Map Ta Phut ruling hits SET

       Share prices of companies in the networks of PTT Plc and Siam Cement Group fell in a range of 1% to 7% during trading yesterday as the country's leading industrial conglomerates faced a new blow over unsettled pollution problems at Map Ta Phut.
       Among the 76 projects worth 400 billion baht ordered to halt construction by the Administrative Court on Tuesday,25 are being developed by subsidiaries and affiliates of PTT, said PTT chief financial officer Tevin Vongvanich.
       These ongoing projects include a sixth gas separation plant, due to be operational by the end of this year,petrochemical plants, and an upgraded refinery to meet Euro 4 emission standards.
       The court ordered the suspension of operating permits for new investments in Map Ta Phut Industrial Estate in Rayong, following an outcry from environmental activists and residents who claim the permits violated Section 67 of the 2007 Constitution.
       "The (temporary) suspension of these projects will affect our trading and contract partners, financial institutions, and related industries across the supply chain. Moreover, it will put at risk over 100,000 jobs, including hiring in [Map Ta Phut]," Mr Tevin said.
       "We are planning to hold talks with concerned government agencies to seek ways to soften the impact from the court's ruling, or we may lodge an appeal."
       Siam Cement said the court order would force its wholly owned subsidiary,SCG Chemicals, to halt nearly completed construction of its upstream naphtha cracker, as well as projects of its downstream subsidiaries and joint-venture units, expected to be completed between late 2009 to mid-2011.
       "In this regard, SCC will be working closely with all relevant government authorities to jointly conclude a solution for all concerned parties, while minimising any effect on SCG Chemicals'investment projects," president and chief executive Kan Trakulhoon said in a statement to the Stock Exchange of Thailand yesterday.
       Also affected is SET-listed Glow Energy, whose 660-megawatt power plant is likely to be postponed.
       Kim Eng Securities said the court was expected to review the case immediately when an appeal is lodged.
       "This issue cannot drag on for long because it will affect the sentiment of the stock market in general," said a Kim Eng spokesman.
       However, Bualuang Securities said the court ruling was unlikely to push the overall index down even though it caused a sudden shock.
       "This news represents a negative
       surprise and is certainly a near-term headwind against the stock of any company with facilities in or near Map Ta Phut," Bualuang said.
       Surong Bualakula, senior executive vice-president for the international business unit of PTT, said Thailand's competitiveness had been crimped by the Map Ta Phut case.
       The development could prompt PTT to look at neighbouring countries such as Cambodia, which has larger natural gas and oil reserves, as well as a pipeline network. The Cambodian government is considering a plan to build an energy complex in Sihanoukville, he said.
       "Map Ta Phut is the centre of Thailand's industrial development region with a competitive advantage in the gas-based petrochemical industry," Mr Surong said."What downstream manufacturers or automakers will invest in Thailand now because they cannot be sure if they will have enough raw materials in the future?"
       Shares of Siam Cement (SCC) closed yesterday at 222 baht, down 5 baht, in trade worth 1.11 billion. PTT shares rose 3 baht, but PTTAR fell 1.10 baht to 24.40 in trade worth 1.7 billion while PTTCH fell 4 baht to 73.25 in trade worth 844 million. GLOW fell 1.75 baht to 32.75 in trade worth 135 million.