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Government to pay huge compensation if contracts fail
The Thai government could find itself paying an
enormous amount of compensation of six billion baht if it fails the
contracts signed for a power plant construction project in Prachuap Khiri
Khan’s Bor Nok district. But the company’s five shareholders still
want to proceed on in the plant’s project, since they feel the contracts
are in order and the project is still viable.
They trust that the Thai government can negotiate with
the power plant’s opposing groups and hope its decision will not
decrease foreign investors’ confidence in Thailand. Thailand will need
to increase its capacity for power in the future, particularly in the
provinces.
But if the contracts are to be cancelled, the
Electricity Generating Authority of Thailand (EGAT) would have to
compensate Union Development Co. for no less than six billion baht. The
compensation is calculated from the already invested amount of 80 million
US dollars plus an investment loss value.
Union Development Co. Ltd. insists that the contracts
made with EGAT have been transparent and are open for inspections. Both
sides have carefully considered before signings the contracts, made under
an international New York law, and the Thai Supreme Prosecutor has also
inked. Copies of the contracts have been submitted to Thailand’s upper
House committee as requested to stay inside the boundaries of
transparency. (TNA)
PM proposes speedy opening of ASEAN-China Free Trade Area
Prime Minister Thaksin Shinawatra has proposed that the
Association of Southeast Asian Nations (ASEAN) accelerate steps so that a
planned free trade area between ASEAN and China will be implemented ahead
of schedule. The Premier raised the proposal when he paid a courtesy call
on Rodolfo Severino, ASEAN’s Secretary General, at the ASEAN Secretariat
in Jakarta recently.
ASEAN and China reached a landmark agreement on the
establishment of the ASEAN-China Free Trade Area at a recent ASEAN summit
in Brunei. They initially agreed that the planned free trade area be set
up over the next 10 years.
Thaksin proposed that ASEAN member countries and China
cooperate more closely in exchange of information through an on-line
network, called E-ASEAN, which could be set up to help achieve the goal of
the earlier implementation of the ASEAN-China Free Trade Area.
Severino praised Thailand’s continued cooperation and
commitment with ASEAN, particularly in attempts to address drugs problems
in the region and to crack down terrorist rings, as well as to speedily
implement the ASEAN Free Trade Area (AFTA). He also suggested that
governments of ASEAN member countries assist and support their people so
that they will be able to earn more incomes on their own, and not have to
depend on allocated funds from the governments.
Severino was asked be a coordinator to invite ASEAN
ministers for a meeting to be hosted by Thailand, aimed to reduce the gap
between old and new members of ASEAN. ASEAN now groups Brunei, Indonesia,
Malaysia, the Philippines, Singapore, Thailand, Cambodia, Laos, Myanmar
and Vietnam, the latter four of which are new members. (TNA)
Indonesian business persons seek cooperation from Thai private sector
During an official two-day visit to Jakarta by Prime
Minister Taksin Shinawatra, the Indonesian business community expressed
interest in the economic measures which the Thai government is using to
stimulate Thailand’s economy.
During the breakfast meetings held on January 17 and
18, Indonesian business people, including some who are already joined in
business relationships with Thais, revealed they are increasingly
interested in promoting more investment projects in the Thai private
sector.
When asked about the economic measures and policies
which the Thai government is using to stimulate the Thai economy, Taksin
said a key factor to progress in the country’s rehabilitation was
political reform, which left more time for government to deal with
economic issues.
He said the Thai government is also implementing
measures to stimulate domestic demand and spending which regenerate the
economic climate by creating more income for individuals apart from the
traditional methods of export, tourist promotion, and investment through
incentives.
He said that he applied his personal experiences as a
businessman to the administration and management of national policies and
measures which are based on societal, not individual benefits. He added
that precise information is also a vital factor. (TNA)
NPLs in banking sector drop to 11.49% in December
Non-performing loans held by all commercial banks in
December last year dropped to 441.94 billion baht or 11.49% of the
outstanding loans from 512.17 billion or 13.25% in November, according to
the Bank of Thailand.
The decline in the NPLs was attributed to the transfer
of bad debts to Thai Asset Management Corporation and greater efforts by
most banks to solve the problem. NPLs held by private-owned banks edged
down to 370.47 billion baht or 14.43% of the outstanding loans from 438.44
billion or 16.75%. Those held by state-owned banks decreased to 71.46
billion baht or 5.59% from 83.73 billion or 6.55%.
NPLs held by Bangkok Bank declined to 106.1 billion
baht (14.71%) from 112.59 billion (15.42%), Thai Farmers Bank to 62.72
billion (13.1%) from 63.9 billion (13.32), Bank of Ayudhya to 56.92
billion (16.58%) from 66.11 billion (19.52%), DBS Thai Danu to 4.46
billion (5.87%) from 4.91 billion (6.45%), Thai Military Bank to 33.53
billion (12.28%) from 56.54 billion (20.5%), and Siam Commercial Bank to
84.92 billion (18.5%) from 99.96 billion (21.46%).
NPLs held by UOB Rattanasin edged up 407 million baht
or 0.85% of the outstanding loans from 358 million or 0.74%, Standard
Chartered Nakornthon increased to 1.33 billion (2.11%) from 1.18 billion
(2.03%), Bank of Asia decreased to 20.16 billion (18.29%) from 22.85
billion (20.27%), Krung Thai rose to 64.65 billion (8.19%) from 54.67
billion (7.13%), BankThai declined to 4.42 billion (3.19%) from 4.66
billion (3.25%), Siam City Bank dropped to 146 million or (0.7) from 4.89
billion or (2.34%), and Bangkok Metropolitan Bank decreased to 2.24
billion (1.59%) from 19.5 billion (12.2%). (TNA)
KTB: Capital write-down waiver proposed
Krung Thai Bank (KTB) has proposed the Financial
Institutions Development Fund (FIDF) to allow the bank to write down its
registered capital and to refrain from exercising warrants, with the aim
to clean the bank’s balance sheet.
Bank president Viroj Nualkhair said the bank was
waiting for an answer from the rescue fund and if it insisted to exercise
its right, it would have to discuss KTB’s privatization plan again. The
planned registered capital write-down is to write off the state-run
bank’s accumulated loss in a bid to attract investors to subscribe for
the bank’s shares to be allocated to the public as part of the
privatization plan.
The FIDF controls the largest stake in KTB at around 80
per cent and it has planned to sell KTB’s shares to the public by the
fourth quarter of this year to brining down the government’s holding to
below 50 percent. (TNA)
Multi-faceted aid promised for Afghanistan
In its assistance to war-torn Afghanistan, Thailand
will adhere to His Majesty the King’s “Sufficiency Economy”
philosophy, linking peace-keeping and sustainable development, Foreign
Minister Surakiart Sathirathai told an international conference on
Afghanistan in Tokyo.
Thailand’s participation was not confined to security
operations but would also promote self sufficient and sustainable
development among local communities, Surakiart told the conference. The
foreign minister was speaking at the International Conference on
Reconstruction Assistance to Afghanistan, which ended yesterday.
Participants included Hamid Karzai, chairman of the interim administration
of Afghanistan, and UN Secretary-General Kofi.
Surakiart said Bangkok would participate in the
rehabilitation of Afghanistan by dispatching a military engineer task
force, which would include field and construction engineers and de-mining
experts. Teams of military medical officers will also be sent to the
country. (TNA)
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