From a regular company inspection, Prapas found that some medium-sized construction companies had borrowed money by putting up their securities as collateral assets.

"Their credit lines with banks are at their limit," said Prapas. "They can't find any way to secure the money, so they're willing to pay a 2-per-cent interest rate per month to get that kind of loan."

He said the Bank of Thailand's 30-per-cent withholding measure and fear that other unexpected measures might be implemented had caused foreign parties to delay injecting money into construction projects.

"The Thai firms are hired by foreign companies to do the construction, but the capital doesn't flow in, and they have expenses to pay every day."

The liquidity of many companies has fallen short, and they have announced they will make dividend payments to shareholders in shares rather than making cash payments.

The Stock Exchange of Thailand yesterday revealed that listed companies generated profits of more than Bt469.35 billion last year, a drop of 12 per cent from 2005, with the fourth quarter showing signs of an economic slow-down and loss of consumer confidence.

Piyarat Setthasiriphaiboon

The Nation