News from Thailand – July 18, 2013

Reporters now know how millers and rice warehouse managers replace good rice with bad rice and take twice the money for the good rice.

MPs from the opposition Democrats demonstrated this on the basis of a video and a scale model in Government House yesterday.

They receive money twice for the good rice: the first time because they have already been paid by the government for the mortgaged rice and the second time because they sell the rice to other traders.

The good rice comes from the middle of a pile of rice sacks (see infographic), so that inspectors who walk alone along the pile do not notice anything. The emptied space is filled with identical bags of lower quality rice.

– The mother of recruit Wichian Puaksom, who died in June 2011 after being beaten in a military camp in Narathiwat, accepts the 7 million baht compensation offered by the government, but refuses to withdraw her complaint against the nine alleged perpetrators . The woman had demanded 14 million baht from three government departments.

Wichian was beaten by thirteen soldiers as punishment for refusing orders and deserting. Hailing from Songkhla, the ex-monk, who had a master's degree, had asked to serve in the South when recruited in May 2011. He died in hospital from his injuries.

The Human Rights Commission, which investigated the beating, says he was beaten for two consecutive days and denied medical care.

- A father's accusation that his son was traded for Prime Minister Yingluck's son to escort a Chelsea player yesterday (see News from Thailand yesterday) may well be true, as Yingluck's son Supasek 'Nong Pike' Amornchat accompanied at Rajamangala stadium Chelsea captain John Terry. A photo inside Bangkok Post serves as evidence. [But that photo is only in the newspaper, not on the website.]

– Homesickness was the reason why former Prime Minister Thaksin talked to another man in the leaked audio clip on YouTube about a way, say conspiracy, to get an amnesty so that he can return to Thailand. Son Panthongtae gave that statement after returning from Beijing, where he had discussed the clip with his father.

Panthongtae says Thaksin misses his family and compatriots. Although he has not yet admitted it himself, the other man is the current Secretary of Defense. The interview took place a week before he was appointed. They discussed the possibility that the military top would ask the cabinet to grant Thaksin an amnesty, in exchange for allowing them to stay on.

– Another fuss about a video on YouTube, this time with images of Prime Minister Yingluck and army commander Prayuth Chan-ocha, while the love song SongRoa (both of us) sounds. The army threatens the makers with a lawsuit.

– 'Jet-set' ex-monk Wirapol Sukphol appears to have visited the Cessna Aircraft Company in Kansas in 2011 to look at a CJ4 and a Cessna Grand Caravan turboprop, which he had set his sights on. According to industry insiders, writes Bangkok Post. The then-monk wanted to have his own aircraft, after flying several times in a chartered aircraft in Thailand and traveling to neighboring countries.

The monk reportedly made more than 20 flights in the past few years, each costing 250.000 baht. According to sources [there it is again], the monk said that money was no object and that he wanted to pay in cash, the same method of payment as for his charter flights.

An arrest warrant has now been issued against the monk. An attempt is being made to have his passport revoked so that he can be extradited by the US. He is said to be currently staying in his own villa in California.

– The case of the 'jet-set' monk who has enriched himself has not even been completed before another scandal arises. The National Anti-Corruption Commission (NACC) is investigating 'donations' of 800 million baht given by Samut Prakan provincial authorities to temples. For the past three years, that money came from the budget of the PAO (say the province).

The Court of Audit previously conducted a preliminary investigation, but it has now transferred the case to the NACC. The money had been given by the temples to contractors for the construction of new buildings on the same day they received the donations. One contractor was hired by almost all temples and collected the PAO money.

– More than 80 percent of foreign workers in Tak province are not insured for health insurance because they are not formally employed by an employer. As a result, the financial burden on health care institutions has increased significantly over the past 5 years, from 89 million baht in 2008 to 112 million baht last year. Hospitals feel obliged on humanitarian grounds to provide medical care without charging patients who cannot pay.

– There is still little progress in the investigation into the collapse of a bridge in Tha Rua (Ayutthaya), which killed four people and injured 23 others. Yesterday, victims, their families and relatives protested in front of the Province House and expressed their displeasure. The bridge collapsed in April because a cable failed. The police have not yet coughed up an explanation for this. The police say they will announce on July 26 who they think they will prosecute.

