Rain, Valuation and Tourist Police in Koh Samui

Sometimes things get delayed - as is this Blog which should have gone out in December so please read it in that context!

I am not commenting on the present situation in Thailand as there is really not much more to say that cannot be read in the Newspapers and seen on the television and the situation is still fluid. It has obviously badly affected the tourist season and for those still brave enough I can see that there will be some cheap deals in the hotels over Christmas.
Well the rainy season has well and truly started and there has been plenty of rain during November. As expected all the usual places have flooded but there are some positive signs as well. Since the last major flooding here the Municipality has carried out several drainage improvement schemes and they appear to be working. It is doubtful that any drainage could have coped with the volume of water that fell on the island in such a short time but once the rain stopped many of the affected areas cleared very quickly. Emergency measures put in place on the prediction of heavy rains also worked. The flooding that normally occurs between the traffic lights at Bophut and the entrance to Fisherman’s Village has been noticeable by its absence due mainly to the huge pump in place on the corner. The road near Plai Laem Wat between the 7-11 on the Tong Sai Bay turn and Cheongmon which always floods used to take days to clear but now is gone within a few hours of the rain stopping. Bangrak as well with its new road and drainage system has coped well. There are still bad areas and the road just north of our office between the PTT station and the Laem Din turn still floods badly and takes time to dissipate as does the road through Laem Din which despite the new road and drainage there has been closed. We always expect rain at this time of the year and hopefully with it coming “on time” presages an end before the Peak Season over Christmas and the New Year.

The great issue to be faced by a valuer in these troubled economic times is justifying a valuation figure against actual sales in the market when such sales are few and far between. Only Thai qualified valuers can prepare valuation reports that can be used in the Thai Courts or by Thai banks. As a Chartered Surveyor in Thailand valuations I prepare are not acceptable to the Thai authorities. However, I can and have prepared valuations relevant to real estate here that are acceptable to the UK Courts. Justification of value in these instances is important and very relevant should there be a dispute between the parties in Court. I therefore have to be diligent in my research, logical in my reasoning and arrive at a valuation figure that is fair to both parties. I must therefore look at all the evidence available to me which includes asking prices, changes I am seeing in asking prices, land prices, building costs, etc. The Market Value of a property as defined by the International Valuation Standards Committee of the Royal Institution of Chartered Surveyors is defined as follows:
‘The estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s-length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion.’ How do you proceed if there are no willing buyers at the valuation date? This does not mean that the property has no value as it obviously has a value to the present owner and there would be a figure at which that person would no longer be a willing seller. So it is a bit of a conundrum. In the final analysis I have to form an opinion and make a judgement and provided the basis upon which I arrived at that judgement is clear, logical and fair I can do more.

There is an article below announcing details of the new Samui Tourist Police location between BigC and Samui Town Centre. The Tourist Police come under a great deal of criticism mainly for not being available or easily contactable when they are needed. This was certainly partly due to the main office being in Nathon with a small portacabin office behind McDonalds on the Lake Road and also because the national contact number of 1155 does not work on Samui. At a meeting a few months ago which I attended they were well aware of the complaints and were working to resolve them and hopefully this move to a new location more accessible to the majority of tourists will do that. The other point that was made at the meeting was that the Tourist Police are not just there for the tourists but are available to assist all expatriates on the island including long term residents and can act as an interface between the local police and the foreigner. Certainly the Tourist Police officers will have a better command of English although not fluent by any means. This is where the Local Civilian Volunteers come in who hail from various different countries and have a good range of languages between them. Sadly there is inevitably a section of the community who see the volunteers as “wannabe cops” strutting round in uniform. I know a number of these volunteers and this is not the case. The uniform is necessary so that they are identifiable and they do carry identification to confirm their legitimacy. If they did not you can guarantee they would be accused of being “undercover snoops” for the Police. That is not their job and they are aware of it. Some are retired residents on the island and some business people who give up a few hours a week to give something back to the island. They do not have any powers of arrest nor are they armed as some people seem to think. They are there as an interface and from what I have seen do a good job. Tourist Police Contact Number: 077 43 00 18

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Possible location of new Marina on Koh Samui

Another month has gone by and there seems no end to the political turmoil in Bangkok. Whist the demonstrations are confined to specific areas the world media gives the impression that any visit to Bangkok is fraught with danger. The reality is of course that Bangkok is no more dangerous than it ever was and by comparison with many cities around the world including Europe, a lot safer. As in any city with which you are unfamiliar it is a matter of being aware of your surroundings and using common sense. These reports are part of the reason that tourism is down although the world economic crisis has also had a big hand in this with no easy credit and people hanging on to their cash. Nevertheless for those who still wish to travel beyond there own shores, Thailand is still a very attractive destination and cheap in comparison to many tourist destinations. With hotel bookings down in most sectors there are some good deals available to those willing to look. Talking to some of the hotel managers in the five star range I have been getting a slightly confused story. One hotel is telling me that their bookings are down at the present but they are full from Christmas through to March. Another was telling me that their advance bookings for next year were so low that they have dropped the seasonal rates and now have a single mid range rate for the whole year.

