BoI clears first batch of 200 backlogged privileges in move to boost investments
To boost the business climate, the junta-controlled Board of Investment (BoI) yesterday approved 18 projects worth Bt122.8 billion, clearing the first batch of some 200 applications for privileges that have been backlogged since the previous government went into caretaker mode.
BoI secretary-general Udom Wongviwatchai said yesterday’s green light heralded a better investment climate in Thailand because it would help hesitant investors to regain enough confidence to dust off their projects and submit them in the rest of this year.
“The go-ahead for projects over the next few months will also positively impact the economy due to inflows of funds from the approved projects, boosting supporting industries and the hiring of several hundreds of thousands of workers from 2015,” he said.
Yesterday’s meeting was the first by the BoI’s new members, who were appointed on June 7, with Army chief General Prayuth Chan-ocha – who is also chief of the National Council for Peace and Order (NCPO) – serving as chairman.
Automobile-related projects made up the bulk of the approved projects, including Toyota Motor Thailand’s Bt51.5 billion project to produce 570,000 pickup trucks and 4.8 million auto parts a year in Samut Prakan and Chachoengsao.
The junta has pledged to clear all 700 pending applications worth Bt800 billion within two months. Prayuth reportedly told the BoI to give priority to investments that helped strengthen the economy and enabled the country to stand on its own two feet.
He mentioned projects with advanced technology that will be transferred to Thais, those with research and development activities, those that add value to products, use local components and not just use cheap labour for simple assembly operations, those in green industries that do not create pollution, and those promoting renewable energy or energy conservation.
Also yesterday, a meeting of the NCPO committee with farmers, millers, traders and government agencies narrowed options for assistance to farmers in the 2014-15 harvest season to a budget of Bt4.58 billion or Bt2.28 billion to subsidise interest payments
for farmers, said Pol General Chatchai Salikalya, deputy head of the NCPO’s economic team.
The NCPO will soon select which budget to use.
The NCPO will also help farmers by cutting the cost of production by Bt432 per rai from the current average production cost of Bt4,787.
The government recently sought the cooperation of businesses, including distributors of chemical fertilisers and pesticides, to bring down their retail prices.
It has also asked land and pushcart owners to lower their rental rates.
The NCPO has vowed not to help farmers by providing subsidies or money directly to them, as it was concerned about inappropriate spending objectives.
“The NCPO will help lower the cost of production, support the Bank for Agriculture and Agricultural Cooperatives to provide low interest rate funding for farmers and will only launch measures to ensure stable rice prices in the market on a temporary basis,” Chatchai said.
The final decision will be made by Prayuth, he said.
Luck Wajananawat, managing director of the BAAC, said the bank will offer a soft interest rate of 3 per cent per six months, while the NCPO has two options to subsidise farmers by providing them a Bt50,000 loan or a Bt100,000 loan.
The first option will cost the government Bt2.29 billion for subsidies and the second Bt4.58 billion.
With cost reduction of Bt432 and interest subsidy of Bt150 per rai, farmers will save Bt582 per rai, he added.