Starting on Monday, the Yingluck government will try to find Bt80 billion - 10 per cent of total fiscal expenditure - for post-flood rehabilitation, as more residences and industrial plants fall victim to flooding, deepening concern in the foreign business community.
The long-term impact of the floods on foreign investment will depend on the government's relief measures and the steps it takes to mitigate future disasters, investors said.The Japan External Trade Organisation (Jetro) and the Japanese Chamber of Commerce yesterday urged the government to quickly drain water from flooded industrial sites.
Jetro president Setsuo Iuchi said investor confidence depended on many factors. If the government shows it can handle the flood crisis and no more industrial zones are hit, foreign investors could be persuaded to keep their production bases in the Kingdom, he said. He urged the government to boost measures to save industries from flooding and to provide updated information on the crisis in English.
The Finance Ministry this week estimated the damage at Bt80 billion, while estimates from private economic houses ranged from Bt80 billion to Bt157 billion, which could shave as much as 1.5 per cent off 2011 economic growth.
Industry Minister Wannarat Charnnukul said yesterday that the government is closely monitoring the situation at the Bang Pa-In Industrial Estate in Ayutthaya, Pathum Thani's Nava Nakorn Industrial Estate and Bang Kradi Industrial Park. Bang Pa-In has 89 factories with 27,000 employees.
Meanwhile, Wannarat was concerned over possible leakage of hazardous materials.
Over 400 factories at Rojana Industrial Park and Saha Rattana Nakorn Industrial Estate are submerged and 143 factories in Hi-Tech Industrial Estate, which employs 51,186 workers, are at risk. At press time, rescue efforts were underway at Hi-Tech, where the water was 50cm deep. As these house mainly automotive and electronic-parts manufacturing plants, supply chain disruption has prompted concern over Thai exports. Automotive and electronics exports account for over 20 per cent of Thailand's total exports.
Deputy Prime Minister Kittiratt Na-Ranong was visibly upset, shedding tears as he expressed regret to executives of auto-parts maker Aapico Hitech, whose plant is flooded.
Though its two plants in Thailand are unaffected, Seagate Thailand admitted that its hard-drive supply would be hurt in the fourth quarter due to supply disruptions.
Representatives of Canon, in an interview with Bloomberg, said the firm is considering shifting ink-jet production to Vietnam.
Piangjai Kaewsuwan, vice president for government relations at Nissan Motor (Thailand), said Nissan's assembly plant at Bangna-Trat Road km 12 has gradually reduced its production capacity due to supply disruption, and might have to suspend production altogether.
Piangjai said suppliers should be able to resume production within three months, if the water retreats next week.
Toyota Motor Thailand and Honda Automobile (Thailand) have suspended production altogether. Ford Operations (Thailand) yesterday resumed one shift of production after a temporary suspension on October 10, said government affairs director Arnupab Tadpitakkul.
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Ref: The Nation
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