Construction giant in negotiations to meet its wage bills
The Ministry of Labor is conducting inspections at construction sites to swiftly address the challenges faced by Italian-Thai Development (ITD) workers.
Insufficient financial liquidity at ITD is having implications for payments to subcontractors and the resultant timely payment of wages to labourers. the Labour Ministry is holding discussions with the company to ensure worker welfare.
ITD has actively participated in bidding processes to secure construction projects under the umbrella of the Transport Ministry. Some of these projects have been closely monitored by the relevant authorities to ensure that the construction activities do not affect the scheduled timelines for completion,
Surachet Laophulsuk, director of the Expressway Authority of Thailand (EXAT), revealed that EXAT has a contractual agreement with ITD for construction work on the Rama 3 - Dao Khanong - Outer Ring Road Western Expansion project. While there are no apparent signs of any impact on the project construction, EXAT will closely monitor this matter and is committed to expediting the project's construction progress, including ensuring that ITD and all subcontractors proceed swiftly. In discussions with the subcontractors last week, it was confirmed that the construction work will be accelerated to meet the ministry's target for completion by June 2025.
Nirut Maneepan, governor of the State Railway of Thailand (SRT), stated that SRT is currently not affected by the financial constraints of ITD. He believes that this issue is likely an internal matter for the company.
According to the Department of Highways (DOH), the ongoing construction projects under its jurisdiction with ITD as the contractor have not experienced any impact or issues at the construction sites. Specifically, in the case of the elevated highway project, Route 35 Thonburi-Pak Tho (Rama 2 Road) at the Bang Khun Thian-Ekachai Interchange, where ITD is the contractor for section 3, the cumulative progress stands at 91.65%. ITD is expected to complete the main thoroughfare construction by May 2024.
Referring to demands by ITD workers for overdue wage payments, Sopa Kiatniracha, director-general of the Department of Labor Protection and Welfare (DLPW), said she has instructed labour inspectors to conduct thorough investigations by physically inspecting construction sites affiliated with ITD throughout the country, especially large-scale construction sites in industrial zones. Additionally, the department is closely monitoring the situation. As of now, units in various provinces have sent invitations to employers to meet with officials for further enquiries.
ITD, whose main office is in Bangkok, operates branch offices and construction projects across the country. It currently has 25 projects in progress and employs more than 20,000 individuals, of whom approximately 3,000 to 4,000 are foreign workers.
A source revealed that employee salaries have been disbursed at only 20-40% of the total amount in some months.
ITD is currently engaged in negotiations with financial institutions to find a solution to its liquidity issues. For the short term, discussions to improve the company's liquidity are taking place, and negotiations may involve banks providing support to sustain business operations or assisting in enhancing the financial condition of specific ongoing projects. Following this, debt restructuring may be considered to conclude negotiations with financial institutions by the end of March.
It is understood that during negotiations, the financial institutions have offered to provide additional liquidity to ITD through direct disbursements to subcontractors.
Over the past five years, ITD has consistently reported net losses, except for the first nine months of 2016 when it recorded a net profit of 379 million baht. A closer look at the financial statements for that period reveals that a portion of the profit was attributed to asset sales. ITD reported a net loss in 2015, with an expanded deficit of over 4.759 billion baht.
ITD's stock has been suspended with a trading halt indicated by the "SP" (Suspension Pending) marker. Before the suspension, shares were priced at 0.85 baht apiece.
