Thailand Infrastructure Report Q1 2013

BMI View: We continue to expect a recovery for Thailand's construction sector in 2012, with theunderlying assumptions for a recovery (such as the implementation of flood prevention measures, robustbuilding construction activity and conducive monetary conditions for construction) still holding firm.Indeed, strong reported performance in Q212 has prompted us to revise up our 2012 forecasts forThailand's construction sector, with real growth expected to reach 5.0% in 2012, from a previousforecast of 4.0%. Looking ahead, we believe that the factors supporting out bullish 2012 outlook will spillover in 2013. This, combined with increased access to infrastructure financing and a large pipeline ofinfrastructure projects, should keep construction activity relatively robust over the coming years. We areforecasting construction real growth to reach 4.5% in 2013 and to average 3.2% between 2014 and 2017.

Key developments in the country's infrastructure industry include:

In August 2012, Thailand announced that it was seeking a consortium to oversee the country'swater management plan - the plan involves 14 large-scale projects, worth a combinedTHB300bn (US$9.5bn) - and we believe this tendering process is still ongoing as of November2012. The plan is expected to be divided into 14 major projects, with eight projects located in theChao Phraya River Basin and six projects in six other river basins.

In August 2012, The Thai government announced that it would launch a commercial tender forthe construction of a new high-speed railway network in Q113. The THB400bn tender willinvolve the construction of four new railway lines - the Bangkok-Hua Hin, Bangkok-NakhonRatchasima, Bangkok-Pattaya and Bangkok-Pitsanulok (Chiang Mai) railway lines - andencompass a total of 250km. Construction of the network is scheduled for completion by 2018.

In September 2012, Thailand's Energy Regulatory Commission (ERC) said that it is due tolaunch a tender for the construction of six 900MW gas-based power plants in late-2013, reportsthe Nation. The plants will be developed under the independent power producer (IPP) scheme.

The ERC will launch the tender after the completion of the bidding terms of reference (ToR),which will take a year. The ERC is in the process short listing an adviser who will be responsiblefor completing the ToR.

In late-September 2012, Thailand's Transport Minister, Charupong Ruangsuwan, said that hisministry would consider delaying or cancelling the plan to construct the third phase of the LaemChabang deep-sea port project in Pattaya and the Pak Bara port project in south Thailand. This isbecause the country's private sector had expressed a preference for a port to be constructed inMap Ta Phut, and that there were growing concerns about the environmental problems that couldarise from expanding and developing the Laem Chabang and Pak Bara ports respectively.