State banks urged to lend to GM, Ford: Korn

He urged the two auto-makers to expand their investments in Thailand. "It is a positive for the economy, as the investment would create jobs", he said yesterday.

He said the state-owned banks would not offer special low interest rates for the two manufacturers, because if they did so then other industries would ask for the same treatment.

Investment privileges would not exceed what the Board of Investment has already provided, Korn said.

He said Ford had informed him that it would relocate other production plants only to Thailand. The two carmakers have decided to choose Thailand as their production base even though they are still worried about political stability and the country gives fewer incentives when compared with other country's proposal, he added.

Earlier, the Export-Import Bank of Thailand expressed its intention to participate in co-financing for a diesel-engine plant worth Bt15 billion planned by GM, on the grounds that the project would create jobs and transfer technology. GM is facing difficulty in financing the project as its US-based parent firm has filed for bankruptcy protection.

Exim Bank president Apichai Boontherawara said yesterday the bank needed a partner to make a syndicated loan for the diesel-engine project. He added that both GM and Ford had contacted the bank in the past month. The bank thinks their proposed projects are possible and would help create employment in the country.

"I can't tell you how much Ford would like to borrow, as it is a secret matter between us," Apichai said. "But they have proposed a project to us for consideration, which is to produce pickups and passenger cars. These would be new production lines with factory expansion as the production base for future exports."

Korn also said the state-owned banks were expected to lend more to customers after they receive capital injection. The capital injection is expected to come after Parliament meets on Monday and approves the executive decree authorising the Finance Ministry to raise Bt400 billion, he said.

Economic ministers on Wednesday approved capital injections worth Bt14.5 billion to five state-owned financial institutions: Exim Bank, the Government Housing Bank, the Bank for Agriculture and Agricultural Cooperatives, the Small and Medium Enterprise Develop-ment Bank of Thailand and the Small Business Credit Guarantee Corp.