NHA rehab plan includes interest relief

It will present the plan at Tuesday's Cabinet meeting.

Siriroj Chaopaknam, deputy governor of the agency, said the budget would clear the NHA's interest burden arising from the construction delays, project downsizing, land costs and inventory of the Ban Ua Athorn scheme.

The housing projects are on land plots nationwide, for which NHA pays interest of 5 per cent per annum, or about Bt600 million.

In the rehabilitation plan, the NHA also proposes a scheme to increase the value of its land bank, consisting of a previously existing 6,000 rai and 6,000 additional rai acquired at a cost of Bt20 billion for the construction of Ban Ua Athorn projects. The NHA plans to sell some of the plots to any interested private investors to reduce the financial burden.

The selling price could be below the cost if selling the land makes more sense than keeping it, he said.

"We cannot afford to post another loss this year, as the Finance Ministry will no longer guarantee our borrowing, and this will affect the agency's finances," he said.

The Ban Ua Athorn project contributed largely to the losses. Yesterday, Social Development and Human Security Minister Issara Somchai, during a visit to the NHA, ordered the agency to categorise the 377 ongoing Ban Ua Athorn projects in three groups. Those that are 80-90 per cent complete will proceed with construction work, those that are 30-50 per cent done must be completed on "actual demand", and those with less than 10-per-cent progress must be delayed.

The minister said at least 100 provincial projects were initiated on "false demand", but with poor locations contractors could not sell the projects and delayed construction work. He said the NHA should seize the guarantees placed by these contractors.

Siriroj admitted more than 20 contractors could see their guarantees confiscated for failure to complete the projects on schedule. Backed by a Cabinet resolution, the NHA earlier extended the deadlines for the construction of 70,000 units.

The agency has shouldered an interest burden of Bt4.5 billion from the project alone: Bt1.5 billion from construction deadline extension, Bt642 million from the cancellation and project downsizing and Bt2.38 billion from complete but unsold units.