Ua Athorn cost study

Prime Minister Abhisit Vejjajiva also ordered them to study the additional cost if the project proceeded.

Deputy Government Spokesman Watchara Kannikar said the main questions were whether it was worthwhile to complete the remaining 70,000 units and if so, how much of a loss that would entail; and if construction were terminated, how much the National Housing Authority (NHA) would lose.

"Many ministers have questioned the project's figures," said a source.

Ministers have urged a change in pricing strategy and the establishment of a subsidiary or a mutual fund to take over the Ua Athorn project from the NHA.

NHA figures show about 25 per cent of the total 280,000 units remain unsold, but Deputy Prime Minister Sanan Kachornprasart has questioned where the unsold units are located. He cited reports that some are in wooded areas, making it difficult to find buyers.

Finance Minister Korn Chatikavanij also said the Government Housing Bank, the main mortgage provider for the project, reported 10 per cent of the mortgages had become non-performing. Abhisit asked whether the NHA could unload the unsold units onto private companies. Deputy Prime Minister Korbsak Sabhavasu criticised the NHA for its incorrect pricing strategy.

"The Cabinet is looking for ways to terminate the project at a minimum cost, but they don't say whether the termination is because the project was the brainchild of former prime minister Thaksin Shinawatra," the source said.

However, the Cabinet yesterday approved two Interior Ministry proposals to help the NHA address the financial burden incurred by the project. One of them is the government shouldering the interest burden of Bt4.792 billion. Of that, Bt3.587 billion has been approved for fiscal 2009. The remaining Bt1.205 billion will be in fiscal 2010 if the Ua Athorn account cannot be separated from the NHA's main account.

It also allowed the NHA to lower the unit numbers from 300,504 units to 281,556 with the possibility of another cut, so that the NHA could focus only on good locations and reduce the interest burden.

During the Thaksin administration, the NHA had planned to construct 400,000 units.