There was a meeting in October at Wat Plai Laem to inform the public about possible plans for a Marina adjacent to Big Buddha. It is still in the consultative stage at the present time but the estimated cost is Baht 644.5 million. The Marina will, if approved, be accessed from the land bridge connecting the main road by BBC Café to Big Buddha. There will be a total of 111 berths of different lengths with fueling facilities. There will also be a Marina Building which will presumably have the Marine Office but other facilities are not mentioned. The meeting was quite well attended with about eighty people, mostly Plai Laem residents and four or five foreign residents. One of the local residents I spoke to at the meeting was in favour of the Marina but would prefer it on the other side of the Koh Fan peninsular – nearer his house!

Thanks to Mark at BBC for the image.

This is one of five locations considered and currently the preferred option. Other locations considered were Bophut, Koh Som, Tong Krut, and Phang Nga.

Someone had a good time eating street food on Koh Samui and you can read their full report here.
Latest news of the wires is that Samui has at last been upgraded in status from a sub district to a town municipality, not City status as many had hoped, but a positive step for Samui. City status was always a forlorn hope as Samui just did not meet all the requirements. However, with a step up the ladder so to speak, Samui reports directly to Bangkok now and not through Surat Thani. For anyone interested in how the Thai regional government evolved and where we are to day follow this link.


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Thailand Politics and the effects on Koh Samui

For those of you who noticed, my apologies for failing to issue a Newsletter for September but this was due to an unexpectedly long overseas business trip and I did not have the time or opportunity to create one.

The political situation in Thailand is still not fully resolved although the now ex-Prime Minister Khun Samak has departed the scene to the delight of many but one wonders if his replacement Khun Somchai Wongsawat will fair any better as he is the brother-in-law of ousted Prime Minister Taksin Shiniwatra. He has quite an impressive background on paper qualifying as a Barrister in 1973 and holding posts as Chief Justice in various provinces and serving for nearly six years as permanent Secretary at the Ministry of Justice. His role under the Samak regime was as Minister of Education. However, even a cursory look at his background seems to suggest that he has been accused, rightly or wrongly, of being involved in a number of questionable areas such as when he was a member of AOT board, he was one of the 36 people implicated in the irregularities relating to the controversial Suvarnabhumi Airport luggage scanner purchase. Also one of the main demands of the opposition PAD is that Taksin Shinawatra is brought back to Thailand to answer charges of corruption and it is difficult to see Khun Somchai doing that although he has stated that is a matter for the Courts. Whilst certain sectors of the population seem to have accepted him there is still opposition to his appointment in some areas. Equally there is a growing antagonism to the PAD who are leading the opposition and their actions are seen by many as the cause of drop in tourism to Thailand over recent months due to the wide spread international reporting of their actions such as blocking airports.

What was good to see here in Koh Samui was that, with Phuket and Krabi airports being blockaded, the intervention of a respected local politician persuaded the PAD supporters, who intended to blockade the airport, that they would be doing themselves and the island more harm than good and the blockade was avoided. Nevertheless the demonstrations in Bangkok being reported in the media world wide, as stated above, and the airport blockades have had a negative effect on tourism with many hotels reporting cancellations as far ahead as Christmas. This is unfortunate as the situation on the ground is really very peaceful and apart from organised protests in the usual places (Nathon sea front and Chaweng Lake) life goes on here undisturbed. The protests may at times be loud but there has been no violence. I can see a lot of good deals becoming available in the hotels over the coming weeks.

The reality is in my opinion that tourism is being affected more by higher airline fares due to the price of oil and the overall world economic situation more than the political issues here as anyone who knows Thailand understands that the demonstrations, that are so widely reported, are very localized and tourists are not usually affected if they stay out of those areas. The airport situation was an exception but even those involved have now realised they did themselves more harm than good.



For those of you who may at times need Consular Advice, “Big Dave” Covey who has for a couple of years been the Honorary British Consular Representative on the island has at last received official accreditation from the Thai Foreign Ministry. Congratulations Dave!

Supermarkets and Accidents on Samui and Phangan

This blog should have been published at the beginning of August but I had to leave on an extended overseas trip and did not get back until early September.

