Thai Flood Crisis Improving as Waters Recede in Some Areas, Yingluck Says

By Daniel Ten Kate and Anuchit Nguyen - Oct 29, 2011 10:57 AM GMT+0700

Thai Prime MinisterYingluck Shinawatra said floodwaters are starting to recede in provinces north of Bangkok as a tidal surge swelled the Chao Phraya river to record heights, threatening riverside communities.

Floodwaters in Nakhon Sawan and Ayutthaya provinces north of Bangkok have started to recede, with rebuilding efforts beginning in some areas, she said in a weekly address today. A high tide until Oct. 31 makes this “a critical period” for the capital, she said.

“The flooding situation is improving,” Yingluck said. “Flooding in some Bangkok areas is expected to recede in the first week of November.”

Confusion over the severity of flooding has fueled panic in the capital, leading to shortages of bottled water, eggs and baby formula as the worst floods since 1942 reach Bangkok. Dikes north of the city are holding back a three-meter-deep wall of water that has inundated about 10,000 factories, disrupting the supply chains of companies including Honda Motor Co. and Western Digital Corp. (WDC)

Yingluck offered help to companies with inundated factories by waiving tariffs on machinery imports. The government also imposed price controls on bottled water, tissues, boats and pumps and will import the items to ensure sufficient supply, she said.

“The goods will be transported by boats and roads to Bangkok to help ease shortages,” Yingluck said. “I would like businesses not to take advantage of this crisis by hoarding products.”

Growth Forecast Cut

Thailand’s central bank yesterday cut its forecast for economic growth this year as the floods take a toll on manufacturing and tourism. Southeast Asia’s second-biggest economy may expand 2.6 percent in 2011, down from an earlier forecast of 4.1 percent, and 4.1 percent next year, the Bank of Thailand said. Since July, flooding has killed 377 people.

Stocks rose to the highest since Sept. 22 yesterday, mirroring gains elsewhere in the region after European leaders agreed to expand a bailout fund to stem the region’s debt crisis. The baht advanced 0.1 percent to at 30.53, the strongest in more than a month.

The floods may cause about 140 billion baht ($4.6 billion) of financial damage to manufacturers in seven industrial estates, according to the government’s insurance regulator. Japan’s casualty insurers may face about 190 billion yen ($2.5 billion) in net payouts to cover damages from Thailand’s floods, Deutsche Bank AG said in a report yesterday.

Record River Level

The Chao Phraya river running through the middle of Bangkok broke a record by swelling to 2.47 meters above the mean sea level, or 33 centimeters below the government’s main barriers, the Bangkok Metropolitan Administration said on its website. The tide reached 1.28 meters above the mean sea level and may climb to 1.31 meters today.

Thailand’s government announced a five-day holiday through Oct. 31 for 21 northern and central provinces to give people time to prepare for flooding. Banks remain open.

The Grand Palace, about 100 meters (328 feet) from the river, was surrounded by water earlier today, state-run MCOT reported on its website. During the 1942 floods, visitors rowed boats past Bangkok landmarks including Democracy Monument, about two kilometers from the palace.

The flooding in Bangkok is mainly limited to northern and eastern areas in the capital and low-lying places near canals and rivers. The main business districts of Silom and lower Sukhumvit remained dry, with barriers of sandbags protecting many office buildings and shops.

Airport Open

Bangkok’s Suvarnabhumi International Airport is operating normally and the company that operates the facility is “confident” that it can be protected from flooding, Somchai Sawasdeepon, senior executive vice president of Airports of Thailand Pcl, said yesterday. Malaysia advised against non- essential travel and Cathay Pacific Airways Ltd. canceled four flights to Bangkok as the waters deter visitors.

Don Mueang Airport, used mostly for domestic flights, closed after floodwaters reached the runways. Yingluck has used the building to direct flood-relief efforts and provide refuge for about 4,000 evacuees who are being transferred to other locations.

Heavy Rains

Rainfall about 25 percent more than the 30-year average filled upstream dams to capacity, prompting authorities to release large amounts of water earlier this month down a flood plain the size of Florida, with Bangkok at its bottom tip. Authorities are aiming to drain the water around the city and through its 1,682 canals.

Residents in northern Bangkok caught fish in their homes and ate noodles with their feet resting in ankle-deep floodwaters, television images showed. In some areas, they showed residents capturing escaped crocodiles.

“I suggested that clients leave town because of shortages of drinking water and chaos at supermarkets where people are cleaning out the shelves,” said Sanit Nakajitti, a director at PSA Asia, a Bangkok-based security and risk consulting company. “It’s not a life-threatening situation; it’s more just an inconvenience.”

To contact the reporter on this story: Anuchit Nguyen in Bangkok at anguyen@bloomberg.net

To contact the editor responsible for this story: Daniel Ten Kate at dtenkate@bloomberg.net