Posted on 13 Mar 2008
Local contractors yesterday called on the government to
control steel prices and liberalise steel imports to help curb sharp price
increases that may cause the construction industry to collapse. Polpat
Karnasuta, president of the Thai Contractors Association, said that trouble for
construction companies could hinder the government's costly megaproject plans.
The association's secretary-general, Angsurus Areekul, said
100 of its members had gone bankrupt as they could not cope with rising costs.
''Some 70 firms have been blacklisted from government's construction works
because of financial difficulties so far,'' he noted.
The construction industry has seen steel prices rise by 4.5
billion baht in total since early this year, the association said. The total
amount of higher costs could rise to 30 billion baht if prices remain at
current high levels throughout the year.
''We want the Commerce Ministry to take control of steel
prices as they have risen steeply,'' said Mr Polpat.
''At the same time, authorities should allow more imports
and be flexible on the quality standard of imported steel to enable us to
better cope with rising prices in the local market.''
Mr Polpat said prices of steel bar, which is mainly used in
construction projects, have surged by 65% in the global market from 18,000 baht
a tonne to about 30,000 to 31,000 baht so far this year. This has led to a
price jump of 10 baht per kilogramme in the Thai market.
The construction sector is expected to consume 4.5 million
tonnes of steel this year, Mr Polpat added.
''A number of contractors were unable to shoulder the rising
costs, which have resulted in heavy losses. If the problem continues, they
might stop construction altogether or possibly delay the works,'' Mr Polpat
said.
The Samak Sundaravej-led government plans to spend 1.4
trillion baht over the next four years on megaprojects, including 770 billion
baht for the construction of nine rail lines in
The association yesterday submitted its letter to Mr Samak
requesting a support from the government.
''We want the government to look into the current problems
and then consider what we have proposed. If they want to avoid the impact
possibly caused to the megaprojects, they must move to tackle the problem
urgently,'' he said.
''If the government does not give us a hand at the moment,
we are not sure that those who survive the current situation would be enough to
handle the government's coming projects or not,'' Mr Angsurus said.
''If they help us at the moment, the possible impact would
be minimised.''
