Govt to offer incentives to port investors

Govt to offer incentives to port investors

Change proposed to benefit-sharing ratio

Investors have so far shunned the military regime's plans for four new ports (red dots) but now are being offered more lucrative terms.
Investors have so far shunned the military regime's plans for four new ports (red dots) but now are being offered more lucrative terms.

Authorities are seeking approval from Deputy Prime Minister Somkid Jatusripitak for a new benefit-sharing arrangement between state and private sectors to give four river and sea ports shunned by investors a new lease on life.

Benefit-sharing proposals have not been attractive enough to draw private firms to invest in the four port projects. To increase the projects' appeal, the Marine and Treasury departments, which are directly connected to the projects, have agreed to reduce the state's portion of the benefit sharing arrangement.

"We're ready to call bids [for the projects] as soon as the new benefit-sharing scheme gets the green light sometime before the end of the year," said deputy Marine Department chief Nat Chubchai, referring to a resolution from the national committee on logistic services, chaired by Mr Somkid.

The scheme is believed to be a major part of the department's plan to encourage companies to pour investment into the Khlong Yai port in Trat, Sala Loi port in Ayutthaya, Khlong Wan port in Prachuap Khri Khan and Nakhon Phanom port in Nakhon Phanom.

The ports are built by the Marine Department while the revenue sharing calculation is the responsibility of the Treasury Department.

Previously, officials demanded a 50% cut of the ports' revenues be given to the government. However, the demand was deemed excessive by potential investors and not cost-effective.

Also, businesses were worried the remote locations of some of the ports would not make investment financially viable, according to Pol Lt Col Anuchat Thong-Aporn, chief of Marine Department's Planning Bureau.

The Treasury Department was aware of the problem and so it decided to substantially slash the government's share from 50% to 5%, plus an annual payment valued at 1.5% of the port's asset value, Treasury Department chief Patchara Anuntasilpa said earlier.

His department has told the Marine Department to adopt the new rate.

"We hope it should help solve the problem to some extent, reviving the abandoned ports and boosting revenues," Mr Patchara said.

The proposals by the Treasury Department mirror the Marine Department's ideas to improve the benefit-sharing scheme, Pol Lt Col Anuchat said.

The new rate should also attract companies to invest in port development -- 1.2 billion baht for Khlong Yai port in the East, 400 million baht for Sala Loi port in the Central Plains, 429 million baht for Khlong Wan port in the South and 200 million baht for Nakhon Phanom port in the Northeast, according to the Marine Department.

Of the four, the Khlong Yai port looks to have the biggest potential for commercial development as it is well-positioned to enable transport of freight along the eastern coastline, linking Thailand, Cambodia and Vietnam, Mr Nat said.

His department is also planning to revive some passenger piers which have been left unused because no operators wanted to run services.

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