Thais hope flooded factories back up in 3 months

BANGKOK Mon Oct 31, 2011 1:47pm EDT

1 of 20. Police officers wait to assist residents passing through flood waters in Bangkok's Chinatown October 29, 2011.

Credit: Reuters/Adrees Latif

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BANGKOK (Reuters) - Thailand hopes industrial estates swamped in its worst floods in half a century can be up and running within three months, the prime minister said on Monday, as the danger of central Bangkok being inundated appeared finally to have passed.

Nearly 400 people have been killed in months of floods that have disrupted the lives of more than 2 million, economic growth has been set back and global supply chains for Thai-made computer and auto parts thrown into disarray.

But inner Bangkok, protected by a network of dikes and sandbag walls, appeared to have escaped the deluge with peak tides on the Chao Phraya river due to pass on Monday, water levels falling upstream and clear weather setting in.

While the center of the capital remained dry with business mostly as usual, neighborhoods on the wrong side of the protective ring, especially to the north and west, and provinces to the north, have been swamped by deep, fetid flows.

The government is planning to spend 900 billion baht ($30 billion) on reconstruction, flood prevention and helping industry, a government minister said.

But in the meantime, anger is rising in hard-hit communities. Tension boiled over into skirmishes with police in some areas as villagers try to pull down flood barriers keeping water high in their communities but protecting the capital.

Saving central Bangkok from disaster would be a major victory for the government of Prime Minister Yingluck Shinawatra, a political novice who took over this year after an election that many Thais hoped would heal deep divisions.

Bangkok's 12 million people account for 41 percent of Thailand's gross domestic product.

ECONOMICALLY VITAL REGION

Another economically vital region is just north of Bangkok, in particular Pathum Thani and Ayutthaya provinces, which have been largely inundated for weeks.

Seven industrial estates that have sprung up over the last decade or two on what used to be the central plain's rice fields have been overcome by the exceptionally large volumes of water flowing down the Chao Phraya basin.

Yingluck said it should take three months to rehabilitate the industrial estates, where some foreign investors have built production hubs.

"We expect after the water recedes the industrial estates will recover within three months if we can release the water and recover the machinery quickly," Yingluck told reporters.

A resident of Pathum Thani province said the water level had fallen for the first time and was down about 5 cm (2 inches) on Monday, but was still nearly 1.5 meters (5 feet) deep.

Thailand is the second-largest exporter of computer hard drives and global prices are rising because of a flood-related shortage of major components used in personal computers.

Thailand is also Southeast Asia's main auto-parts maker and Japan's Honda Motor Co said car production in Thailand could be difficult in the second-half of its business year, which ends in March, because of the floods. Work at its Thai plant in Ayutthaya has been suspended indefinitely.

Yingluck said she had been in talks with Japanese investors and had assured them of steps to prevent a repeat of disaster from the annual rainy season.

"They are still confident to invest in Thailand but we have to invest in a long-term flood-protection plan," she said.

DANGER, DISEASE

Energy Minister Pichai Naripthaphan said the government expected a recovery plan would cost 900 billion baht ($30 billion), including 800 billion baht for an overhaul of the water-management system and 100 billion for the rehabilitation of industrial estates.

"Every crisis has an opportunity. We are studying how to rebuild the country's economy and competitiveness. We have studied models from several countries," Pichai told Reuters. "Solving the flood crisis is the main issue."

The president of South Korea's Samsung Electronics said at the weekend he expected Thailand's floods to hit the computer memory chip market further by hurting PC production until the first quarter of next year.

Honda said the interruption at its Thai plant was expected to disrupt car production in Indonesia, Vietnam and Pakistan, since it uses Thai parts in those countries.

The Bank of Thailand has nearly halved its projection of economic growth this year to 2.6 percent from July's 4.1 percent estimate, and said the economy -- Southeast Asia's second largest -- would shrink by 1.9 percent in the December quarter from the previous three months due to the floods.

The floods have destroyed 25 percent of the main rice crop in the world's largest rice exporter as they submerged four million acres (1.6 million hectares), an area roughly the size of Kuwait.

The floods were caused in part by unusually heavy monsoon rain falling on a low-lying region, but the weather has been largely clear for a week as the cooler dry season begins.

But the danger is far from over, with the run-off still flowing south and swamping new neighborhoods as fears of disease grow.

People living in Thonburi, on the west bank of the Chao Phraya, have been struggling in waist-deep water for days, as have those in suburbs and provinces to the north of Bangkok.

About 30 riot police were deployed in an area of Pathum Thani to maintain order after residents destroyed a barrier.

Yingluck assured flood victims in a Facebook message that they would be taken care of.

As well as a big risk of diarrhea and mosquito-borne diseases, skin infections are a major problem and in some areas, while hungry crocodiles have escaped from flooded farms and snakes searching for dry land have slithered into homes.

(Additional reporting by Khettiya Jittapong, Bazuki Muhammad in BANGKOK and Chang-Ran Kim in TOKYO; Editing by Nick Macfie and Alex Richardson)

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