1 MB Thailand Infrastructure News Issue 10
Total Page:16
File Type:pdf, Size:1020Kb
Thailand Infrastructure News Issue 10 15 February 2019 www.pwc.com/th Disclaimer This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors. © 2019 PricewaterhouseCoopers FAS Ltd. All rights reserved. PwC refers to the Thailand member firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details. PwC Thailand l February 2019 2 Headlines CP GROUP, GOVT CONTINUE TALKS ON RAIL-LINK PROJECT Somkid says key projects on course EEC investment set to exceed forecast PTT budgets B450bn for 2019 expansion Bang Saray new destination on EEC PwC Thailand l February 2019 3 Headlines NESDC: Infrastructure investment booms IEAT optimistic on EEC industrial estate sales BSR still in running for fast rail project Rail agency's electric dreams Agency OKs final Orange Line rail PwC Thailand l February 2019 4 Headlines Somkid hastens mega-projects PPP Act restricts scope to basic projects Rail overseer gets NLA nod Completion of bids for Thai-China rail project expected in March PwC Thailand l February 2019 5 CP GROUP, GOVT CONTINUE TALKS ON RAIL-LINK PROJECT 01 February 2019 State agencies and the Charoen Pokphand Group are continuing their negotiation on the high-speed railway project which will link up Thailand's three main international airports, said Kanit Sangsubhan, secretary general of the Eastern Economic Corridor Office. The mega project requires negotiations in details. The CP Group has over 100 conditions up for discussions with the government, he said. So far, most of negotiations have centred on land and land transfers. For example, work at Makkasan station could start when transfer is made on 50 per cent of the land required. When asked whether the other group will be called if negotiations with CP Group failed, Kanit said the negotiations is still on-going and is expected to conclude this month. Source: THE NATION http://www.nationmultimedia.com/detail/Economy/30363313 PwC Thailand l February 2019 6 Somkid says key projects on course Deputy PM assures Japanese investors 01 February 2019 Osaka: Deputy Prime Minister Somkid Jatusripitak reaffirmed Thursday to 500 Japanese investors that the development projects initiated by this government will continue, saying it's unlikely that any political parties would be foolish enough to discontinue projects which are vital to the country's future economic growth. In his keynote speech at a seminar organised by the Board of Investment in Osaka, he reiterated his confidence that the significant policies initiated by this government, such as the Thailand 4.0 initiative, the Eastern Economic Corridor (EEC) and Southern Economic Corridor, will be carried out. Mr Somkid said the EEC was instrumental in drawing foreign investment to reach 680 billion baht in 2018, up from 290 billion in 2017, with Japanese investment in the EEC making up 44 billion baht. Japan is the largest foreign investor in Thailand, with total investment of US$2.2 billion in 2018. Japan is also the second-largest trading partner of Thailand, with two-way trade amounting to $60 billion. Some 1.66 million Japanese tourists visited Thailand last year, while Thai tourists to Japan totalled 1.13 million. "I am quite confident that those significant policies will not at all get stalled, as they are instrumental in propelling Thai economic growth in the future," Mr Somkid said. "No political party is likely to be a fool to interrupt their development." According to Mr Somkid, the government has established the foundation for development under the national 20-year strategic plan and the law has already been issued to make sure that the EEC project will be implemented by the next government. He said the government has laid down the cooperation framework for the Ayeyawady-Chao Phraya-Mekong Economic Cooperation Strategy and the Greater Mekong Subregion, as well as the Mekong-Japan strategic partnership. Thailand plays an active role supporting the Japan-initiated Free and Open Indo-Pacific Strategy under which the two nations will develop infrastructure and connectivity such as the high-speed train linking Bangkok and Chiang Mai and the high-speed train in the East-West Economic Corridor. Thailand has also pledged to join Japan in settling the Regional Comprehensive Economic Partnership this year. "I believe the general election will pave the way for Thailand 's stability in all dimensions, be it politics, economics, trade and investment, which can create more confidence among foreign investors," Mr Somkid said. Source: Bangkok Post https://www.bangkokpost.com/business/news/1621530/somkid-says-key-projects-on-course PwC Thailand l February 2019 7 EEC investment set to exceed forecast 04February 2019 XOSAKA: Thailand's investment is expected to grow by 10% in 2020, largely driven by outlays to the government's flagship Eastern Economic Corridor (EEC). Kanit