The government should investigate alleged speculation at several land plots near the three new electric train routes that the caretaker Cabinet is likely to approve tomorrow, a property expert said last week.

Since the government recently re-solved to go ahead with the routes, land prices in the area have risen by 20 to 50 per cent.

"Speculation is the cancer of the property industry. The government has to investigate and launch measures to protect business. For instance, it could introduce a capital gains tax to curb the speculation," Prof Manop Bongsadadt, chairman of the International Real Estate Federation in Thailand, said at a Krungthep Turakij seminar on the outlook for the property sector.

The government believes the new Bangkok lines will stimulate economic growth.

The three routes are 28 kilometres of the Red Line from Bang Sue to Rangsit, 23 kilometres of the Purple Line from Bang Sue to Bang Yai, and 13 kilometres of the Blue Line from Bang Sue to Thapra. They are expected to cost about Bt150 billion in total.

Manop said the increase in land values around the mass-transit routes had increased housing prices, forcing middle- and lower-income earners out of the market.

 "Mass transit has to have a role in developing quality of life for people in the community, but spe-culation on land prices changes this concept," he said. The higher prices would force developers to go for top-end projects aimed at high-income earners.

Atip Bijanonda, president of the Thai Condominium Association, agreed that speculators had rushed to buy up plots in the area, causing prices to rise by 20-50 per cent.

However, most of the developers had already bought plots close to the routes as the government had announced plans to develop them as part of its mega-projects scheme.

According to research by the Agency for Real Estate Affairs (AREA), land prices near mass-transit lines, such as the Skytrain and underground routes, have increased on average by 20 per cent a year since the lines became operational, said Dr Sopon Pornchokchai, AREA managing director.

Pranote Suriya, director of the Traffic and Transport Systems Development Bureau, said it would propose the complete plan for developing the three new rail routes to the government tomorrow.

"We will propose the details of the investment plan, including the budget, details of the turnkey contract and terms of reference. We believe that, following Cabinet approval, the Mass Rapid Transit Authority of Thailand [MRTA] and the State Railway of Thailand will be ready to open bids immediately," he said.

He added that the three train lines were not new schemes because they had been approved as part of the mega-projects plan two years ago. But the lines had been delayed because the government wanted to develop an additional seven new lines.

The budget for the three new lines was allocated in 2004.

Chukiat Photayanuvat, assistant governor of MRTA, said the department was ready to open bidding following Cabinet approval.

The MRTA is confident that construction will start in the next year and be completed within the year 2009, he said.

More than 50 construction firms from Thailand and overseas are interested in bidding for the project, Chukiat added.

Somluck Srimalee

The Nation