Posted on 02 Dec 2009
Business leaders are cautiously optimistic that a months-long deadlock holding up new investment at the Map Ta Phut industrial estate may be cleared today.
Local stocks rose by more than 3% yesterday, driven by strong gains in energy stocks, in anticipation of a positive ruling for industrial firms.
The Stock Exchange of Thailand index closed at 710.01 points, up 20.94, in trade worth 24 billion baht, the highest level for the market since Nov 11.
The
The
The 76 industrial projects caught up in the case involve hundreds of billions of baht in investments by some of the biggest companies in the country, including the PTT Group, the Siam Cement Group, BlueScope Steel, Bayer and Aditya Birla Chemicals.
"We expect somewhat positive results because we explained clearly at the hearings that the affected companies are ready to do whatever it takes to comply with the law, including health impact assessments (HIA)," said Chainoi Puankosoom, the president and chief executive of PTT Aromatics and Refining.
"We are ready to adjust what is necessary so that the projects can move forward, together with efforts to improve the environment. [Businesses] are not against the criteria. ... We only did what the law told us to do in the past."
The Map Ta Phut case has been a major cloud over the Thai investment climate, with some analysts warning that a setback could have dramatic consequences for new investment and economic growth going into 2010.The Abhisit Vejjajiva government has said that while it is sympathetic to community concerns about the environmental and health impact of industrialisation, new private investment will be critical for future economic growth.
Former prime minister Anand Panyarachun is chairing a panel composed of business representatives, environmentalists, community activists and state officials to seek a compromise on how to balance industrial development with local community interests.
"Foreign investors normally look for comfortable investment destinations. If the rules are too strict here, they will simply turn to invest somewhere else," said Mr Chainoi.
Yo Jitsukata, the president of the Japanese Chamber of Commerce, said Map Ta Phut ranked among the top concerns for both Thai and foreign investors alike.
"I expect some good results, meaning that the suspended projects can go ahead. However, whatever the result is, it must be clear what the environmental regulations are for future projects," he said.
"These projects involve large investments. If they have to stop, then huge economic damage will result."
Mr Jitsukata cautioned that a negative outcome would affect
Therapong Vachirapong, a strategist at Phatra Securities, said yesterday's market rally was driven by expectations that the early court ruling would bode well for businesses involved in the case. The court had been expected to rule on the Map Ta Phut case in February.
Mr Therapong said investors should watch closely to see what conditions might be attached to the ruling.
Requiring the government to pass a new legal framework covering health impact assessments, for instance, would take time given the legislative process, potentially dampening the investment climate in the short run.
Industrial firms dominated trade in the stock market yesterday, with energy giant PTT gaining 13 baht to 237, PTT Exploration and Production rising eight baht to 138.50, PTT Aromatics up two baht to 23.90 and Siam Cement up nine baht to close at 235.
