The Thai Contractors Association yesterday urged the government to relieve them from the tide of rising oil prices and interest rates.

After a meeting of more than 100 contractors yesterday, Aungsurus Areekul, secretary-general of the association, said his organisation would ask the government to increase the weight limit for trucks and inspect projects more quickly so that contractors can get paid.

They will request that caretaker Prime Minister Thaksin Shinawatra ask the Cabinet to consider the request at its meeting next Thursday.

He said that since March 2005, oil prices had surged 70 per cent, which in turn had increased the price of most construction materials. Moreover, interest-rate hikes have constricted contractors' incomes.

"Contractors who signed a contract before March 2005 have production costs that are 15 per cent higher than a year earlier," Aungsurus said.

The contractors are asking the government to:

l Order the extension of construction by 180 days for state projects contracted before May so that contractors can have enough time to procure building materials;

l Increase the weight limit for a 10-wheeled trucks to 30 tonnes from 25 tonnes.

l Accelerate the process of project inspections so that contractors can be paid on time.

l Review formulas for calculating "escalation factors", which are tools for reducing risks from increased prices of building materials. These escalation factors are paid as bonuses known as K bills to contractors for delays that are not the contractors' fault.

l To cancel bidding agreements barring contractors from bailing out on pending construction projects, the bids for which were won in March.

"This is considered the time of greatest crisis for the construction industry. More than 100 small contractors are closing down their operations," said Aungsurus.

"The government has not yet paid K bills worth an accumulated amount of Bt10 billion to contractors," he added. "This has affected the contractors' cash flow."

Premchai Karnasuta, president of Italian-Thai Development Plc and vice president of the association, said that if the government did not assist the contracting industry, small contractors would gradually shut down their operations, while large ones would increasingly tackle construction projects abroad.

He said foreign developments accounted for 45 per cent of Italian-Thai's construction backlog.

Watcharapong Thongrung

The Nation