There is an interesting article in this months Newsletter about Koh Phangan, an area I generally stay away from, but which highlights the issue of large international chains and their effect on the local economy. There were many objections to Tesco Lotus coming to Koh Samui and even more when they were followed by Makro and Big C. Yet anyone who goes to these stores will see that they are frequented predominantly by the local Thai population, many of whom own small supermarkets around the island and buy at wholesale prices and continue to make a living because they can. In the years since Lotus Tesco opened I have not been aware of any of the small supermarkets that we used previously closing so the fear was unfounded. Now they have Lotus Tesco on Koh Phangan and the effect appears to be dramatic. Competition has driven prices down and the local supermarkets are having to compete. There will undoubtedly be critics who decry the “commercialisation” of the island but why should the population there be denied better choice and lower prices. Word has it that the stocks sold out so quickly in the first few days that many shelves were soon bare. That is a problem that I am sure Lotus Tesco will get round as it is part of the logistical supply chain problems they experienced here on Koh Samui when they first opened –and still occasionally have here – and it will take time for the supply/demand equation to settle down. In my view the bigger threat to the local supermarket is the increasing spread of 7-11’s and Family Mart stores which are appearing on every corner. Not necessarily cheaper, but being open 24 hours and with a steady inventory, good supply chain, air conditioning etc. are more appealing than some of the older supermarkets. Some have taken up the challenge such as P&P in Bangrak which has identified local foreign demand and offers European foods not easily available elsewhere.

Last month I reported on the accident I had and the importance of having good accident and medical insurance whether as a resident here or as a tourist. I came across this “Blog” which makes the point again.

“Having travel insurance which covers every eventuality when you are abroad is not cheap but it is a prerequisite. I know from personal experience - my son was on his ‘gap’ year, travelling round the world and had got as far as Thailand where he had a horrific accident on the motorbike he had rented. To cut a long story short he was picked up from Koh Samui by a private jet and flown to Bangkok, as there were no hospitals that could deal with the extent of his injuries in the south of the country. He was on the slab for 10 hours - every bone in his head had been broken and there he stayed for at least two weeks - the bill - zero, de nada, rien.
The message for me is clear - this is the case of the well spent pound, dollar or euro - just do it.”

Now the other point that arises from this is that you should check your policy for exclusions. Many may specifically exclude motorbike accidents and certainly in Koh Samui, the frequency of those is alarming. I still wonder at the mindset of the tourists in particular (residents who do this should know better) who ride around without helmets and with young children on board. Traffic here is quite heavy now and the general standard of driving leaves a lot to be desired. It does not matter how good a driver you are, how careful you are, you cannot control the actions of others. Samui has many other pitfalls for the unwary visitor. Sand on the road is the same as ice and can have similar consequences. Palm fronds and coconuts falling from trees, potholes in the road, dogs running wild, all add to the dangers that will be encountered. My advice? Forget the bike. Hire a small Suzuki car and even then make sure your insurance is up to date and adequate.

Don't get too blasé visiting Koh Samui!

Last month I finished with some comments on how blasé we come about living on a tropical island and those comments related at that time about our surroundings and life style. At the beginning of this month I was reminded that one can come a little to blasé about other aspects of life here – simple things like crossing the road! Without going into detail I was hit by a motorbike and spent some time in hospital, X-Rays, MRI, 72 stitches in head and leg, multiple abrasions, hairline fracture of the C3 vertebrae. Luckily nothing life threatening but it could have been a lot worse. I did manage to get out of hospital in time to watch the Rugby at the weekend though! The point of this is not to look for sympathy (little of that I got here from my wife suggesting that after eight years it was time I had a Samui Tattoo to my golfing buddies saying this might help me to keep my head still when I tee off!) but to make the point of how important it is to have Accident Insurance here. I have lived here for eight years now and in that time have had the odd scrape none of which involved overnight stays in hospital and consequently quite affordable. This time however, with follow up out-patient treatment the bill is going to be near to Baht 100,000. Even if you can afford it that is a healthy amount to take out of your bank account and if the damage had been greater that sum could easily have tripled or quadrupled. I had insurance so everything was covered but please take this as a warning that one second you can be happily going about your business and the next lying in the road wondering what happened!

