The Great Leap Backwards

Posted: 13 Aug 2010 | 2:35 pm

The Nation.

A reversal of fortune has hit, home for one of Greater Phuket's real-estate success stories of the past five years.

Early last month developers and investors were left in the dark by a new ministerial regulation that has rezoned the beach areas and communities of Koh Kloy up to Thai Muang in southern Phang Nga province.

Staff of the Interior Ministry say the changes have been in process for some time and originated from concerns about unabated growth of international hypermarts of the "modern trade" variety, such as Carrefour, Big C and Tesco Lotus.

In the guise of common town and city planning, the new zones have hit commercial and beach-front development in the area commonly referred to in Phuket as "just over the bridge".

Proximity to the international airport, a spacious four-lane highway and expansion of a new Sarasin bridge have made door to door travel time from "just over the bridge" substantially less than that from many parts of Phuket, which suffers from increasingly choked roads.

According to the new regulations, the intention is to control land development and preserve natural or environmentally sensitive areas. Set to run for a period of five years, enforcement or zoning has been divided into 10 individual zones.

The primary use of the vast majority of the area is now agriculture or forest conservation. The letter of the new law refers, with much ambiguity, to "commercial" activities. Most legal experts we have spoken to say this could be interpreted as covering both hotels and recreational facilities such as new golf courses within the newly designated agricultural and rural zone, which is largely located on the west-coast beach and adjacent areas. Commercial definitions contained in similar regulations in Phuket exempt hotels, but the Phang Nga version does not.

Another vague portion of the regulations limits development areas per zone to between 20 and 50 per cent, depending on the zone. This may be a plot ratio, but feedback from experts who are interpreting the ramifications of the regulations suggests this is calculated on a "total area of the zone" basis.

Therefore, it gives an advantage to developers who are going to build in the near future. But there may be no allocations left for long-term planners to build on land they already own.

The vision of a Greater Phuket tourism zone embracing the island itself and all of Phang Nga (including Khao Lak), Krabi, Koh Phi Phi, Koh Lanta and Phang Nga Bay has been widely supported by the Tourism Authority of Thailand, local Government and the private sector.

But as Phuket continues to burst at the seams with development, nearby provinces continue to languish, with local annual occupancies and seasonal trading in many eases being something akin to "rich man, poor man".

For investors and property developers who have bought real estate in the affected area with the intention of developing international-standard hotels, large-scale residential projects or recreational facilities, this comes as a stunning blow. There was no grandfather clause, no grace period and no protocol from the powers-that-be. They have touted the promotion of investment into poor provinces, but in this case, they have not walked the walk.

For local residents of southern Phang Nga there will no doubt continue to be employment opportunities as gardeners or maids at the multimillion-dollar villas which continue to sprout along beach-front areas. But those opting out will be forced to either commute to Phuket or take the giant leap backward to farming and be stuck with an uncertain future.

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