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Thai Court to Decide Fate of 76 Halted Industrial Projects

Sept. 2 (Bloomberg) -- A Thai court will decide today whether 76 industrial projects halted last year because of pollution and licensing concerns can restart, a ruling that may resolve uncertainties over the nation’s investment regulations.

The Administrative Court will begin delivering its ruling at 2 p.m. in Bangkok, it said in a statement.

The projects were halted last year after environmental groups and residents complained about pollution levels and the lack of consultation on new investments at Map Ta Phut, the nation’s largest industrial port. Petrochemical, refinery and power projects in the area underpin manufacturing and exports that account for about 60 percent of Thailand’s economic output.

“If most projects can move ahead, it will improve investment sentiment and help sustain the recovery in domestic investments,” said Usara Wilaipich, an economist at Standard Chartered Plc in Bangkok. It may also ease concerns over policy uncertainty, she said.

The industry ministry in January said the stoppage may cause losses of 600 billion baht ($19.2 billion). The most-affected companies include PTT Pcl, Thailand’s biggest by market value, and Siam Cement Pcl, the third largest.

“If most projects remain frozen, it will probably slash gross domestic product growth by 0.5 percentage point and business sentiment will be dampened,” Usara said before the court ruling.

The case is the first to test Article 67 of the 2007 constitution drafted by a military-appointed committee, which bans all projects that aren’t backed by environment and health studies and public consultation.

Dow Chemical, BlueScope Steel

The Administrative Court issued an injunction in September last year, pending today’s verdict, to halt work on 76 projects with a combined value of 400 billion baht because the government didn’t create a body to evaluate their effect on public health.

The projects, mostly in the Map Ta Phut industrial estate, 220 kilometers (137 miles) east of Bangkok, include plants owned by Dow Chemical Co., the largest U.S. chemicals maker, BlueScope Steel Ltd., Australia’s largest steelmaker, and 25 facilities planned by PTT. Some projects were allowed to proceed after operators showed evidence they didn’t breach constitutional requirements.

Thailand’s government has sought to limit the economic damage of the stoppage as the country emerges from recession.

Since the projects were halted, the government has approved several changes to environmental and industrial legislation, and on Aug. 31 it released a list of industries harmful to the environment that are subject to environmental and health impact assessments.

To contact the reporter on this story: Supunnabul Suwannakij in Bangkok at ssuwannakij@bloomberg.net

To contact the editor responsible for this story: Tony Jordan at tjordan3@bloomberg.net

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