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Lease Period on Govt Land to Double to 99 Years

By on Sep 01, 2015 in Investment-Land, Property News

The government will speed up amending the land-lease law to extend the long-term lease period from 50 years to a maximum of 99 years, with the Finance Ministry earmarked as the first beneficiary of the move as it prepares to lease a huge plot in central Bangkok from the State Railway of Thailand.

Prime Minister Prayut Chan-o-cha, who chaired yesterday’s meeting of the State Enterprise Policy Committee, had instructed the Transport and Interior ministries to fast-track the amendment to facilitate a permanent solution to the SRT’s financial problems, which has resulted from chronic losses.

The SRT will lease the prime plot in Makkasan to the Finance Ministry for 99 years. The ministry plans to develop commercial property projects worth a combined Bt61.8 billion there. In return, the Finance Ministry will write off the accumulated debts of the SRT, which are running to the tune of nearly Bt100 billion.

According to Kulit Sombatsiri, director-general of the State Enterprise Policy Office, the land-lease law for commercial and industrial development – BE 2542 – will have to be amended before the Finance Ministry can rent the SRT’s land plot for 99 years, since the current law only allows long-term leases of up to 50 years.

Earlier, the government planned to promote the private sector’s investment in special economic zones along the country’s borders with neighbouring countries through long-term land leases that could be extended from 50 years to 99 years.

These SEZs include those in Mae Sot district in Tak bordering Myanmar and covering an area of 14,000 rai (2,240 hectares); Aranya Pathet district in Sa Kaew bordering Cambodia (2,900 rai); Trat bordering Cambodia (740 rai); Mukdahan bordering Laos (1,000 rai); Sadao district in Songkhla bordering Malaysia (1,000 rai); and Nong Khai bordering Laos (4,100 rai).

In a related development, private developers have urged the government to grant land leases of at least 60 years and offer more incentives for the estimated Bt68-billion commercial development of Bangkok’s Grand Bang Sue Train Station.

The plan is for the station to serve as an Asean-bound rail link and business centre, with its development expected to be completed over the next five to 15 years.

According to the SRT, the ambitious project is divided into three phases covering 218 rai in total.

It said about Bt10 billion would be required to develop the 35-rai zone A, Bt24 billion for the 78-rai zone B and Bt34 billion for the 105-rai zone C.

Besides the commercial area, the 87.5-rai zone D would be transformed into a mass transport and transit hub.

Because of the massive capital investment required for the development, Thai and foreign investors have proposed that long-term land leases should be extended beyond the current limit of 50 years to make the projects financially feasible.

Source: The Nation – 1 September 2015

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