Although the political situation here is still a little unsettled the government has given further assurances that last years proposed changed to the Foreign Business Act will not be implemented. See the articles below. This is a least some positive news in a somewhat turbulent world economic climate. The economic and social problems in Europe at least and the UK in particular are making more and more people consider life overseas and Thailand for many is an attractive prospect. The life style and relative low cost of living being the main factors. Where in Thailand depends on individual preferences. Phuket, Koh Samui, Hua Hin, Bangkok, Pattaya, Chiang Mai or some remote village in Issan. There are many choices of location and in each many choices of property from relatively cheap condominiums to high end multi million dollar villas. The market here is still pretty slow, certainly not dead, but not what one would call exciting. Consequently there are quite a number of good deals around if you are thinking of buying and with the emergence of financing and in some cases title insurance these can be vary attractive. For some people concerned about visas, you have a choice of a retirement visa or membership of the Thailand Elite scheme. This is not for everyone as it is not cheap but a Five Year multiple entry visa renewable for life plus other benefits is certainly worth looking at. Contact me for further information if you are interested.

Another snippet of good news is that the Squirrels appear to be back. I have not seen any for at least four years and their demise was blamed on the itinerant work force that caught them to supplement their diet so removing part of the natural food chain which reportedly led to the uncontrolled outbreak of the Coconut Palm Beetle which devastated so many of the Coconut Palms. Just recently I saw two playing in the trees behind my office so hopefully they are here to stay.

Some of the articles reprinted from The Samui Express are from May during which time their web site was down pending the re-launch of their new web site.
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“For most of us the purpose of traveling to a developing country is to get the frisson of authenticity that we can’t get at home, and it annoys us no end when locals don’t play their roles correctly. Last week at my friend’s wedding in Koh Samui I had to listen to a long diatribe by a very nice Australian lady involved in the arts who was furious that Westerners were apparently forcing Thai people to live Western life-styles rather than leaving them to enjoy their own culture. In Koh Samui, I guess, there are too many refrigerators and motorcycles and not enough buffalo carts. I was going to argue that the Thai might themselves prefer the modern urban conveniences, and were perhaps indifferent about helping us foreigners achieve our much-desired authenticity, but I didn’t want to be thought a cold-blooded imperialist by the many nice people at the wedding.”
This is from a Financial Blog by Michael Pettis.

It rather puts into perspective the problems of the effect of tourism on indigenous people and the effect this has on their life style. It reflects also the common complaint we hear in Samui that Samui has become too modern and commercialised and it is not what it used to be! I find this something of a cynical approach – keep it as it was, let the local people live without clean water and electricity, telephones, television, the internet etc. so we can come and look at them living in poverty! Things change and it is the very people who spout this nonsense that have instigated the change simply by coming here. It is impossible for cultures to mix without some effect. The evolution of society is natural and it is natural for those that do not have to aspire to a better life. And why not! The evolution of society on Koh Samui may not be perfect but which of us can look back at our homeland and say that is any better. Would Koh Samui now have four modern hospitals without the advent of tourism? And before anyone says that they are mainly for the tourists, I suggest you visit them and see that a very large percentage of visitors are local Thai people. The roads are not great, we know that, but at least there are roads now instead of slogging along jungle paths to get from Chaweng to Lamai. No, Samui is not what it was and in ten years it will not be what it is now. It is only the people who were here years ago and remember it as it was who seem to have this chip on their shoulder. Most new visitors see it as it is now and can still see its charm and beauty. It is impossible to visit somewhere without leaving your footprint in some fashion and you cannot deny the right of the local people to want a better standard of living.

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Koh Samui Rumours and other news

As with last months Newsletter let me deal with the rumours first. This is scuttlebutt of course but interesting if it is true and I have heard this from more than one source. Are we going to get a second airport or not? My impression is that it is highly unlikely, however word on the wire has it that a certain low cost carrier is acquiring land in Don Sak for the purpose of building an airport there and providing a fast ferry service to Koh Samui. As Mr Ripley says “Believe it or not!”

It has taken them some time but the Samak government seem to be making some positive noises to make foreign investment more attractive. They have stated that the amendments to the Foreign Business Act that were proposed by the previous military backed regime will be scrapped. They are also reducing the minimum number of shareholders required in a company from seven to three so only two Thai shareholders will be required and the need to find a number of other shareholders who may or may not be legitimate is removed. There will also be reduced requirements in respect of the registration of the Memorandum of Association which can be done in one day instead of between nine and twenty one days plus the easing of requirements for the passing of special resolutions. More detail on this in the article reprinted below.

In last months Newsletter I discussed the situation with the application for Koh Samui to gain City Status and gave my reasons why I did not think it would happen. It appears I was not far wrong as latest reports state that the Interior Ministry has rejected the proposal. It did not specify the reasons for rejecting the proposal but apparently listed a number of options that might be taken. These have not been reported. More news on this as it becomes available. However, there is growing discontent among the local population that revenues from the islands number one industry, tourism, are not being used to improve the infrastructure in particular the roads. With local elections for the vacant post of Mayor outstanding this may become a focal point.

