The Eastern Economic Corridor (EEC) has dominated current headlines, with the government pinning high hopes on the development. Generous tax breaks have been awarded to companies investing in skilled industries there.
The cabinet recently approved Kanit Sangsubhan, chairman of the Finance Ministry's private investment promotion committee and the head of the government project, to spearhead the Eastern Economic Corridor Office and put the development plan into action.
Mr Kanit talks to the Bangkok Post about the project and his assigned mission.
What is the Eastern Economic Corridor?
The EEC is intended to be a special location to accommodate the investment in 10 targeted industries, promoted as clusters by the government. The 10 industries are next-generation cars; smart electronics; affluent, medical and wellness tourism; agriculture and biotechnology; food; robotics for industry; logistics and aviation; biofuels and biochemicals; digital; and medical services.
The location covers a combined 30,000 rai of plots in three provinces: Chon Buri, Rayong and Chachoengsao.
The EEC is an enhancement of the Eastern Seaboard that had been the region's powerhouse for manufacturing and trade, notably for petrochemicals, automobiles and energy. It has been well-known among foreign investors for over 30 years.
Initially the government planned to develop 10 special economic zones in the border areas, but investors saw this project as impractical. The government then decided on the EEC to drive future economic growth.
The cabinet on June 30, 2016, approved the framework of the EEC development plan, while the law governing EEC development is set to be enforced in the middle of this year.
What is the government's plan for developing infrastructure in the EEC project?
The government is set to invest heavily in developing infrastructure projects to create seamless connectivity between Bangkok and the three provinces. Key infrastructure projects are projected to be finished in five years.
The government estimates total investment in the EEC, both from the government and private sector, worth 1.9 trillion baht.
The EEC will continue being developed by the next government because it is supposed to function as the new Thai economic engine.
Significant development projects include the Bangkok-Rayong high-speed rail, which will link to Suvarnabhumi airport, the Bangkok-Pattaya motorway, the overhaul of U-tapao airport, double-track rail projects, and the third phase of the Laem Chabang deep-sea port. Combined investment is worth about 300 billion baht.
The priority projects comprise the overhaul of U-tapao airport, high-speed rail development, the expansion of Laem Chabang port, and new city planning both for residential and recreational areas for people who work in the EEC.
Prime Minister Prayut Chan-o-cha authorised the Budget Bureau to earmark 6 billion baht from the central budget in fiscal 2016 and 2017 to finance the infrastructure development.
U-tapao airport will be upgraded to handle annual passenger capacity of 15 million passengers a year in the first phase (2017-21), up from 3 million now. The airport serves about 1 million passengers a year. The government expects 10 million foreign travellers to shift to U-tapao airport from Suvarnabhumi.
An aviation maintenance and repair centre is also planned at U-tapao, to be operated by Thai Airways International Plc in a partnership with Airbus, along with a free-trade zone.
The areas around U-tapao airport will be also developed as a centre for aviation. The Bangkok-Pattaya high-speed rail will be a fast-track project under the public-private partnership programme. With the rail, the commute from Bangkok to the EEC will take 45 minutes. A double-track rail will also be developed to link the ports of Bangkok, Laem Chabang and Map Ta Phut.
How has the private sector reacted to the government targeting 10 industries for the EEC?
Foreign investors, be they Japanese, Chinese or European, have shown strong interest in ECC.
The bioeconomy industry has already been implemented, with estimated investment cost worth around 250 billion baht over the next five years.
Fuji Film of Japan has also expressed its intention to invest in the medical industry while German tyremaker Continental AG will invest in high technology automotive tyres.
Industry Minister Uttama Savanayana will propose the development plans of electric vehicles (EVs) and robotics to the government soon, while the government has pledged to support the manufacturing of batteries and engines for EVs.
The government is interested in attracting BMW to manufacture batteries for EVs in the EEC areas.
Chon Buri province is expected to be a strategic location for food cluster, with Rayong for automotives and Chachoengsao for residential areas. Plans are also afoot for the Tourism and Sports industry to maintain Pattaya, Chon Buri and Rayong as tourism destinations, while the third phase of the Laem Chabang Port will include cruise development.
Are there plans to cooperate with any other country to help support the EEC?
The government is considering the possibility of signing a partnership deal on strategic industry development with other countries, including Japan and China, that are interested in investing in the EEC.