Alro urges S44 for Sor Por Kor land
Infrastructure projects could be delayed
The state must settle the issue of Sor Por Kor land being used for business activities beyond agriculture, otherwise the problem could cripple planned infrastructure development projects, say senior government and industry officials.
The 76.6-billion-baht motorway project from Bang Pa-in to Nakhon Ratchasima is likely to be the latest scheme put on hold if the government fails to settle the land issue.
Other infrastructure megaprojects in the government's flagship Eastern Economic Corridor -- including a double-track railway, a high-speed train and a motorway -- could also be affected, said Sompong Inthong, secretary-general of the Agricultural Land and Reform Office (Alro), which oversees Sor Por Kor issues.
Foreign investors are likely to remain hesitant at a time when the government is desperately trying to lure massive investment to help build these projects.
The land dispute has caused the suspension of major investment in wind farms and petroleum exploration and production projects, with speculation that more project suspensions could lead the government to once again use Section 44 of the interim charter to tackle the problem.
Mr Sompong said Alro has prepared information for the cabinet to make a decision by next week on whether to approve the use of Section 44.
"If we need a fast track to push forward all major investments to support the Thai economy, Section 44 would be the answer," he said. A quick decision would help avoid any suspension of the motorway spanning Bang Pa-in to Korat.
Construction of the 253-kilometre motorway running from Ayutthaya province to the city of Nakhon Ratchasima started in August 2016 and is scheduled for completion by 2019, with operation to begin in 2020.
He said the government plans to amend the Sor Por Kor law in tandem with the invocation of Section 44 to solve the problem in the long run.
A dispute emerged earlier this year when the Supreme Administrative Court ruled that it was improper to rent out Sor Por Kor land for wind farms in Chaiyaphum when the land had been designated for farming purposes only. The court ordered the revocation of a licence to develop a wind farm there.
Earlier this month, the same court revoked the Agricultural Land Reform Committee's order allowing the use of natural resources in areas of land reform for any purposes other than agriculture, leading to the stoppage of seven projects by upstream petroleum firms and trimming 16,000 barrels of oil equivalent per day (boed) or roughly 2% of the country's total oil demand.
Of the total, 15,000 boed is from SET-listed PTTEP, Thailand's only upstream oil firm.
Apart from PTTEP, the six other companies affected by the order are CNPHK Thailand Ltd, Eco Orient Resources Thailand Ltd, PTTEP SP, Apico Khorat Ltd, Twinza Oil Ltd and Yanchang Petroleum Thailand Ltd.
Sarawut Kaewtathip, deputy director-general of the Department of Mineral Fuels, estimated the dip in production value at 47 million baht a day, cutting the concession fees paid to the government by 26 million baht a day.
The dispute over Sor Por Kor land is also expected to further delay the 21st concession bidding for 29 petroleum blocks, as several of the blocks overlap Sor Por Kor land. The latest deadline for the bidding has been set for the end of this year.
Delays in the bidding could worsen the country's energy situation at a time when natural gas supplies in the Gulf of Thailand are depleting quickly. Natural gas comprises up to 70% of power-generating resources in Thailand, but the country has failed to license any more exploration of new gas blocks.
The business sector also voiced concerns that more suspensions would damage investment sentiment, which the country badly needs to sustain in order to support the economy.
Chen Namchaisiri, chairman of the Federation of Thai Industries (FTI), said private actors and government agencies should stop filing lawsuits against projects located on Sor Por Kor land because the actions have damaged the country's image and deterred foreign investors.
He said such lawsuits hurt economic recovery because the planned projects create massive value for the country.
"Thailand looks like a country that is never ready for new investment," Mr Chen said.
He said the government should look into other laws and regulations to prevent the land issue problem in the long term, ensuring that rules do not contradict one another.
Bowon Vongsinudom, vice-chairman of the FTI, said the federation is monitoring the newly promulgated City Plan Act to see whether it could have an adverse impact on business.
He said the new law has raised concerns that some businesses or factories could be forced to move if they are in violation of the Act.
"What if we are running our business as usual, and one day a new city plan says our factory is unlawful or is located in a residential area, not an industrial area?" Mr Bowon said. "Forcing us to move is not fair, and we need to seek a solution."