Every time you turn around there seems to be a new name added to the list of major hotel operators coming to Koh Samui. Conrad, Mandarin Oriental, Park Hyatt, Banyan Tree, Dusit D2, Hard Rock Hotel, Ibis, Outrigger Hotels & Resorts, Intercontinental, Sheraton (as Vana Belle), and then we seem to be running out of real names as we get the likes of U, W, X2 closely followed by IMM. The list goes on with Alila Hansar, Prana Samui, The Sarann, Saree Samui, Sirimaya (an Amari Hotel), and possibly also Club Med! A number of these have not announced the number of rooms they will be adding but of those that have I can see in excess of 1600 new rooms being added to the Koh Samui inventory so I suspect when all the facts are known we are looking at in excess of 2,000 by 2011.

Sometimes we get a little blasé about living on a tropical island surrounded by Coconut Palms and blue waters and which most of the time has an idyllic climate far away from the rain and cold of our European origins. Then something happens to remind us how lucky we are. This happened to me last week as I was driving over a hill in Taling Ngam. As I came over the brow I was confronted by the scene shown in the photograph on the left. The photograph really does not do the panorama justice but that is more to do with my photographic skills more usually employed snapping villas! Even after eight years here, Koh Samui can still surprise me – in the right way!


For the sailors amongst you the Seventh Koh Samui Regatta will be held this month between the 1st and 7th of June.
For the golfers the Bangkok Airways Open 2008 is being held between the 5th and 8th June at Santiburi Golf Club.

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For Festivals around Thailand visit the Tourist Authority of Thailand website.

Latest News from Koh Samui

Let me deal with the Rumours first! Last month I carried two articles from the Samui Express. One stated that the application for Koh Samui to be upgraded to City Status had been sent to the Provincial Government for approval. The second stated that the Governor had sent the application back without approval. Well, the latest rumour is that it has gone back to Provincial level and that “an up grade in status” is expected within two months. Now my understanding of the requirements for City Status (Thesaban Nakhon) is that it must have a population of 50,000 and a density of 3,000 per sq. kilometer. Samui has an area of 247 sq. kilometers which means the density is only 202 per sq. kilometer with the recent increase in registered population to exceed 50,000 so less than 10% of what is required. I suspect this is the reason that the Governor found to send back the application as it is generally agreed that Suratthani Province do not want to lose the income generated by Koh Samui. However, this is Thailand and there is usually a means to an end. Maybe they have found a way to “adjust” the requirements, or make the facts fit the requirements. The other alternative is that they may be going for a “Special Economic Zone” much like Pattaya, although I believe that would require Government Approval. Whatever, something seems to be on the cards and we must wait and see what transpires. Watch this space!

Phuket is also complaining about lack of funds to expand its infrastructure to keep up with development and the present Prime Minister has suggested setting up an executive board to speed up development. The proposed board would end the problem of provincial officials having no authority to make decisions on important matters and depending on directions from Bangkok, said the prime minister. There has been a lot of local opposition to this and one critic stated - "I disagree [with the idea] if it interferes with 19 local administration agencies in the province and if it is set up to serve political purposes," The academic, who is an expert on power decentralisation, also suggested the government conduct a study about turning Phuket into a special administration zone like Bangkok and Pattaya. I wonder where he got that idea from!

Good news for real estate is that the Government has reduced taxes on transfers and the Press Release from the Revenue Department is copied below. The main reductions are for the Transfer Fee which has been reduced from 2% to 0.01% and for Specific Business Tax which has been reduced from 3.3% to 0.1%. Also the first Baht 150,000 of Personal Income Tax is now exempt and with regard to real estate this affects the first Baht 150,000 of the calculated gain on re-sale. This is a slightly complicated area which I will not get into in the Newsletter but nevertheless reduces any potential tax on re-sale.

There is a move (starting in Bangkok apparently) to enforce more rigorously the helmet law for motorcycle riders which would now include the passenger and the helmet has to be of International standards. I think we all know that the law in Thailand in one thing and enforcement another, but for those of you who chose not to wear a helmet (not sensible, but all too frequently seen here) the fine will be Baht 500 EACH if the BIB on the island decide to go along with their Bangkok colleagues. Another law due to be enforced from 1st May is the smoking ban in bars and restaurants. Designated smoking areas are required and if the Bangkok experience is anything to go by this means outside. Fines for non-compliance are Baht 2,000 to the customer and Bang 20,000 for the owner.

For the sailors amongst you the Seventh Koh Samui Regatta will be held next month between the 1st and 7th of June.

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