What's new in business news: August 22, 2014

Business backing for new PM Prayuth, Suvarnabhumi airport expansion finished by 2018 & $1.4bn investment in wind & solar energy by Energy Absolute & billionaire founder.

Junta leader Gen Prayuth Chan-ocha chairs a meeting of the Board of Investment (BoI) on Tuesday. He was yesterday nominated by the National Legislative Assembly (NLA) to become Thailand's 29th prime minister. CHANAT KATANYU

ECONOMY

Business backing for new PM Prayuth

Business leaders have welcomed the nomination of junta chief Gen Prayuth Chan-ocha to become prime minister, saying his strong and decisive leadership is essential for the country to tackle numerous urgent problems. Many are hoping that the new interim government takes actions to build confidence among foreign investors.

Some are expecting long-term strategic planning for Thailand's economy for the next two decades and agricultural production and zoning management for the long-term future. Others have suggested that to be serious about economic reform, the Science and Technology Ministry should be upgraded to become the No.1 ministry to support research and development, not the commerce and industry ministries. The Finance Ministry should also play a greater part in supporting tax and incentives.

Leigh Scott-Kemmis, president of the Australian-Thai Chamber of Commerce, said: "I don't think anyone is surprised by the choice and, considering what has been going on, I think it is the safest option." The challenge will be moving Thailand out of the middle income trap, he said. Crucial to that is high-technology industry that requires enforcement of laws.

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AIRPORTS

Suvarnabhumi airport expansion operational by 2018

Construction of a new passenger terminal and monorail system at Suvarnabhumi airport according to a new plan has been approved by the Airports of Thailand Plc (AoT).  Bidding for the 24-billion-baht project is expected to take place early next year.  The terminal is expected to be operational in 2018 and will house 10 parking lots and handle an extra 20 million passengers annually, adding to Suvarnabhumi's current capacity of 45 million passengers a year. A monorail will be built to take passengers to the new terminal, which will be located north of Concourse A.

The AoT board has also agreed to develop U Tapao naval air base into a commercial airport to serve chartered flights and accommodate 2.5 million passengers a year with a budget of 100 million baht to refurbish the terminal. An advance passenger processing system (APPS) to speed up immigration checks at the airport is still under review. The system would allow officials to obtain passenger profiles from their countries of origin and check for people blacklisted or banned from leaving a country. For construction of a third runway at Suvarnabhumi, two length options are under consideration: 2,900 metres and 4,000 metres.

The construction of the terminal and monorail will push back the second phase development of Suvarnabhumi by 10 years. The terminal project is being done first because it will require about one-third of the amount of money needed for the second phase project.

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ALTERNATIVE ENERGY

Energy Absolute & billionaire founder to invest $1.4bn in wind & solar energy across Thailand

Bloomberg News agency

Energy Absolute, whose Bangkok-listed shares have more than tripled this year, plans to spend about 46 billion baht over the next three years to boost power generation capacity from renewable energy. Capacity will increase by 570 megawatts by 2017 from about 100 megawatts. The company has a strong ambition to become the leading operator of renewable energy in Thailand and the region.

Energy Absolute in December began operating a 90-megawatt solar farm in Nakhon Sawan province, the country's biggest solar farm by capacity and a second 90-megawatt solar plant will begin commercial operation by the end of the year, followed by a similar-sized facility in December 2015. Wind farms in the southern Thai province of Nakhon Si Thammarat with a total capacity of 126 megawatts will be completed in September 2015, and wind projects in Chaiyaphum province in the country's northeast, will be built by 2017. Energy Absolute also has the capacity to produce more than 800,000 litres of biodiesel and 80 tonnes of glycerin a day. Biomass still accounts for the majority of Thailand's renewable energy capacity. Thailand had 2,085 megawatts of biomass capacity compared with 847 megawatts of solar and 242 megawatts of wind in 2013.

Somphote Ahunai, the founder of Energy Absolute, became a billionaire this year as the company's stock more than tripled to a record. Mr Somphote, 46, owns about 40% of Energy Absolute. The stake is valued at $1.2 billion. The company's share price has rallied 216% this year, compared with a 72% gain in the MAI Index.

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About the author

columnist
Writer: Jon Fernquest
Position: Online Writer