The Board of Investment (BOI) Secretary-General, Mr. Narit Therdsatheerasak, confirmed that Asia Era One Co., Ltd. (CP) has reapplied for investment incentives for the high-speed rail project connecting Don Mueang, Suvarnabhumi, and U-Tapao airports. The proposed investment package is valued at 160 billion baht.
The BOI has informed CP that this new application can be processed once the contract for the project has been amended. The State Railway of Thailand (SRT) and the Eastern Economic Corridor (EEC) Policy Committee have agreed to remove previous conditions for investment promotion, necessitating the contract revision.
The BOI requires the contract amendment process to be approved by the EEC Board and the Cabinet before the investment application can proceed. CP has agreed to this procedure.
Mr. Narit anticipates that the review of this new investment package will be expedited and completed within the year. The absence of restrictive conditions in the revised contract will streamline the process. Incentives can be granted even if construction has commenced.
The EEC Board meeting on June 10, 2024 acknowledged the progress of this project and three other public-private partnership (PPP) infrastructure projects in the EEC. Specifics on resolving the high-speed rail project's issues will be presented at a subsequent meeting, expected in late June or early July 2024.
These details will include revisions to the payment method for the state's 119.425 billion baht co-investment, the introduction of a bank guarantee for construction costs, and adjustments to the royalty payment structure.
Construction Sector Bracing for Impact from Real Estate Slowdown Source: Tun Hoon
Friday, June 14, 2024, 05:38
Tun Hoon - The TTB Analytics Economic Analysis Center views the construction industry as an economically significant sector. In 2023, total construction value reached 1.37 trillion baht, accounting for 7% of GDP. Construction activities serve as economic indicators due to their derived demand nature, responding to real business sector demand. This includes private residential construction supporting housing needs in various areas, as well as office buildings and shopping centers for business purposes. However, Thailands recent economic constraints have kept GDP in 2023 below the 2019 level, reducing purchasing power and consumer confidence. This has lessened the demand for long-term financial burdens like housing. Slow economic growth may also diminish trade and investment flows, which are crucial for commercial real estate construction demand. Consequently, private construction faces pressure, and combined with challenges in public sector project disbursements, the overall construction value in 2024 is projected to decrease by 2.7% to 1.34 trillion baht. Details are as follows:
Private Construction: In 2024, private construction is expected to shrink by 4.9%, driven by declining commercial construction, such as large mixed-use projects and office buildings that sustained the market in the past 2-3 years. With many structural projects nearing completion, investment in construction is reducing compared to the previous year. The occupancy rate has also fallen to 78% in 2023 from 90% in 2019, likely slowing new office building construction. The housing market is predicted to contract for the second consecutive year in 2024 due to weak demand. Buyers face difficulties in accessing credit and lack sufficient savings, while supply side issues include high construction costs and sunk costs in unsold projects, leading to a slowdown in residential construction.
Public Sector Construction: 2024 is expected to be challenging due to a 53.5% drop in disbursements in the first four months compared to the previous year. Major projects, like Phase 1 of the dual-track railway with a total construction value of 124.074 billion baht, have completed structural phases. New infrastructure projects, such as the high-speed railway connecting three airports worth 222.544 billion baht, are still in contract revision stages. Without clear progress, and with road transport projects seeing a 65% reduction in disbursements, public construction is anticipated to slow by 1%, marking a three-year consecutive slowdown.
2025 Real Estate Outlook: TTB Analytics predicts continued pressure on the construction industry, with private sector demand for residential and commercial real estate remaining weak. Public sector disbursement constraints, due to public debt reaching 63.8% of GDP, are likely to rise, with deficit budgets extending to 2030 potentially pushing public debt close to the 70% GDP ceiling. This could affect new investments reliant on loans. Thus, TTB Analytics suggests the following strategies for the Thai construction sector:
1. Promote tangible economic growth** to boost purchasing power and consumer confidence, reviving housing demand. Economic growth also attracts foreign investment, crucial for technology transfer and related business development.
2. Prioritize budget allocation for critical projects, considering the high public debt to GDP ratio and deficit budgets until 2030. The government should focus on infrastructure development and economic stimulus projects, ensuring efficiency and value, while continuously reducing non-essential investment expenditures.
Source: TTB Analytics Economic Analysis Center
Source: Tun Hoon newspaper, June 14, 2024 edition.
Piers are ready! | High-speed rail section Khlong Phutsa, Contract 4-3, Thai-Chinese high-speed rail, latest update
Nanny Official
June 15, 2024
The construction of the Thai-Chinese high-speed rail in the Khlong Phutsa area, Krasan Subdistrict, Bang Pa-in District, Phra Nakhon Si Ayutthaya Province, is under construction contract 4-3. This section, spanning from Nava Nakhon to Ban Pho, consists of elevated structures throughout the entire 23-kilometer (approximately 14-mile) distance. The project, valued at 11,525 million baht, is being executed by the CS-NWR-AS Joint Venture. Currently, the construction progress is about 21.30%.
พาชมความคืบหน้า♂️เส้นทางรถไฟความเร็วสูง สัญญา 4-7 สระบุรี-แก่งคอย #รถไฟความเร็วสูง #ประเทศไทย
Kowitchanel47
Jun 16, 2024
Have you seen it yet? | The construction site for the entrance to the Chiang Rak Noi maintenance center on the Kanchanaphisek Road side #ThaiChineseHighSpeedRail
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