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134146
Thu, 07/22/2010 - 16:03
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http://m.oananews.org//node/134146
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Thai PM Abhisit targets logistics cost reductions to 15% of GDP
BANGKOK, July 22 - Thailand's Prime Minister Abhisit Vejjajiva on Thursday said he has targeted bringing down the costs of Thailand's logistics system to as low as 15 per cent of gross domestic product (GDP) as soon as possible, and to lower than 10 per cent when all aspects of the system are fully developed.
The premier made the statement at a seminar held by Parliament's Logistics Commission titled "The Way out of the Logistics Crisis in Thailand".
He said the country must develop and improve the readiness of its logistics and transport system in order to reduce costs and be more competitive with other countries.
Thailand's logistics system faces high costs amounting to almost around 20 per cent of the country's GDP, according to Mr Abhisit, while developed nations spend lower than 10 per cent of GDP on their logistics systems.
During the past eight years, the premier added, Thailand has lowered its logistics costs by only 1-2 per cent.
Mr Abhisit said the Cabinet previously approved a plan to complete current maintenance of the rail system and to tackle problems at thousands of railway crossings in the next five years with a budget of Bt170 billion (US$5.1 billion).
There will soon be a proposal to Cabinet on building high-speed trains in Thailand with joint investment opportunities to offer to local and foreign investors. He believed the measure will help reduce the cost of transport.
However, Tanit Sorat, secretary of the Parliament's Logistics Commission, commented that the prime minister's goal on the matter would be difficult to achieve, for many related aspects need to be improved and the government has previously not done much on the issue.
He said, according to the World Bank, Thailand ranked number 35 this year for its ability to compete in logistics, four ranks lower than its 31st position in 2007.
Mr Tanit suggested that to lower Thailand's logistics costs, truck-dependent transport by road, consuming high volumes of fuel and accounting for 88 per cent of transport in the country, must be changed to rail transport, with costs 3.5 times more economical than the road distribution system.
The rail system, he said, is currently used for about 2.3 per cent of goods transport in Thailand, while problems of basic infrastructure such as ports and other transport through communities continue, for railway development needs to go through public hearing processes, which takes a long time to proceed.
It is a big issue, he said, and all parties must be involved -- even revising the State Railway of Thailand's organisation structure to be suitable to deal with transport improvements.
Meanwhile, Jakramon Pasukvanit, adviser to the deputy prime minister, said that more important than improving and lowering the logistics costs is developing a warehouse management system to address the 42 per cent (Bt750 billion, or US$22.7 billion) of overall logistics costs. Logistics management uses up 9 per cent of overall costs, or Bt150 billion (US$4.5 billion).
The combination of both warehousing and logistics management costs more than the transport itself, which is 49 per cent of the overall capital, or around Bt823 billion (US$24.9 billion).
Mr Jakramon added if every party is willing to solve the problems, logistics costs can be reduced without spending a great amount of money on building more basic infrastructure. This includes private sector to improve its data connection system and as well as adjusting some rules and services of the Customs Department. (MCOT online news)
The premier made the statement at a seminar held by Parliament's Logistics Commission titled "The Way out of the Logistics Crisis in Thailand".
He said the country must develop and improve the readiness of its logistics and transport system in order to reduce costs and be more competitive with other countries.
Thailand's logistics system faces high costs amounting to almost around 20 per cent of the country's GDP, according to Mr Abhisit, while developed nations spend lower than 10 per cent of GDP on their logistics systems.
During the past eight years, the premier added, Thailand has lowered its logistics costs by only 1-2 per cent.
Mr Abhisit said the Cabinet previously approved a plan to complete current maintenance of the rail system and to tackle problems at thousands of railway crossings in the next five years with a budget of Bt170 billion (US$5.1 billion).
There will soon be a proposal to Cabinet on building high-speed trains in Thailand with joint investment opportunities to offer to local and foreign investors. He believed the measure will help reduce the cost of transport.
However, Tanit Sorat, secretary of the Parliament's Logistics Commission, commented that the prime minister's goal on the matter would be difficult to achieve, for many related aspects need to be improved and the government has previously not done much on the issue.
He said, according to the World Bank, Thailand ranked number 35 this year for its ability to compete in logistics, four ranks lower than its 31st position in 2007.
Mr Tanit suggested that to lower Thailand's logistics costs, truck-dependent transport by road, consuming high volumes of fuel and accounting for 88 per cent of transport in the country, must be changed to rail transport, with costs 3.5 times more economical than the road distribution system.
The rail system, he said, is currently used for about 2.3 per cent of goods transport in Thailand, while problems of basic infrastructure such as ports and other transport through communities continue, for railway development needs to go through public hearing processes, which takes a long time to proceed.
It is a big issue, he said, and all parties must be involved -- even revising the State Railway of Thailand's organisation structure to be suitable to deal with transport improvements.
Meanwhile, Jakramon Pasukvanit, adviser to the deputy prime minister, said that more important than improving and lowering the logistics costs is developing a warehouse management system to address the 42 per cent (Bt750 billion, or US$22.7 billion) of overall logistics costs. Logistics management uses up 9 per cent of overall costs, or Bt150 billion (US$4.5 billion).
The combination of both warehousing and logistics management costs more than the transport itself, which is 49 per cent of the overall capital, or around Bt823 billion (US$24.9 billion).
Mr Jakramon added if every party is willing to solve the problems, logistics costs can be reduced without spending a great amount of money on building more basic infrastructure. This includes private sector to improve its data connection system and as well as adjusting some rules and services of the Customs Department. (MCOT online news)
