IEAT seeks anti-flooding financing

he Industrial Estate Authority of Thailand (IEAT) has been tasked with finding the best method of financing industrial estates' flood-prevention infrastructure, following the Finance Ministry's rejection of a plan to draw funds from the government's insurance pool.

The Industry Ministry earlier planned to finance two-thirds of the cost using funds from the insurance pool, with estate operators taking out soft loans from the Government Savings Bank (GSB) for the rest. The GSB charges 0.01 per cent on the loans for a seven-year term.
Industry Minister MR Pongsvas Svasti said yesterday that as all the estates are privately owned, there must be a mechanism to help them through the IEAT. For example, the IEAT may have to temporarily assume ownership of the infrastructure to make it eligible for financing. Meanwhile, the Finance Ministry would be asked to extend the GSB loan term to 15 years, to help ease the operators' financial burden.
Yesterday, the Cabinet acknowledged the construction plans of six of seven inundated industrial estates, which are slated for completion this year. The exception is Factory Land.
Bangpa-in Industrial Estate will require Bt728 million for an 11-km floodwall, to be completed end-July; Bangkadi Industrial Park Bt272 million for an 8.5-km wall, completed end-February; Rojana Industrial Park Bt2.2 billion for a 77.6-km wall, completed end-September; Hi-Tech Industrial Estate Bt500 million for a 13-km wall, completed end-August; Nava Nakorn Industrial Estate Bt700 million for an 18-km wall, completed end-August; and Saha Rattana Nakorn Industrial Estate Bt400 million for a 13-km wall, completed end-August.
Nipit Arunvongse na Ayudhya, managing director of Nava Nakorn Industrial Estate, said that despite the unclear financing plan, all industrial estate operators have to proceed with construction to complete the walls before the next rainy season. Nava Nakorn's wall is 5.8 metres high.
"We can't wait. But we hope the government will finalise the financing plan, to help relieve our burden," he said.
Pongsvas believed these efforts would keep Thailand attractive to foreign investors, as flood-hit manufacturers have gradually recovered.
Echoing this, Masami Iijima, president of Mitsui & Co - one of Japan's giant conglomerates - yesterday expressed confidence in Thailand and vowed to maintain its investments in the Kingdom, particularly in the energy sector. He believed Thailand would recover from the flood impacts soon, and said this encouraged the group to expand its investments, particularly in alternative energy. A total of 51 units of Mitsui are in Thailand, operating in the export-import and manufacturing businesses. Its manufactured goods include steel and machinery.
According to the Industry Ministry, as of yesterdayFebruary 13, around 40 per cent of 838 flood-hit companies have resumed operations. The ministry expects 70-80 per cent of them to restart production by the end of the first quarter.
Nipit however noted that his company last month signed land-sale contracts with only four investors. Of 227 manufacturing plants at the Pathum Thani industrial estate with combined investment of Bt200 billion, nine were closed. Of the total, 102 plants belong to Japanese investors.
Kanit Muangkrajang, vice president of Toshiba Thailand, which operates nine plants at Bangkadi Industrial Park, said that as of February 10, only four of 36 companies that showed total flood-related losses of Bt62 billion have resumed normal operations. Twelve companies have been able to restart operations, but not at full capacity. Five plan to restart production in February or March. Six plants expect to resume operations in April-June, and one will restart in October-September. Six companies have no concrete resumption plans, and two decided to shut down their operations.

VIEW SOURCE FROM http://www.nationmultimedia.com/business/IEAT-seeks-anti-flooding-financing-30175799.html