Treasury: Observation tower will generate B47 billion
published : 30 Jun 2017 at 17:30
writer: Wichit Chantanusornsiri
The 4.62-billion-baht Bangkok observation tower project will draw more than a million tourists per year and generate 47 billion baht of tourism income during its 30-year project duration, said the chief of the Treasury Department which is supervising the project site.
While inspecting the four-rai plot in Klong San district, Bangkok, on Friday, Treasury director-general Patchara Anuntasilpa said researchers from Thammasat University found that the Treasury’s income from leasing the plot to a private developer for 30 years would show a loss of 600 million baht, but the tower would draw 1.1-1.4 million tourists annually.
Based on the assumption that the tower would make tourists stay a day longer and spend more in the country, the tower project would generate a return of 46.8 billion baht through the three-decade period, Mr Patchara said.
The tower is designed to be 459 metres high, with construction to take three years. It would be the tallest in Southeast Asia, the fourth tallest in Asia and the sixth tallest worldwide, he said.
There would be external elevators for sightseeing, and exhibitions on King Bhumibol’s sufficiency economy philosophy and working principles. Entry fees were set at 350 baht for Thai visitors and 700 baht for foreigners.
The cabinet allowed the Treasury Department to select a contractor without a bidding contest. The contractor would pay all the construction costs. The project already underwent an environmental impact assessment, Mr Patchara said.
For transparency, the department would scrutinise the project in accordance with the public-private joint venture law. Specialists from many organisations, including independent ones, would take part in the project's scrutiny, he said.
After completion, the Treasury Department would immediately assume ownership of the tower. The Bangkok Observation Tower Foundation, the contractor, would have the right to use the tower throughout the 30-year period.
Mr Patchara said that the market price of the land plot was 198 million baht, or 108,000 baht per square wah. It stands by the Chao Phraya River opposite Mandarin Oriental Hotel and has no road access. It is close to Soi Charoen Nakhon 7, but at present visitors must walk through a narrow alley.
The lack of easy access made the plot, less attractive, so the Treasury Department would ask an adjacent property owner for road access, Mr Patchara said, apparently referring to the developer of ICONSIAM commercial complex.
Sopon Pornchokchai, president of the Agency for Real Estate Affairs, said on Friday that although there was no access road, the plot was accessible from the Chao Phraya River and the Klong Phleng Canal, and its market price should be 300,000 baht per square wah.
The 30-year rent should be 211 million baht if it was set at three percent of the market price, he said, and the land price should be evaluated professionally before the signing of the contract. The contractor should share its profits from the tower project with the state, he added.
Registered in 2014, the Bangkok Observation Tower Foundation was originally chaired by Visit Malaisirirat, CEO of Magnolia Quality Development Corporation Co, the property development arm of Charoen Pokphand (CP) Group. The position was later assumed by former finance minister Panas Simasathien.
The foundation's directors include representatives from Siam Piwat Co, the operator of Siam Center and Siam Discovery.
Meanwhile, Magnolia, Siam Piwat and CP group are the joint developers of ICONSIAM, the mixed-use project by the Chao Phraya River scheduled to launch by the end of this year.
Treasury Department officials show the media where Bangkok's observatory tower will be built. (Video by Apichart Jinakul)