Treasury Department moves to raise commercial rent

Treasury Department moves to raise commercial rent

The construction site for the special economic zone in Tak province. (Photo by Assawin Pinijwong)
The construction site for the special economic zone in Tak province. (Photo by Assawin Pinijwong)

The Treasury Department wants to raise the rent for land being used for commercial purposes to a 4% return on assets, up from 2-3% of ROA, to match the economic situation, the department chief says.

About 50,000 tenants rent state land from the Treasury Department for commercial purposes, said director-general Amnuay Preemonwong.

The department's revenue will rise from 7-8 billion baht if the rent is hiked, he said.

The new rent will not apply to those who rent state land for agricultural and residential use, to prevent low-income earners from suffering, Mr Amnuay said.

The department manages 12.5 million rai of state land and 400,000 rai is rented, of which 80-90% is used for farming and residential purposes.

The Treasury Department's overall revenue generated by rent represents a mere 1% of ROA, as most of the rent is derived from land for agricultural and residential uses.

The department inked a deal to rent 2,979 rai of land to Prom Phriang Builder Co to develop a special economic zone (SEZ) in Kanchanaburi province.

Under the 50-year rental agreement, the tenant will pay the rent and fees worth 78.6 million baht a year, well above the minimum requirement of 15.4 million.

The company will spend 420 million baht for basic infrastructure development and divide the land into eight areas: industrial use for electronics and plastic sector and distribution centres, hotel, logistics, commercial, residential and community, infrastructure and green area, and water and waste treatment.

The department will sign another rental agreement with Samakkee Land and House Co to develop an SEZ on 1,000 rai of land in Tak's Mae Sot on Nov 16.

Moreover, the Treasury Department will issue land auction envelopes for SEZ development in three provinces, Nakhon Phanom, Mukdahan and Nong Khai. The envelopes are available until Friday, and detailed proposals for projects must be submitted by Feb 15.

Four interested companies picked up bidding envelopes for 1,363 rai of state land in Nakhon Phanom, two bought envelopes for 1,081 rai in Mukdahan, and another four for Nong Khai.

The US-China tit-for-tat tariffs will encourage Chinese manufacturers to relocate their production bases to Asean countries, particularly Thailand, while rent for state land to develop SEZs is still low, Mr Amnuay said.

The government earlier dedicated 10 provinces for development into SEZs. They are Tak, Sa Kaeo, Songkhla, Trat, Mukdahan, Chiang Rai, Kanchanaburi, Narathiwat, Nakhon Phanom and Nong Khai.

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