Construction companies seek stronger support

Aungsurus Areekul, secretary-general of the Thai Contractors Association, said the construction situation was in a slump this year, particularly due to the low number and limited value of government construction projects.

He said that in the 2008 fiscal year the government planned to open bids for construction projects worth a combined Bt50 billion. By value, the amount is only 40 per cent of the value set in the 2005 fiscal year.

However, not all projects are open for bidding, and that means thousands of construction firms have no work. Some had cut proposed prices to win contracts, only to discover that they could not finish the work because of rising raw-material costs.

"Of the total Bt50-billion fiscal budget, I'm not sure whether the ongoing projects will reach Bt20 billion. This is critical. Although the government approved 11 measures to help contractors, that will mean nothing if the government grants too small a budget for all construction projects nationwide," he said.

Last month a Cabinet resolution allowed contractors who have yet to sign agreements or hand over the first phase of their projects to cancel the bidding agreements. As a result, half the bidding projects were cancelled because of the rising price of construction materials.

Some state enterprises are also involved in lawsuits and could not proceed with the construction work.

Furthermore, Aungsurus called on the government to accelerate paying K bills, which compensate for increased raw-material prices, to contractors because most of them lack financial liquidity. The association has asked the Budget Bureau to accelerate the completion of the new formula for calculating K bills before September as it is worried that it would delay contractors' decisions on bidding for government construction projects.

"We hope the new formula will be flexible enough to cope with rapid changes in raw-material prices. In addition, we are also gathering petitions from our members to submit to Prime Minister Samak Sundaravej at the end of this month," he said.

Meanwhile, the Industry Ministry plans to ask the Cabinet for an additional budget of Bt5 billion to finance six projects during the 2009 fiscal year.

It plans to spend Bt3.017 billion on building an automotive testing centre, Bt1.484 billion on the national cane agenda, Bt620 million for the Board of Investment's investment promotion, Bt110 million for a strategy of machinery improvement, Bt43 million to develop the industrial sector of three southern provinces and Bt7 million for the Industrial Estate Authority to establish the Halal Food Industrial Estate.