Gorging on state funds

21 06 2020

Reading the media the past couple of days and we feel like the regime, its ministers and its buddies are engaging in gluttony, seemingly gorging on state coffers.

One deal we posted on them recently got more press coverage:

The Eastern Economic Corridor (EEC) Office’s Eastern Special Development Zone Policy Committee yesterday signed the [290-billion-baht] deal with winning concessionaire, U-Tapao International Aviation Co, an offshoot of the BBS Joint Venture that won the bid to develop the “aeropolis” in Ban Chang district of Rayong Province….

…[T]he BBS Joint Venture comprises Bangkok Airways, which owns 45% of the shares, BTS Group Holdings which owns 35%, and Sino-Thai Engineering and Construction (STEC) which owns 20%.

So we can identify two conglomerates involving two of the countries wealthiest Sino-Thai tycoons – the Prasarttong-Osoth family at Bangkok Airways and the Kanjanapas clan at BTS. It was Forbes lister Prasert Prasattong-Osoth giving advice to Gen Prayuth Chan-ocha recently. It seems advice doesn’t come cheap. Then we have Sino-Thai Engineering and Construction:

Interesting. But what can we expect from people who are used to having with state officials in their pockets.

Then we saw that idea from convicted heroin smuggler and Deputy Agriculture Minister Thammanat Prompao for seizing land  illegally occupied by resorts and hotels, and then renting it back to them. Brilliant! Thammanat is already a baht billionaire and this looks like a surefire way to double money and pay for more of his big brother’s parliamentary seats and maybe even some watches. A Bangkok Post editorial commented that the scheme “is so outrageous that it should be dropped immediately…”.

And what about the news that the “Finance Ministry is ready to consider retail operators’ proposal for tax breaks on shopping to stimulate domestic spending…” with 50,000 baht per shopper! Now, who could that help most? We suggest it would throw shiploads of money into the big retailers, like the Chirathivat and Umpujh clans who are also Forbes listers.

It also potentially helps out the royal family and specifically Princess Sirindhorn, a member of the country’s wealthiest family that already scoops up billions in taxpayer funds. It was Chadatip Chutrakul, chief executive of majority royal-owned Siam Piwat Co, the operator of Siam Paragon, Siam Center and Iconsiam, that “said the government should come up with measures to compel people to leave the house and spend more.”

Happy to grab more loot

An academic once calculated that Princess Sirindhorn’s shareholding in Siam Piwat provided more than US$55 million per year from her property in the Siam-Ratchaprasong alone. She may be a bit short this year, so the state purse becomes a surrogate source of wealth.

Such “private” deals seem to be gathering pace under the virus crisis and rehabilitation plans. Recall how just a few weeks ago, the biggest of the business whales, multi-billionaire Dhanin Chearavanont was urging the regime to turn the country into a ‘safe haven’ for wealthy visitors.” His wish seems to be the regime’s command, with Tourism Minister Phiphat Ratchakitprakarn declaring that the “government’s tourism-revival strategy is to target big spenders seeking privacy and social distancing in the Covid-19 era, rather than try to attract a large number of visitors…. He added that the virus “provides an opportunity to reset the sector, which had become reliant on Chinese groups and backpackers…”. With 11 million Chinese tourists in 2019 and a total of almost 40 million, it seems there’s a determination to crush most of the industry and all that flows from it to every other part of the service sector, which before the virus accounted 46% of total employment and 57% of GDP.

And, these “private” deals are being institutionalized, with the regime reviving a Prem Tinsulanonda-era idea, agreeing with the private sector “to revive the Joint Public-Private Consultative Committee (JPPCC) as a core forum for the two to work together on solutions for the country’s social and economic rehabilitation after the pandemic.” That was first suggested a year ago but looks increasingly likely to become a processing terminal for turning state funds into private gains.

Finally, we may have missed the announcements, but it seems that the long-delayed contracts for the Sino-Thai high (probably medium) speed railway are being doled out. If the reporting is right, it suggests smoke-filled rooms and cosy deals. We quote the Bangkok Post:

SRT governor Niruj Maneepun yesterday told the media that Contract 2.3 is worth 50.6 billion baht, which includes funds for the railway system, rolling stocks and staff training….

The signing of the contract will be carried out in October as planned, Mr Niruj said.

Contract 2.3 is one of seven railway contracts worth a total of 179.4 billion baht for the Bangkok-Nong Khai High-Speed Train Project. Contract 2.3 would cover the project’s first phase, which is a 253-kilometre stretch from Bangkok to Nakhon Ratchasima….

The construction for the whole project has been ongoing since 2018 and it is expected to finish in 2023. [In fact, very little construction has occurred, apart from a very short section near Nakhon Ratchasima.]

So far, the SRT has said the project is making progress, noting it is finding contractors to develop all seven phases. It said a few have already agreed and signed some of the contracts.

That doesn’t look like open tendering, not that such systems stand in the way of the transfer of funds to private sector cronies and giant corporations.


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29 06 2020
The tycoons and the regime | Political Prisoners in Thailand

[…] mutual back-scratching between company, military and regime goes, but CP has done pretty darn well, soaking up state funds and helping itself. And there’s probably much more to […]

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