NORTH / DEVELOPMENT OF BORDER AREAS

[suriya@xxxxxxxxxxxx]

October 4, 1998 							
								
    								


NORTH / DEVELOPMENT OF BORDER AREAS

Quadrangle schemes held up 
Vatana's business hits snags, tour boats stay idle for two years


Several multi-million-baht schemes in Chiang Rai which come under the
Quadrangle of Economic Cooperation Plan have been put on hold thanks to the
economic crisis.
The project to develop five towns in Thailand, Burma, China and Laos -
Chiang Rai, Chiang Mai, Kengtung, Jing Hong and Xieng Thong - was initiated
seven years ago.
It was supported by local and foreign investors and was designed to
encourage trade, tourism, hotel and property development.
However, with the recession several projects have been postponed or scrapped.
Among them were Prachakorn Thai MP Vatana Asavahame's projects. His
consortium wanted to build a port on the Mekong River in Chiang Rai, set up
a shopping complex, sell petrol to Burma and Laos, and establish a
conference centre in Doi Chan, a hotel in Mae Sai district and a shopping
complex and a housing estate in Mae Sai and Chiang Saen districts.
However, the group's tour boat business had financial problems and later
collapsed. Seven tour boats worth 35 million baht have stood idle for more
than two years.
The group and Chinese investors had also invested in a hotel-shopping
complex in Sipsong Panna in southern China but this was later scrapped.
The group now owes money to the Bangkok Bank of Commerce. The port and
shopping complexes have been abandoned and some of the real estate projects
sold.
Another important Thai investor, Witthawat International Company, co-owned
by Prasit Pothasuthon, the elder brother of Deputy Interior Minister
Praphat Pothasuthon, had planned to build a casino, a five-star hotel and a
shopping complex costing 1.5 billion baht in the Golden Triangle area.
However, the project was suspended even though it was 70-80 percent
complete, due to lack of capital.
Transport and tourism projects in Ton Phueng district, Khwaeng Bo Kaew of
Laos, and those involving political veteran Boontheng Thongsawasdi's aides
- entrepreneurs Pairoj Piampongsarn and Narong Wongwan - and the Chiang Rai
Ploy Daeng Plaza shopping complex project involving a gem dealers'
consortium led by Chanthaburi MP Thawatchai Arnampong, have also been hit.
Charoen Pokphand Group, Loxley Plc, Saha Union Group and several other
companies have also had to delay investments in China and Laos.
Nikhom Kalayasiri, director of the National Economic and Social Development
Board's Northern Development Centre, said the Quadrangle of Economic
Cooperation Plan was not going according to plan due to a lack of cash and
unity of purpose.
Laos wanted to develop basic infrastructure and exploit its natural
resources, while Burma had to solve political problems first. 
Beijing was not interested because Jing Hong and other areas in southern
China were so far from China's major cities.
He said little could be done unless the private sector helped out. 
Mr Nikhom said border trade between Thailand, Laos and Burma reached 4.4
billion baht in 1993, doubling to 10 billion baht in 1996. Despite the
downturn China could still prove to be an enormous market for Thai goods.
Democrat MP for Chiang Rai, Yongyudh Tiyapairat, said the Quadrangle of
Economic Cooperation Plan had failed because of the poor attitude among
Burmese and Laotian people towards Thai investors, Burma's internal
political problems, and China's strict customs and immigration procedures.
Chart Pattana MP for Lampang, Tharnthong Thongsawasdi, said trust was
needed among investors of different nationalities.
Maj-Gen Intharat Yodbangtoei, whose Golden Triangle Company has many
investment projects in Burma's Shan state, said most Thai investors in the
Quadrangle of Economic Cooperation Plan were, in reality, just brokers for
foreign investors.
Jirapa Kerdsompong, president of Lan Chang International Group which runs
transport and tour businesses between Thailand, Laos and China, said her
company had invested more than 200 million baht in businesses which were
having financial problems.
"It's like we have been abandoned by the government. The Chatichai
administration initiated the project and other governments focused on
investment but gave us little support," she said.
"The economic quadrangle investment projects are under the control of those
who only want to sell them. No real investments have been made," she added.
Ms Jirapa said her businesses had suffered from strict customs and
immigration procedures.
She said the real problems were not caused by Laos, Burma or China but by
the Thai government which had never supported the private sector or
coordinated investment projects.
Deputy chairman of Chiang Rai's chamber of commerce, Choosak Trisrisilp,
said most MPs in Chiang Rai belonged to the opposition so they did not have
the power to push projects forward.
The Quadrangle of Economic Cooperation Plan had been initiated by some
politicians intent on boosting their reputation and by business people keen
to profit from rising land prices in Chiang Rai, he added.
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Last Modified: Sun, Oct 4, 1998
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