– The police in Kalasin intercepted a transport with 90 dogs on Tuesday evening and rescued the animals from a Vietnamese food plate. The driver and co-driver have been arrested. The dogs have been taken to a quarantine facility in Nakhon Phanom.

– The president of the Constitutional Court, who announced his resignation on August 1, is working on a book about his experiences. Under the title A Judge's Life it will appear in three months. Wasan Soypisudh is stepping down because he had said when he took office that he wanted to hold the position for two years. He also retires as a judge. The Senate selects a new judge and the Court elects a new president from among its members.

– Siam Grains Co has withdrawn the rice brand Co-co (pimpa white rice) from sale by order of the Food and Drug Administration (FDA). An investigation by the Foundation for Consumers (FFC) found that this brand contained a dangerous concentration of methyl bromide – that is, the sample under investigation.

The company, which packs co-co with Sathian Rungruang Marketing Co, has also suspended delivery of 9.000 packs pending further investigation. Of those, 3.000 are of the Co-co brand and the rest are other varieties.

The director sees two possible scenarios: too much methyl bromide has been used or the rice has been distributed prematurely. The company promises to switch from methyl bromide to phosphine, which evaporates more quickly. The gases are used to control pests.

The FDA inspected Co-co's rice mill on Bang Na-Trat Rd yesterday and took samples. According to the FDA secretary general, the brand was previously safe in its own research.

Prime Minister Yingluck also contributed to the FFC's investigation yesterday, but I will not mention that. She again spoke the familiar soothing words and called on the parties involved to work together. [See also 'Consumer organization survey: Packaged rice smells', Thailandblog, July 17.]

– Businessman Chaichana Mai-ngan from Sa Kaeo, who was kidnapped on July 1, is dead, the fourth suspect arrested on Tuesday night has admitted. [I did not come across the arrest of the third suspect on Sunday.] The 67-year-old clothing merchant was kidnapped after leaving the Rong Kluea market in Aranyaprathet in his white Nissan Navara. The victim's body was burned. Police have found human remains in a eucalyptus plantation in Tambon Thachang.

Police believe it may have been a murder-for-hire. Chaichana was a staunch supporter of the People's Alliance for Democracy (Yellow Shirts) and had a conflict with a businessman who operates a casino in Poi Pet, Cambodia.

– The Department of Pollution Control (DPC) is determined to punish all officials involved in corruption during the construction of the Klong Dan Wastewater Treatment Plant in Samut Prakan. Complicated case: two ministers were involved, one of whom died and the other fled, fourteen civil servants and sixteen employees of seven companies. A DPC panel is now reviewing a 600-page report from the National Anti-Corruption Commission, so it's going to take some time.

Economic news

– The Thai Chamber of Commerce supports the government's intention to borrow 2 trillion baht for infrastructure works. But she urges to listen to the population and to carry out environmental impact assessments (EIA).

President Isara Vongkusolkit points out that Thailand's land transport costs are currently relatively high. Total transportation costs amount to 15,2 percent of gross domestic product or 1,75 trillion baht; land transport accounts for 86 percent, water transport 12 percent, rail transport 2 percent and air transport 0,02 percent. The average cost by land is 1,72 baht per ton per kilometer, by rail 93 satang and by water 64 satang.

In addition to EIAs, the House is also calling for a study into return on investment, a capital investment analysis and a list of benefits if the government pushes ahead with its controversial plans for high-speed rail across the country.

Vice-chairman Phumin Harinsut calls the 2-trillion proposal of great importance for the country's logistics strategy and economic development. But he also raises a warning: be careful with each project and make sure it maximizes benefits, increases the country's competitiveness and promotes social equality. Phumin is concerned about the transparency of plans, management and implementation.

The House believes that doubling the track is the most important priority for the infrastructure works. This investment benefits both freight transport and passenger transport. The proposed high-speed lines should connect to the rail network in neighboring countries so that they are useful for future economic growth.

Finally, the House advocates an independent body that will manage the budget and a supervisory body that monitors the spending of the funds.

– The government should accept that the economic growth forecast of 4 percent is an ambitious target and should ignore calls from business people for stimulus measures, says Sakon Varanyuwatana, lecturer in economics at Thammasat University.

To achieve that 4 percent, he calculates, 65,6 billion baht is needed. "Under the current circumstances, that target is extremely ambitious." The 2013 budget assumes 450 billion baht in expenditure; to reach 4 percent, 516 billion baht would have to be invested.

