A consortium of Middle East Investors (consisting of investors from Bahrain, Kuwait, Saudi Arabia & The United Arab Emirates) represented in Thailand by Mr Tony P Restall ? CEO of Port, Free Zone & Economic Consultancy Company ? DSI ? Development Services International Ltd and the accompanying delegation consisting of Mr Rohn Napa Kanjanayothee & Mr Denny Bowman, met the Governor of Phuket ? Niran Kalayanamit at his provincial hall office on October 4, 2007.

Investors from the Middle East have expressed interest in developing a Deep-Sea Port with a state-of-the-art passenger terminal and dedicated passenger vessel, as well as establishing a Free Port and Free Trade Zone on Phuket.

Mr Restall explained to the Governor that he has been instructed by his overseas (Middle East) clients to follow up with the Thai Authorities the desire and interest in regenerating the commercial shipping and marine activities in Phuket Deep Sea Port and securing a regular container service into/out of Phuket with regular connections to Malaysia & Singapore (connecting with the main line global carriers).

Mr Restall drew a comparison between Dubai and Phuket with regards to single source economic revenue streams ? in the case of Dubai (Oil) and in the case of Phuket (Tourism), saying that 25 years ago the Dubai Government decided that they should diversify their economy and the reliance on single source dependency (Oil). During the past 25 years Dubai has succeeded in turning around this economic model to where Oil only accounts for between 3-5% of its revenue contribution. Tourism, Free Zones, Aviation, Real Estate, Logistics and trading now accounts for over 95% of this alternative economic flow.

The projected annual investment into Phuket for the proposed project is estimated at around USD 200 Million or THB 6.8 Billion depending on the negotiated incentives that Free Port & Free Zone Investors could be offered by the Thai Government. The DSI Team has been developing and evaluating a ?Pilot Project Port & Free Zone? since the December 2004 Tsunami disaster based on the Free Port & Free Zone Models operating in the Middle East.

The Phuket Post contacted Mr Tony Restall for his comments, and what the proposed investment could mean for Phuket.

PP: What would you say, in brief, do Free Zones bring to the locality?

TR: Free Zones have been proved over the past 30 years as the fastest way to stimulate an alternative or new economy flow.

The First step for a Free Zone Investor is where the stand alone investor or multinational evaulates the Free Zone incentives claims. Do they work and can they deliver?

Once the Free Zone investor takes a warehouse or small industrial unit, the flow of freight begins to increase and the levels of local employment begins to increase.

Currently, there is no direct or indirect container service using Phuket Deep Sea Port. Containers and freight have to be imported via the Eastern Seaboard of Laem Chahbang or Bangkok Ports and trucked down to Phuket. Freight requires ships and from our side, we would constantly monitor investor freight movements to ensure we are able to induce the feeder carriers into Phuket Port.

Free Zones therefore stimulate the local and regional transportation network bringing down end user costs.

As a recent example in the UAE one of the smaller Emirates - Ras Al Khaimah has emerged from a sleepy backwater to one of the leading investment locations in the Middle East. During the period 2006 RAK signed up 1307 new companies into the FZ. This year (in the first 6 Months) they have already achieved over 800 new companies.

PP: What does this do to the local community and how does it benefit from the FZ?

TR: It is estimated that each investor/Company will invest on average around $126,000 USD per year, spent in the local market. Based on RAK FZ 800 clients for the first half of 2007, this equates to over USD 100 Million (or $200 Million over 12 Months).

A further breakdown of this 'Spend Power' equates to house/apartment rentals, car purchase or rental, school fees, supermarket expenditure, legal fees, travel, etc. The Free Zone Offices encourage the FZ investors to eventually 'upgrade' to a Warehouse with office or logistic facility with office.

PP: Why is Phuket suitable for a project like this?

TR: Phuket is an ideal location for a Free Zone due to the following factors:-

a) Size of population - According to recently released figures the recorded population in Phuket equates to 324,891 (August 20th) as registered Thais. However, it has also been observed that an
additional 323,600 maybe unregistered. Bringing the total population to over 600,000. Add to this the Tourists and Visitors ( July 2007 estimated at 278,980 - Airport Statistics).
Every head of population is a consumer of something and consumed goods are entering Phuket by road - adding to the traffic and potential damage to the roads surfaces. By regenerating the port we can permit the flow of containers into logistic warehouses for breakdown into smaller, more managable consigments.

b) Investors looking for a suitable Free Zone location from which to establish a branch of an overseas company also look at the associated 'Lifestyle' - this is where Phuket must score the highest marks. As a Free Zone developer, I have seen investors locating to some 'God Forsaken Corners of the World'. Phuket is simply the best location in the world. Phuket already has intenational schools, premier healthcare facilities, villas and apartments with flexible purchase options, some of the best sporting facilities in the world, such as golf courses and yacht marinas and of course, we cannot overlook the shopping and social life available here on the island.

PP: What would a Free Zone and a Deep Sea Port bring to Phuket in particular? In terms of economic develoment, what areas of development would be introduced to Phuket, and relatedly, what kind of jobs would be created for the locals?

TR: An active Port and Developing Free Zone provides immediately a parralel or alternative economic stream. It creates employment opportunities at all levels from high school to university graduates and skilled technicians. The revenues collected from the support service charges within the Free Zone (Millions of USD per year) contribute to the current overheads of customs, immigration and security services (amongst others). Other benefits include increased utilisation of a national assett such as the port, establishment of a 'One Stop Shop' to handle customs - immigration etc, manned by the relevant government agency assigned as the Free Zone Unit.

Opportunity to provide export & re-Export commodities and encouraging regional manufacturers to become leading export driven industries, including rubber, tin, timber tropical fruits etc.
Ability to encourage 'Technology Transfer' into Thailand and create a High Tech Free Zone Village (as places such as Singapore & Korea are now doing).

PP: In what ways would these projects benefit the island?
TR: Creating alternative employment opportunities - not depending on tourism and hospitality, which can be vulnerable during events such as the tsunami, Sars etc, as the only revenue stream.

PP:Are there any foresee-able adverse effects of these projects on the island, and if so, what could be done to prevent these?

TR: By conducting a detailed Impact Assessment and working with the local community we fully intend to ensure we address everyones concerns. Taking a project such asthis to the Government is no easy feat. Governments are naturally concerned about 'Tax Free Status'within the national limits of any country. However, we have to convince the Thai Government that Phuket Free Zone could effectively add great value to the country's economy and could be replicated throughout the country.