Tap water supplies have gone up rapidly in recent years in lock-step with growing demand of 10-15 per cent yearly in Luang Prabang. This compares with 3 per cent annual growth in large Thai cities, says Pira Intaratood, managing director of Asia Infrastructure Management (Thailand) Ltd. AIM has won concession from the local government to supply tap water to the city.

AIM has joined with Water Solution Co to set up Asia Nampapa Luangprabang Co (ALP) to operate a water facility, and has sold tap water to the Laos authority since December 2013. It has a 30-year concession contract from the local government.

Thoresen Thai Agencies Pcl (TTA) acquired 80.5 per cent of the AIM shares last year as it injected fresh funding to expand investment in Laos. TTA’s share price was quoted at Bt6.05 yesterday morning, down by 0.82 per cent. Luang Prabang is the most popular tourist destination in Laos and the ancient city, a Unesco World Heritage Site, has expanded rapidly due to the visitor boom. The construction of a high-speed rail linking southern China to Vientiane has also led to fast-growing residential units, hotels and related activities.

The ALP water plant now supplies about 15,000 cubic metres daily and could expand its water production capacity to 50,000 cubic metres per day, said Pira. He expected the company would soon expand its production to meet rising demand. Once the high-speed rail service commences in the next two years, the station will need more water supply, he said. The company also plans to invest in a new facility around Luang Prabang and in a major city such as Champasak, a province in southern Laos, he added.

He said it was difficult to get a long-term contract from Laos authorities. Once his company has proved that its business would benefit consumers, new projects would be much easier to start, he said. “Our long-term contract for supplying tap water to commercial areas and residents has become a new model for the local governments in Laos,” said Pira.

“Initially, financing is an obstacle for small-scale Thai investors. When I started the project, every bank in Thailand and Laos rejected our proposal, only Export-Import Bank of Thailand agreed to lend then,” he said.

Exim Bank loaned about Bt70 million for the project initially. The investment in the whole project is about Bt250 million. Return on investment in the clean water supply project is about 15-18 per cent, compared with 25-30 per cent returns in electricity projects in Laos. “The investment return is quite high even though it is not as high as the electricity supply project,” said Pira.

Pisit Serewiwattana, the president of Exim Bank, said the bank would continue to support the company’s future projects. The company has met its loan repayment commitments over the past five years, he said.

Exim Bank opened its representative office in Vientiane last week and plans to open more in Phnom Penh early next year. Exim Bank has long been engaging in lending to support Thailand’s investments in Laos and exports to Laos. “The bank has so far approved financial facilities for investment projects in Laos worth more than Bt30 billion in total,” said Pisit.

Meanwhile, Finance Minister Apisak Tantivorawong said the ministry would allow its Lao counterparts to raise funds in Thailand by issuing baht-dominated bonds due to large liquidity in the Thai market and promising investment opportunities in Laos. Eight baht-denominated bonds worth Bt45.7 billion in total have been issued by the Laos government between 2013 and 2018.

Some villagers living in the proposed project area and near the road link to Thailand shared their frustrations at the launch of a report by EarthRights International entitled, “Communities in the balance: local voices and prospects for the Dawei SEZ” last Thursday.

“We once had high hopes for the project, but now they are all gone. We will be more than happy to welcome the project if it is resumed, but it should come up with a good result rather than beautiful words that are not realistic at all,” said Than Shein, who lives in Payadard Village a part of the proposed site for the Dawei SEZ.

He said the lives of those living in the six villages where the first phase of the project were to be implemented is even worse than during the term of the previous government.

“We have nothing. Road infrastructure is really bad, and we do not have access to electricity. What is worse, there are no job opportunities here. We have been left far behind other townships in Tanintharyi region,” he said.

He admitted that the majority of the households in the village had to entirely depend on the income of their young family members who are now working in Thailand due to lack of jobs in Dawei. “More than 90 per cent of the people here strongly support the Dawei SEZ because they believe it will create a number of jobs for locals. We demand that the authorities make it happen for the sake of the locals,” he said.

Saw Keh Doh of Thabyuchaung village stressed the importance of transparency, accountability and responsibility in every single effort to revive the project that has been in the pipeline for a decade.

“We need accurate information and reliable updates about this project,” he said.

He urged the regional authorities to engage with locals, particularly the grass-roots people living in the project area.

“Ministers usually meet with a selected group of people such as township administrators and village heads. Actually, they need to talk to vulnerable groups like us. We can see that the government wants to resume the project soon but they do not publicise any updated information to us. How can we accept the project without any public discussions?” he questioned.

“At an earlier meeting, we raised some questions with the authorities on how the project would be implemented, how long it would take, what benefits it would bring us as well as our country.

But we have not received any clear-cut answers yet,” he said.

Than Shein of Payadut village considered a reasonable compensation and concrete plans for sustainability of locals’ lives as the best solution to address public worries. He also called for stronger legislation with regard to land possession.

Po Win of the same village shared a similar view. She demanded better transportation and affordable access to electricity, as villagers now have very limited access to electricity at an expensive rate of 900 kyats (Bt19) per unit.

Relocation concerns

She also raised concerns about relocation and resettlement if the project were to be resumed.

“We do not know exactly where we will be relocated and whether or not things will be the same as our current life. We are also worried about whether or not we will be able to survive in the way that we are used to as farmers,” she said.

