The government is being urged to offer more incentives to make its special economic zones (SEZ) in Nong Khai, Trat and Mukdahan more appealing to prospective investors.
Phamon Chaosirikul, president of Mukdahan Chamber of Commerce, said the government should consider taking the bold decision to offer a free lease contract for the first 20 years or charge a lower rate to attract more potential investors to bid for contracts to develop the special economic zone in Mukdahan.
Since the government may allow the investors awarded the contracts to develop this specific SEZ on their own, the government should assure prospective investors that all basic public utility services such as electricity, running water and transport infrastructure will be made available immediately, said Mr Phamon.
The SEZ plan is not the same as one to construct new factories that probably require a near-exact time frame for success. It is a new concept to Thailand that also varies with different capacities in different areas, he said.
"At this point, cities declared as government SEZs still have only 'luxury' names showing interest but nothing practical has been evident so far," he said.
Mukdahan, which actually has good potential given the fact that it serves as a gateway to Asean, is located opposite leading economic cities in Laos, linking to Vietnam, and can help enable the East-West Economic Corridor (EWEC), he said.
The Treasury Department previously vowed to revise the terms of reference (ToR) if the second round of bidding proves unsuccessful. It would then call for a new round of bidding to encourage major companies to make bids.
And as it turned out, only one contender, Panpee Group (Thai Laos Cambodia) Co, made bids for the SEZs in both Nong Khai and Mukdahan in the second round on June 20, said Phachara Anantasil, director-general of the department.
That came despite the department having already adopted minor changes to the bidding terms, including adding a requirement that a bidder must have experience in at least one type of real estate development. Another point was to extend the period of time allowed for drafting an investment proposal from 60 days to 90 days, he added.
Although as many as 19 potential bidders purchased bidding applications for the first round last year, only one bid for a SEZ development contract in Trat while there were no bidders for those in Nong Khai and Mudahan.
Kriangkrai Thiaranukul, vice-president of the Federation of Thai Industries (FTI), said the main reason for the lack of interest in the government's SEZ projects was that none served their interests. The land lease rates are too high while basic infrastructure is not ready, he said.
As the economy has yet to pick up, many business operators find themselves with a surplus production capacity and there is little need for them to consider investing more at the moment, while others lack investment funds and aren't ready to build a new factory, he said.
"Border SEZs are suitable for only certain types of industries whose products are in high demand in neighbouring countries and whose transport costs are high," he said, referring to products such as plastic ware for household use. "In other industries, business operators think their current manufacturing bases are okay so there is no need to look for a new factory in a location," he said.