Sakon thinks growth in the second half of the year will be lower than in the first half. Since the first quarter, consumption, private investment and the industrial index have fallen dramatically. Of the four economic machines, only public spending works properly; the other three, domestic spending, investment and exports, are all weak and getting weaker.

Sakon has no confidence in populist policies. It only helps in the short term; more populist measures will further push up household debt, which is already too high. Minister Kittiratt Na-ranong (Finance) also recently called a stimulus package unnecessary. The country can grow on its own, according to the minister.

– A windfall for the government in the first car program. It was estimated that the program would cost 90 billion baht in tax refunds, but it is likely to be 78 billion baht, says Somchai Pulsawas, director general of the tax authorities.

A total of 1,25 million cars were purchased. The final sales figures showed that more pickup trucks were purchased than estimated and the tax refunds on those trucks are lower than those on passenger cars. 260.000 were pickup trucks and 259.000 were double-cab trucks. 1,04 million people have now received their car; 209.578 are still waiting for delivery. 319.975 persons have received a refund of the tax paid; a total of 21,9 billion baht. The tax is paid after one year.

The tax authorities have filed a claim against 19 persons for violating the conditions. One of these is that the car must remain in the possession of the first owner for 5 years. 750 applications were denied because the applicants had previously owned a car.

– State-owned Bangchak Petroleum Plc (BCP) is adding rooftop solar cells to its alternative energy sources so it can generate more green power to sell to utilities. BCP may be renting space on private buildings to install panels and buy the energy from the owners.

BCP built the first solar power plant in 2008 when the price of crude oil skyrocketed. The first had a capacity of 68 MW. A second one with a capacity of 50 MW will be added at the end of the year. The total capacity of 118 MW is sold to electricity suppliers. BCP aims to have a capacity of 2020 MW by 500.

The problem is that the Ministry of Energy no longer grants new permits. There are applications for 3.000 MW, while the ministry has set a target of 2.000 MW. BCP is therefore thinking of setting up a new company to get more green energy.

– In the second half of this year, Tisco Bank will put a brake on lending for second-hand cars. The bank does this because the percentage of NPLs (non-performing loans) rose from 1,31 to 1,45 percent of outstanding loans in the first half of the year and this percentage is expected to rise further to 1,5 percent . Used car prices have fallen sharply due to the first-car program and the subsidies on eco-cars.

Tisco Bank recently required a higher down payment on loans for used cars: 20 instead of 10 percent of the appraisal value. The appraisal value has been reduced to 70-75 percent of the market price from 80-90 percent previously.

– NatureWork, the world's largest producer of bioplastic, wants to build a second factory in Asia, but that will probably pass Thailand by. In Malaysia, the company can benefit from better government subsidies and tax exemptions. Although Thailand has the advantage of a varied and wide range of raw materials, these advantages do not outweigh the costs. A spokesman for the company says Thailand's Board of Investment is not very flexible. The regional office of Nature Work will be located in Thailand.

– Thailand wants to make its first clothing from PLA fibers within six months. To this end, a joint venture is formed between the National Innovation Agency (NIA), the Thailand Textile Institute and textile factories. The NIA aims to make Thailand a regional bioplastic hub. It starts with clothing; in the long term, the research will be extended to home textiles.

PLA fibers are less durable than polyester, but more environmentally friendly. The fiber is now three times as expensive as polyester and 2,5 times as expensive as cotton. In the Thai textile industry, polyester is the most important raw material (42,8 pc), followed by cotton (34,1 pc) and other materials such as nylon, acrylic and polypropylene.

– The new Commerce Minister, Niwatthamrong Bunsongphaisan, admits that the rice mortgage system is plagued by irregularities and corruption. He is therefore in favor of placing microchips in rice sacks with an accompanying technology that allows stocks to be monitored in real time.

The Public Warehouse Organization (PWO) and the Marketing Organization for Farmers, the two organizations that manage the mortgaged rice, have been asked to conduct a feasibility study and calculate the costs. PWO president Chanudpakorn Vongseenin estimates the cost at least 100 million baht. When the mortgage system came into effect in 2011, the PWO was given a budget of 88 million baht to install an IT system to monitor the rice. With a microchip, the rice can be followed throughout the entire process.

www.dickvanderlugt.nl – Source: Bangkok Post