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Thai contractor companies are likely to face a higher degree of competition as contractors from overseas, especially China, Malaysia and Dubai, expand their investment in Thailand.

Rachatanee Group chairman Dr Boon Vanasin, who has interests in China, said that up to 10 contractor companies from China are expected to expand their investment in Thailand as China's property bubble will burst after the Olympic Games.

"A number of contractor companies from China have to find new destinations for business expansion after China's property market slumps. Thailand will be one of the destinations for them," he said.

As of now, China Railway Construction has expanded its investment in Thailand by setting up a joint venture with a Thai contractor. Other contractors from China are likely to take a similar route into the Thai real-estate industry, Boon said.

Earlier, China Railway Construction had set up a joint venture with Krung Thon Engineering, called KCT Joint Venture. The company participated in a bid for a Bt5.2-billion double-track rail project, which was to run from Chachoengsao province to Laem Chabang in Chon Buri.

However, the State Railway of Thailand called for the company's disqualification, and the matter was challenged in court by the joint-venture company.

Boon said that though some Chinese investments in overseas markets, including Thailand, may suffer losses, this will not affect their business because their aim is to get the experience first and then chase profits.

Meanwhile, the second-largest building contractor from Malaysia, Bina Puri, is turning its focus to Thailand, based on expectations of a greater growth potential.

Executive chairman Mohamed Feisal Bin Ibrahim said Bina Puri is interested in property projects in Thailand more than Malaysia because the Kingdom has more projects thanks to a bigger population.

At present, Bina Puri has projects worth Bt23.8 billion in Thailand. Most of them are Ua Athon housing schemes in which the company has been collaborating with Deva Development to construct more than 30,000 low-cost apartments.

Other property projects are being run along with private companies, such as S&S Residential - a subsidiary of TCC Capital Land - to construct a 22-storey condominium block at Sukhumvit 101/1. Other private companies working with Bina Puri are Wondera, the developer of Aspace condominiums, Tanayong and AS Associated Engineering (1964).

The Thai cabinet had earlier approved an ambitious investment programme for the expansion of the national railways by 2,644 kilometres at an estimated cost of Bt367 billion.

The government had invited players from China, Japan and Germany to consider investments in railroad and related manufacturing schemes.

A source from a contractor company said Thai contractors would face higher competition from overseas contractors, however, he said, this is likely to have a bigger negative impact on small- and medium-sized contractors who do not have enough cash to compete with international contractors.

He said that at this time, even with scant competition from overseas, about 1,000 small and medium contractor companies have suspended their business because of soaring construction material costs.

At a glance:

-Up to 10 contractors companies from China are expected to expand their investment in Thailand as China's property bubble bursts after the Olympic Games.

- Malaysian firm Bina Puri says it is interested in property projects in Thailand because the Kingdom holds more potential.

- Overseas competition is likely to have a negative impact on smaller contractors who do not have enough cash to compete with international contractors.