Pattaya airport set for $5.7bn boost

U.S. Air Force Airmen arrive at U-Tapao Royal Thai Navy Airfield, Thailand, May 7, 2015. The Airmen make up the Joint Air Component Coordination Element of Joint Task Force 505, and joined JTF Marines in Thailand to manage air operations supporting humanitarian assistance and disaster relief missions in Nepal. Nepal was struck by a 7.8 magnitude earthquake April 25. (U.S. Air Force photo by Staff Sgt. Alexander Martinez/Released)

Thailand is seeking to take on Singapore’s dominance in aircraft maintenance, repair and overhaul with a US$5.7 billion upgrade of its military-civilian airport near Pattaya. 

Prime Minister Prayuth Chan-Ocha is investing in infrastructure to boost the economy, whose expansion has lagged the Asean average since the military seized power in May 2014.

He says he plans to invest 1.5 trillion baht (US$44 billion) by 2021 to develop the country’s eastern coast, with the planned revamp of the Vietnam-War-era U-Tapao International Airport forming the initial focus.

Apart from the airport in the Eastern Economic Corridor, the junta hopes to spend US$4.5 billion on high-speed rail, US$11.5 billion on new port-cities and US$14 billion on industry.

Ajarin Pattanapanchai, deputy secretary general of the Thailand’s Board of Investment, told Bloomberg: “Singapore is quite tight right now. To catch up with the demand of airlines in the region, especially new demand from Myanmar, Vietnam, Cambodia, and given that we have existing strengths with automotives and engineering, Thailand will be the second choice to be the MRO [maintenance, repair and overhaul] hub.”

Foreign-direct investment (FDI) has revived after falling in 2014, especially in digital and high-technology sectors, the government claims.

FDI increased to US$8.6 billion in 2016 from US$2.7 billion in 2015, according to the Board of Investment.

It is unclear how quickly the military government can implement its vision for the eastern gulf coast given the scale of the project, with challenges including a shortage of skilled workers and future political instability.

Thailand, which is currently the world’s fourth largest importer of steel, is increasingly looking to Iran for metal imports.

Thailand imported 13.2 million tonnes of semi-finished steel and steel products last year, up 15 per cent compared to 2015, Foolad News estimated.

The junta’s infrastructure, transport and construction projects require a steady influx of steel with imports rising since 2000, with only a slight interruption in 2007-9.

The kingdom’s steel imports amounted to 4 per cent of global shipments last year.

The Iranian Mines and Mining Industries Development and Renovation Organisation said more than 16 per cent of total steel exports, amounting to 884,800 tonnes, were shipped to Thailand. This indicates an over 97-per-cent growth in shipments year-on-year and makes Iran the fourth-fastest growing exporter of the commodity to Thailand, followed by Indonesia, Australia and China.

Vietnam-War-era U-Tapao International Airport. Picture credit: Pacaf