Sangsubhan, secretary-general of the EEC Office, said investment in the corridor is expected to become vibrant in 2020, with the growth rate likely far higher than projections by state agencies. The National Economic and Social Development Council, formerly the National Economic and Social Development Board, forecasts the country's overall investment to grow 5.1% this year, higher than the 4.5% growth forecast by the Bank of Thailand, up from an estimated 3.6% in 2018 and 0.9% in 2017. Mr Kanit said 2020 investment growth will largely stem from five key infrastructure projects in the EEC, which is expected to begin operation by the middle of this year. The five projects are a high-speed railway linking three airports (225 billion baht); U-tapao aviation city (290 billion); a maintenance, repair and overhaul (MRO) centre (10.6 billion); the third phase of Laem Chabang seaport (114 billion); and the third phase of Map Ta Phut seaport (55.4 billion). Mr Kanit said those five main projects in the EEC will move forward as planned, with the winning bidders expected to become available before April. The Board of Investment (BoI) reported last month that applications filed for promotional privileges amounted to 902 billion baht for 2018, 43% higher than in the previous year. Some 84% of the applications were in the government's targeted industries, including digital healthcare, petrochemical and robotics, with a total value of 758 billion baht. Applications in new S-curve industries such as digital, medical, petrochemical, robotics and space totalled 539 billion baht, while those in the first S-curve grouping fetched 219 billion, mostly in the farming/bioeconomy, smart electronics, smart automotive, tourism and food industries. Applications in the EEC dipped slightly from 436 projects in 2017 to 422 projects in 2018, but the total investment for the applications rose to 684 billion baht from 288 billion in 2017. Mr Kanit said the EEC project is instrumental in driving economic growth this year and next and will help offset the negative impact of the ongoing trade row between the US and China. "The trade war will definitely slow world economic growth," he said. "However, the EEC project helps offset such impact.“ He said tourism in the EEC is also expected to help contribute to the economy in the long term, with the number of tourists expected to double to 51.3 million by 2037. Many investors from Japan, China and the EU are keen on expanding their investment in the EEC, with 24 French companies having recently visited the region to witness the EEC development plan and eyeing investment in the smart city, defence industry and human resource development. Mr Kanit assured Japanese investors that the EEC will continue after the March 24 general election because the corridor's development is legally bound by the EEC law, which requires the next government to carry out EEC development. He said a study to expand the EEC project to cover additional provinces such as Samut Prakan, Sa Kaeo, Prachin Buri, Chanthaburi and Trat, in addition to the existing three eastern provinces of Chachoengsao, Chon Buri and Rayong, is likely to conclude by mid-year. Source: Bangkok Post https://www.bangkokpost.com/business/news/1623142/eec-investment-set-to-exceed-forecast PwC Thailand l February 2019 8 PTT budgets B450bn for 2019 expansion Group, 5 subsidiaries to splash on upgrades 04 February 2019 PTT Plc, the national oil and gas conglomerate, together with five subsidiaries is allocating a 2019 budget for all business expansion worth a combined 450 billion baht.Most of the budget will be spend on the government's Eastern Economic Corridor scheme in three provinces (Chachoengsao, Chon Buri and Rayong) where the group operates petrochemical and utility businesses.President and chief executive Chansin Treenuchagron said PTT itself will spend 130 billion baht in 2019, including the fifth phase of an onshore gas pipeline, the second phase of a liquefied natural gas (LNG) receiving terminal and an oil retailer unit.The receiving terminal is in Nong Fab, Rayong province and has a capacity of 11.5 million tonnes a year.Mr Chansin said all PTT business plans are based on an estimate of crude oil prices averaging US$60 a barrel, down from $69 in 2018.The oil and gas drilling firm, PTT Exploration and Production Plc (PTTEP), is assigned 60 billion baht, mainly for drilling in existing oil and gas blocks in Thailand, Myanmar, Malaysia and Australia.PTTEP also has two new petroleum blocks in the United Arab Emirates.Phongsthorn Thavisin, PTTEP's chief executive, said the firm plans to expand its oil and gas reserves from five to seven years, equal to the current proven reserve volume of 670 million barrels of oil equivalent."PTTEP is in a transformation period of the business concept, refocusing on Southeast Asia and the Middle East instead of covering all regions in the world," Mr Phongsthorn said.