‘Soft’ loan idea not likely to find favour

Press, 23 March 1985, Page 14

‘Soft’ loan idea not likely to find favour

From MICHAEL HANNAH in Bangkok A Thai Minister’s suggestion that “soft” loans for New Zealand natural gas companies could help their chances of gaining contracts in Thailand is likely to be rejected by the New Zealand Government. The Minister of Overseas Trade, Mr Moore, made this clear after a meeting on Wednesday with the Thai Minister of Communications, Mr Samak Sundarajev, who made the suggestion. New Zealand companies with experience in providing natural gas pipelines and services were present at the meeting. New Zealand contractors were urged to consider pooling their resources to ensure as much New Zealand

participation as possible in overseas contracts. Mr Samak told the meeting that Japanese companies included “soft,” low-interest loans in a mixed credit arrangement to help their chances of gaining contracts. They also tended to set conditions in their tenders which favoured Japanese sub-con-tractors.

There are several potentially big contracts up for grabs in Thailand though Mr Samak was careful not to put a timetable on them. He explained that the Government had a tight budget and could not afford to either cut welfare programmes or divert existing loan funds.

Nevertheless, big programmes were planned to improve rail, shipping,

natural gas, transport, telephone, and highway services.

While foreign participation of up to 40 per cent is allowed, compared with 30 per cent in Malaysia, the Thais left no doubt they would settle on the best possible bargain. Mr Moore responded to Mr Samak’s suggestion of “soft loans” by saying New Zealand could provide services with advantages in price, quality, and reliabilTo make a concession for one contract or one country with low-interest loans would be to invite similar approaches from other companies. It would also be inconsistent with the Government’s domestic economic policies and unaffordable, he said.