Rayong appeal discussed: PTT and SCG lead Map Ta Phut response
Bangkok Post 02 October 2009
The country's industrial giants gathered yesterday to discuss the court-ordered suspension of permits at Map Ta Phut and whether the private sector could petition the court to relax its orders.
Led by the two largest operators at the Rayong industrial estate – PTT group and Siam Cement Group – the companies discussed possible appeals with the Federation of Thai Industries (FTI). The government is already planning an appeal.
"The private sector, particularly big companies, have asked the government if the law will allow them to file petitions to request the court to delay its ruling's effective date," FTI chairman Santi Vilassakdanont said. "In the dispute - though it seems to be an argument between the government and activists - the sufferer is the business sector."
The Administrative Court on Tuesday suspended operating permits for 76 projects, based on Section 67 of the 2007 Constitution, which addresses the impact of industries on community health and the environment.
The FTI urged the government to seek a long-term solution that could allow investment and environmental conservation to coexist.
PTT, its subsidiaries and joint ventures have invested more than 120 billion baht in 25 projects, of a total 76 suspended, said Prasert Bunsumpun, president and chief executive of PTT.
The group will not be hurt as much as previously predicted if PTT's projects have to be delayed to comply with the court order, as most have yet to start construction, he said.
However, PTT's sixth gas separation plant and the olefins cracker of PTT Chemical Plc are heavily affected.
As a cracker is the upstream unit for petrochemicals, related industries would be short of domestic feedstocks and would require imported materials. SCG also has ongoing investments in a naphtha cracker and downstream plants under construction in the area.
"The whole country will see the impact – from the construction sector, creditors, employment, stakeholders and the stock market – not only the industrial sector will suffer," Mr Prasert said. "They have abided by the law since the beginning, so I don't think they will tolerate this."
Tevin Vongvanich, chief financial officer of PTT Plc, echoed Mr Prasert.
"The damage has happened already. Some projects designed to improve the environment are also affected," he said. "If it becomes clear that they don't want us to expand [in Map Ta Phut] anymore, we might have to look at other locations to place our investments in the future."
Surong Bualakula, a PTT senior executive vice-president for international business, said investor confidence had been shaken.
"The message perceived by investors abroad has made them panic. They [perhaps] don't know where Map Ta Phut is but it is actually the image of the country that has been hurt," he said.
Concerned parties should look at ways some projects can go ahead along with health impact assessments (HIA), he said. "We should find the balance for environmentally responsible industries to live together with communities."
According to the ministry, 11 projects out of 76 received environmental impact assessment (EIA) approvals before the 2007 Constitution took effect, so these projects worth 58 billion baht need not be suspended.
The remaining 65 projects include 47 expansions and 18 new investments, worth 229 billion baht in total.
Patareeya Benjapolchai, president of the Stock Exchange of Thailand, said the exchange hoped SET-listed PTT and SCG could resolve the matter. "I believe there will be a positive answer to it as the government sector is taking interest in solving the problem," she said.
The issue is expected to have an impact on foreign direct investment rather than on the foreign investors in the Thai stock market due to their diversified investment portfolios, she said.
PTT shares closed yesterday at 263 baht, up one baht, in trade worth 1.11 billion. SCC also rose one baht to 223.