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TDRI: EEC needs property returns

Institute advises commercial developments to capitalise and keep cash flowing

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The infrastructure projects in the government's Eastern Economic Corridor (EEC) scheme should add some commercial property projects such as mixed-use developments to increase return on investment and business flow, says the Thailand Development Research Institute (TDRI).

The corridor spans Chachoengsao, Chon Buri and Rayong provinces, where the property market is seeing more competition among Thai and foreign investors.

TDRI president Somkiat Tangkitvanich said related projects such as the 224-billion-baht high-speed railway linking three major airports should boost the volume of passengers using the transport system.

"The railway alone is not enough to draw further investment, and the project will record a loss if it relies only on transport fares," Mr Somkiat said. "The government should look for commercial and residential projects near the railway."

TDRI and the Japan External Trade Organization (Jetro) conducted a study of the EEC project as a part of the 20-year national strategic plan (2017-36).

The study found that the challenge of EEC-related infrastructure will be the net cost created under public-private partnership projects bundled with property management to attract investors.

Mr Somkiat said many train stations along the high-speed railway can be developed for commercial purposes, such as Makkasan in Bangkok and Sri Racha and Pattaya in Chon Buri.

"This project can create many business opportunities in the future, and the three main stations have sufficient potential for mixed-use projects," he said.

Daisuke Hiratsuka, president of Jetro's Bangkok research centre, said the government should consider developing stations along the high-speed railway in the EEC, in the manner of China's Shanghai, to increase the business value of commercial properties.

"The study found that transit-oriented property projects should be developed on a 25-rai area at Sri Racha station and a 150-rai area at Makkasan station," Mr Hiratsuka said. "The upgrade for the Pattaya station will also improve the tourism sector in Chon Buri."

Furthermore, Mr Somkiat said the government is making the right decision in developing the EEC because the previous scheme, special economic zones, has been slow to develop and SEZ locations alone are not attractive enough to draw investors.

He said the EEC should be expanded into other provinces on the back of improving economic fundamentals in surrounding areas.

"Under the 20-year national strategic plan, the EEC will raise GDP by 5% per year, but the TDRI expects GDP to grow by only 3% because there are many internal and external factors that the government cannot control," Mr Somkiat said.

The corridor will create benefits in some targeted industries such as tourism, smart cars, aviation and robotics, he said.

Mr Somkiat said Section 44 powers cannot be exercised by the new government to be voted in at next year's general election.

Thailand has a skilled-labour shortage for all 12 targeted industries, despite efforts to ease regulations through the smart visa scheme.

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