Amidst a blurred picture after “Brexit”, the ruling junta government has moved fast to shift its focus to the “Eastern Economic Corridor” development project as the new key driver to shore up economic growth instead of the slow-paced high-speed train projects.
After British citizens voted to leave the European Union last week, no one knows what its impact on the world economy would be until the separation actually happens, which could take as much as two years.
There is full backing for the current efforts of Deputy Prime Minister Somkid Jartusripitak, who is in charge of economic affairs, to woo foreign investors to come to Thailand, as this might be the last engine to either drive or shore up the slowdown in economic growth.
During his five-day visit to China ending yesterday, Somkid addressed the government's five-year plan to develop the "Eastern Economic Corridor" project to Chinese investors with offer of "Super privileges" the following day after the project got the green light from the Cabinet on Tuesday. That's timely for him.
His mission in China follows his road show in Japan early in June. Under the plan, all preparations will be made for investors, from land plots and privileges to rules relaxation.
In his presentation to Chinese investors, Somkid said the government would set aside 26,000 rai of land in industrial estates, focusing on targeted industries such as biotech, biofuel, aviation, automation, IT and digital, medicine, and medical equipment.
For privileges, the government will offer the investors more corporate and personal income tax privileges, separate from the existing privileges offered by the Board of Investment.
Under the BOI's current privileges, investors in the special economic zone are allowed to waiver of corporate income tax for eight years and the right to lease land for 50 years with renewal of contract for another 50 years.
Some rules and regulations will be also relaxed to unlock obstacles to foreign investments in regard to city zoning and foreign shareholding limit of 49 per cent, especially in the aviation industry.
In addition, infrastructure projects concering rail, road, air, and marine transport will be under integration plan, comprising Laem Chabang's third-phase expansion, U-Tapao International Airport, U-Tapao deep-sea port, and Bangkok-Rayong high-speed train projects.
The total investment for these projects would be US$55 billion to $58 billion in total, or Bt2 trillion, Somkid said in China. It is not clear how Somkid arrived at these figures, as the eight-year infrastructure development plan announced by the government was worth Bt2 trillion.
As part of the "Eastern Economic Corridor" project, which is an initiative of the joint public-private working committee under the "Pracha Rath" scheme, the East-West Ferry development project is likely brand new. The project will link the East's Chon Buri province to the South's Phetchaburi.
Prime Minister Prayut Chan-o-cha has ordered the relevant agencies to speed up the project.
He wants the Chon Buri-Bangkok-Phetchaburi ferry project to be completed by 2018.
The fact is that the rail projects being built in cooperation with both China and Japan are unlikely to get off the ground as quickly as expected while the commercial seaports could happen in two or three years as the feasibility study is already complete.
One can only hope that the mega-investment projects under the East Economic Corridor plan don't turn out to be old wine in a new bottle.