In light of the locals’ concerns, the report mainly focuses on four key areas of research – information access, livelihood, employment and gender. According to the findings, locals’ expectations include improving access to information, transparent and fair compensation, creating jobs and infrastructure investment, inclusive cooperation and no relocation without better quality of life, said Bo Bo Aung, Myanmar campaign adviser at EarthRights International.

“It has been 10 years since the plan for the Dawei SEZ was announced. A lot of problems remain unsolved and the communities have been suffering from uncertainty and worries for a decade,” he said.

He said such problems must be solved and remedies found whether the project proceeds or not. He urged the authorities to respect the local communities’ views, stressing the importance of a transparent process of compensation and relocation.

“The locals have doubts about whether or not the SEZ really benefits the community. There is some evidence that the project may worsen the insecurity of locals’ livelihoods. And it is possible to achieve those things without the SEZ at all,” he said.

Thant Zin, director of Dawei Development Association, said the report aims to learn how the villagers see the SEZ and what it means for their livelihoods.

He added all the key stakeholders including authorities from Myanmar and Thailand, developer Italian-Thai Development Co, and potential investors should know more about the locals’ views on the project so that the project can achieve success, if it were resumed.

“For a mega-project to be successful, the most important thing is to listen to the locals’ voices. We have done similar research in 2011 and 2013. It is vital to understand diverse ideas, opinions, hopes, and concerns of those whom the SEZ will most directly affect,” he said.

Myanmar’s National League for Democracy government should not repeat the mistakes of the previous administration, he warned.

For the Thailand 4.0 policy to effectively push for digital transformation, Thai manufacturers will need to first improve the skills of their workforce,” said Karel Eloot, senior partner of McKinsey & Company, during an exclusive interview with The Nation.

The Thailand 4.0 policy is intended to modernise the Thai economy by promoting technologically driven industries. The development of the EEC region is a materialisation of the Thailand 4.0 policy where the government aims to turn the three provinces of Chon Buri, Chachoengsao and Rayong into special economic zones.

“Reskilling will be needed for the existing workers. We have identified up to 7 million employees in Thailand who will need to be reskilled in order for companies to digitally transform,” he said.

The reskilling is needed because digital transformation will mean new roles and jobs will be created while old ones will be made obsolete, Eloot explained.

“For example, employees will need to work on automated processes that did not previously exist, or work with data analytics, which the company may not have employed before the transformation,” he continued.

“As for the EEC region, there will be a shortage of skilled labour. The government has taken steps to address these issues, but there is more to be done,” said Somkiat Tangkitvanich, president of the Thailand Development Research Institute (TDRI), at a separate seminar on the EEC and Thailand 4.0 policy last Friday.

“The Thai Ministry of Education has been working with the Japanese KOSEN system, a unique training system, which produces high-quality engineers,” he said.

The Thai government is also wooing Western universities to set up campuses in Thailand, some of which have already done so such as Carnegie Mellon University. The government is currently in negotiations with the National Taiwan University for the university to set up a campus in the Kingdom, according to Somkiat.

Another method the government has implemented to increase the number of skilled workers in the country is providing Smart Visas, aimed at allowing foreign skilled workers and investors to enter the EEC region with more convenience.

However, Somkiat revealed that this policy has had limited success.

“The Smart Visa programme has not been much utilised. There are only about 20 to 30 people who have come into Thailand using the Smart Visas so far. Hence the Board of Investment of Thailand (BOI) is expected to loosen the requirements of Smart Visas to attract more foreign skilled workers,” he said.

Eloot concurred, suggesting that foreign skilled workers alone will not suffice to address the shortage of skilled labour. He stated that the Smart Visas programme would have to go hand in hand with the reskilling of the existing workforce.

Apart from increasing the number of skilled labour, the Thai government should also be making “smart investments” in the EEC region, Somkiat said.

“In trying to attract foreign investment to the region, the Thai government should focus less on super-generous tax incentives and instead invest in services that improve the processes investors have to go through in order to invest in the EEC region” he continued.

In order to generate one job, the Thai government would have to invest as much as Bt5 billion per year in terms of tax revenue reduction from the super-generous tax incentives, according to a study conducted by the TDRI.

Alternatively, the Thai government should make the process of investing in Thailand more convenient for foreign investors such as by creating a one-stop service for foreign investors who are looking to invest in the region, Somkiat suggested.

“The Thai government should be making “smart investments” instead of focusing on the total volume of investments. They should make sure that the investments actually increase the technical and innovative capabilities of manufacturers in the EEC region,” he added.

In the first nine months of this year, Bt230.55 billion has been invested in the EEC, an increase of up to 117 per cent compared to the same period last year. The BOI maintains a total investment target in the EEC of Bt300 billion by the end of 2018, according to BOI secretary-general Duangjai Asawachintachit.

Minister Apisak Tantivorawong said it had been proposed about five months ago that the 14.5 million welfare-card holders be given free SIM cards for six months so that poor farmers could access market prices in real time.

But the NBTC, which would have to pay for the programme, was still considering the idea, Apisak said.

He believed it should be approved since the NBTC gathers revenue from telecom operators.

If the NBTC agrees, the proposal would be forwarded to the Cabinet.