Jun. 22--Local suppliers should be given priority in bidding for government megaprojects to ensure the money remains in Thailand, says Prasert Thammanoonkul, president of the Alliance for Supporting Industries Association (ASIA).

Parliament last week approved borrowing of up to 800 billion baht by the government, including up to 400 billion to help finance medium-term infrastructure programmes. The government wants to invest up to 1.4 trillion baht in power, logistics, mass transit, rail and social services over the next few years.

Mr Prasert said the terms for the projects should specify a preference for locally made products and Thai suppliers as well as Thai contractors.

"With terms of reference that give preference to Thai operators, the budget could be injected directly into local companies instead of subcontracts from the large operators, resulting in lower costs for operators and shorter [completion] times," he said.

ASIA is an umbrella organisation for about 15,000 small and medium-sized business operators, many of whom are struggling at present.

"They are now hurt badly by shrinking sales, down about 40-50 percent from last year. That has also caused them to reduce their capacity utilisation to 50 percent," Mr Prasert said.

Members are mostly in supporting industries for the automotive, electronics, steel, plastic, mold and die sectors. The alliance members have annual sales estimated at 250 billion baht.

Mr Prasert estimated that member companies had shed 100,000 workers since early this year. More than 1,000 companies have suspended operations and some have gone out of business.

"The budget would be spent much more efficiently if the government can prioritise how to spend," he said.

"We hope some amount of the budget can be allotted to the supporting industries, otherwise a huge number of small business operators in the country would be out of business soon."

ASIA also calls for delaying free trade agreements between Thailand and other countries until the bidding for government projects is finished.

"If an FTA is in effect before the bidding process is finished, it could prevent the government from setting preferential conditions to Thai companies," he said.

For example, he said, Thai operators lost an opportunity to do business with the government because the Electricity Generating Authority of Thailand prefers to buy imported wind turbine equipment, despite the fact that local producers made equivalent quality products.

"Although the price of locally made products is 10-15 percent higher than imported ones, the benefits will go directly to local business and circulate in the domestic system," he said.

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