trillion.

The Cabinet also approved a Bt6-billion budget under the SML (small, medium and large community development) Project to create jobs in flood-hit areas. 

Deputy Government Spokeswoman Anuttama Amornwiwat said that while Bt80 million was for operating costs, the remaining Bt5.29 billion would be distributed to 156,310 villages – Bt300,000 each for 7,850 small villages, Bt400,000 each for 6,650 medium-sized villages and Bt500,000 each for 1,810 large villages.

Federation of Thai Industries (FTI) chairman Payungsak Chartsutipol said after a meeting with manufacturers that it was necessary for the government to protect currently flood-free areas in eastern parts of Greater Bangkok – Lat Krabang, Anyathani, Bang Chan, Bang Phli and Bang Poo. 

Some plants in Lat Krabang Industrial Estate, which has 231 factories mainly in the electronics and auto-parts industries and 48,000 workers, have stopped operations. 

The FTI will soon submit an eight-point proposal to the government, which includes a Bt50-billion support fund and a delay in the minimum-wage hike by seven or eight months from April 2012. 

Bank of Thailand Deputy Governor Krirk Vanikkul yesterday offered assurance that the banking system would not be affected financially, though nearly 1,000 factories are inundated, sparking fear among financial institutions over loan losses. The factories in five inundated industrial estates accounted for only 0.74 per cent of outstanding loans, while the situation remained normal for household and agricultural-sector debts. 

“It’s just a temporary hiccup,” Krirk said.

Moreover, financial institutions are launching packages to help affected clients, mainly through debt moratoriums, debt rescheduling, and new loan extensions.

Thirachai plans to meet with the Thai Bankers Association to plead for more help. He said it was disappointing that despite debt rescheduling, borrowers are subject to the old interest rates.

Commerce Minister Kittiratt Na-Ranong yesterday expressed concern that the flood crisis was seriously damaging the Kingdom’s export sector. It will create serious problems for exporters and affect gross domestic product. 

Kittiratt yesterday met with Apisak Tantivorawong, president of Krungthai Bank, to discuss a financial package designed to help affected manufacturers. However, Apisak provided no details, saying commercial banks were discussing the details of the assistance measures, which take the form of soft loans.

Meanwhile, the Board of Investment Office will propose to Prime Minister Yingluck Shinawatra this week that she agree to postpone the BoI Fair 2011 to early next year. 

 

BoI Fair postponed   

Atchaka Sribunruang, secretary-general of the office, said the BoI Fair committee has agreed it should be postponed to January 5-20, still held at Muang Thong Thani. 

BoI staff and private firms are jointly constructing barriers to protect some pavilions for the fair that are 60-70 per cent complete. 

In a statement to the Stock Exchange of Thailand, Siam Makro said its branches in Ayutthaya, Nakhon Sawan and Lop Buri were open as usual despite the floods. However, it has closed operations of its distribution centre and two rented cold-storage facilities in Wang Noi. All risk insurance is in place, it said.

Ticon Industrial Connection announced that its nine factories totalling 22,950 square metres in Nava Nakorn Industrial Estate and 12 warehouses with 80,871sqm in Ticon Logistics Park, Wang Noi, had been affected by flooding and this would cost Bt10.6 million in monthly revenue or 13 per cent of total rental income.

BBL Asset Management Co, the manager of TPark Logistics Property Fund, said the fund’s five warehouses in Wang Noi with about 34,106sqm were damaged. Those warehouses generate about Bt7.96 million per month, about 38.25 per cent of total rental income. The remaining warehouses of the fund are in Chachoengsao and Chon Buri.

Meanwhile, Ticon Property Fund’s 14 factories in Pathum Thani are damaged, costing the fund Bt5.25 million in monthly revenue or 6.8 per cent of total rental income.

Amid the bad news, Malee Sampran announced that the company and subsidiaries’ plants in Pathum Thani and Nakhon Pathom remained safe from the floods.

Symphony Communication has installed closed-circuit TV cameras to report live flood updates for broadcast on facebook.com/fb.symphony. Network services are suspended in four heavily flooded industrial estates – Rojana, Hi-Tech, Bang Pa-in and Nava Nakorn – but remain normal in other areas. Loss of monthly revenue is estimated at less than 3 per cent, but it has insurance against damage of network equipment and nodes.

CI Group has suspended operations at its factory in Pathum Thani. Water is seeping through the factory walls, causing partial flooding inside, despite the installation of pumps and flood barriers. It reports adequate insurance against flood damage.

Rockworth Plc also temporarily closed its factory in Bang Pa-in Industrial Estate, as floods submerged the first floor. Customers have been notified of delayed shipments. The company also reported insurance against property and flood damage. 

Rich Asia Steel subsidiary Thai National Product Co also suspended operations yesterday until tomorrow as floods prevent the transport of finished goods and raw materials from its plant in Sai Noi district, Nonthaburi. The factory itself has not been affected by flooding.

Thai OPP on Monday shut down its plant in Lat Krabang Industrial Estate but its factory in Wellgrow Industrial Estate is not affected.