Govt projects lift new contractors

Although a number of contractors have shut up shop, many new entrants have founded companies that are focused on governmentsponsored megaprojects, a survey by The Nation conducted early this week has revealed.

As reported by the Business Development Department of the Commerce Ministry, 1,518 contrac¬tor companies, with a cumulative reg¬istered capital of Bt4 billion, suspended operations during the first seven months of the year.

Meanwhile, the report also showed that at the same time, new contrac¬tors have registered with the depart¬ment - a total of 3,650 companies with a combined registered capital of Bt6.3 billion - in the period.

A source at a contractor company said most of the contractors that have shut up shop during the first seven months are small and mediumsized companies who did not have enough cash to sustain themselves when faced with the higher cost of construction raw materials.

However, about half of new con¬tractors who have establish their busi¬ness in the period have based their strategy on bagging governmentsponsored megaprojects, which are expected to be worth about Bt500 bil¬lion.

"Most of the new entrants are joint ventures with foreign investors who expect to jointly bid for the govern¬ment's megaprojects, worth about Bt500 billion," the source said.

The government plans to invest Bt500 billion in megaprojects, with a special focus on railways - the Skytrain as well as the underground system - this year.

The first project - the new Purple Line railway, which opened for bid¬ding last month - is worth Bt36 bil¬lion. The government will also open bidding for others projects in the last quarter and next year.

Rachatanee Group chairman Boon Vanasin, who also has investments interests in China, said that up to 10 contractors from China are expanding their investment in Thailand as China's property market slows down after the Olympics.

"A number of Chinese contractors have to find a new destination for expansion after China's property mar¬ket slumps.

"Thailand will be one such desti¬nation for them," he said.

China Railway Construction has set up a joint venture with a Thai contractor. Others contractors from China have followed suit, Boon said.

China Railway Construction had earlier set up a joint venture, KCT Joint Venture, with Krung Thon Engineering. The new company will bid for a Bt5.2billion doubletrack rail project, which will stretch from Chachoengsao province to Laem Chabang in Chon Buri.

However, the State Railway of Thailand said KCT Joint Venture had been disqualified.

The company has filed a case against the agency.

Meanwhile, Malaysia's secondlargest contractor, Bina Puri, is turn¬ing its focus toward Thailand.

Executive chairman Mohamed Feisal Bin Ibrahim said Bina Puri is more interested in Thailand because the Kingdom has more projects due to its larger population.