Asia Economy

Thailand Calls Holiday to Allow Escape From Floods

Kaori Enjoji|Tokyo Bureau Chief, CNBC Asia Pacific

Thailand announced a five-day holiday on Tuesday to give people the chance to escape floods closing in on Bangkok as the prime minister warned that the capital could face an inundation of 1.5 metres (nearly five feet) of water if barriers collapsed.

A Bangkok suburb is flooded October 25, 2011 in Bangkok, Thailand.
Getty Images

The cabinet declared Oct. 27-31 a holiday in Bangkok and 20 provinces affected by the country's worst flooding in 50 years as weekend high tides in the Gulf of Thailand could complicate efforts to divert water from the low-lying capital.

Financial markets will remain open.

As water levels climbed, some of those already evacuated were preparing to be evacuated again, with 4,000 people sheltering at a northern Bangkok airport told they would be moved to the eastern province of Chon Buri.  

The floods have killed at least 366 people since mid-July and disrupted the lives of nearly 2.5 million, with more than 113,000 in shelters and 720,000 seeking medical attention.

Authorities are scrambling to pump out water around the east and west of Bangkok but record-high water levels in the Chao Phraya river that winds through the city raise the risk of floods in the commercial heart when the high tides come.

Prime Minister Yingluck Shinawatra warned in a televised address that central Bangkok, which authorities have been struggling to protect, could be swamped by up to 1.5 metres (nearly five feet) of water if barriers broke.  

She told residents to get their belongings up high and get ready. She said authorities would guard important places such as the royal palace and power stations and do their best to limit damage and pump water out of the city.  

Seri Supharatid, director of Rangsit University's Centre on Climate Change and Disaster, said the city's fate rested with dikes along the Chao Phraya river.

"In the worst-case scenario, if all the dikes break, all parts of Bangkok would be more or less flooded," Seri said. 

The floods have also forced the closure of seven industrial estates in Ayutthaya, Nonthaburi and Pathum Thani provinces bordering Bangkok, causing billions of dollars of damage, disrupting supply chains for industry and putting about 650,000 people temporarily out of work.

The cabinet announced a 325 billion baht ($10.6 billion) budget on Tuesday to help rebuild the country, mostly for small and medium-sized enterprises, small vendors and individuals.

"If they get back to normal quickly, it will help push the economy forward," said Finance Minister Thirachai Phuvanatnaranubala. 

Thirachai last week said growth for this year could be barely 2 percent due to the flooding, down from the central bank's earlier forecast of 4.1 percent. 

Heavy rain late on Tuesday, the first in four days, could complicate an already precarious situation and more showers were forecast for Wednesday.      

Don Muang Airport, Bangkok's second biggest, closed late on Tuesday due to concerns that passengers and staff might have problems reaching the terminal. It is expected to reopen on Nov. 1.

Airports of Thailand said the main Suvarnabhumi Airport, built on a snake-infested swamp, was not affected because it was on higher ground. However, Thai Airways, which operates out of Suvarnabhumi, said it may reduce flights because of staffing concerns. 

As water levels rose, there were concerns the Lat Krabang and Bangchan industrial zones in the north and east of Bangkok would be inundated, threatening a total of 344 factories, 49 of which are operated by Japanese firms that include including Honda Motor and Isuzu Motors

"The situation behind the factory isn't good," Tanapon Karakasikum, an official at an auto components factory at Lat Krabang, told Reuters. "The flood barrier is too low but the operators of the estate are not doing anything." 

Bangkok Tense
The centre instructed residents of the Muang Ake housing estate in northern Bangkok to evacuate on Tuesday after a flood protection wall in nearby Pathum Thani province was breached, adding to tension in the capital, where residents have fortified their homes and stockpiled food and water. 

The Commerce Ministry said on Tuesday it would relax import tariffs and regulations on food, water and some consumer goods in short supply as a result of hoarding.

Bangkok Governor Sukhumbhand Paribatra issued a new flood warning late on Monday for Bang Phlad district, west of the Chao Phraya river and closer to Bangkok's commercial heart.

Bang Phlad is home to department stores, universities and hospitals. Siriraj Hospital, where Thailand's revered king has been for more than two years, is nearby.

Government spokeswoman Thitima Chaisang said the holiday had been called due to the high tides and to give residents the option of leaving Bangkok.

Sukhumbhand said the holiday would allow authorities to handle the crisis better.

Authorities opened most canal gates in Bangkok late last week, a high-risk operation taking pressure off defensive walls by diverting water around the east and west of the capital into the sea, but raising the chance of inner-city flooding.

Hundreds of people were evacuated over the weekend as water in Lak Si and Don Muang reached levels as high as two metres (six feet), spilling out of swollen canals and rivers. Several escaped farm-reared crocodiles have been killed or captured in residential areas of Ayutthaya. Snakes have also been a problem. 

At least 227 bank branches have been forced to close by floods, most of them in the provinces north of Bangkok. 

The central banks of Japan and Thailand said on Tuesday they were looking at a mechanism to offer funds in baht backed by Japanese government bonds to help affected Japanese firms. The Bank of Thailand also said it was discussing similar plans with other countries.

Big Japanese firms such as Toyota Motor , Sony and Nikon have had to close down operations in Thailand.