Thailand Flood 2011

Oct. 11 (Bloomberg) -- Thai officials rushed to reinforce barriers and widen canals in Bangkok on concern the nation’s worst floods in more than half a century may spread to the capital later this week.

The deluge swept across the country starting in late July, killing 269 people, swamping factories operated by Honda Motor Co., Nikon Corp. and Canon Inc. and damaging more than 10 percent of rice farms in the biggest exporter of the grain.

Prime Minister Yingluck Shinawatra opened army camps to help house some of the 2.4 million people displaced by the floods, and asked authorities to accelerate efforts to protect the capital. The finance ministry yesterday cut its forecast for economic growth to 3.7 percent from 4 percent and said the disaster may cause 120 billion baht ($3.9 billion) of damage.

“It’s difficult to estimate the water volume, but if we can protect the flood barriers in three key points in the next one to two days, Bangkok should be saved,” Yingluck said yesterday at Bangkok’s former international airport, which has been turned into the country’s main flood-management center.

The situation is “quite worrisome,” Bank of Thailand Governor Prasarn Trairatvorakul said, adding that agricultural industry losses may total as much as 20 billion baht.

The disaster may reduce Thailand’s gross domestic product by 1 percentage point in the fourth quarter, increasing the likelihood that the central bank may cut interest rates by as much as 50 basis points by year-end to aid reconstruction efforts, HSBC Holdings Plc economist Frederic Neumann wrote yesterday in a report to clients.

In Bangkok, officials are rushing to build three additional flood barriers and plan to dig five more canals over the next seven days to drain water from the capital, Yingluck said.

Oct. 16 through Oct. 18 is the highest risk period for Bangkok, with low-lying areas near Suvarnabhumi airport and communities next to the river and canals the most vulnerable, the city’s Governor Sukhumbhand Paribatra said yesterday by phone. Officials are shoring up flood walls, preparing evacuation plans and readying medical supplies, he said.

“The influence of a tropical depression remains very strong in the central and eastern regions,” the Department of Disaster Prevention and Mitigation said on its website today. “That will cause more heavy rain in Bangkok and eastern regions over the next few days.”

Bangkok’s flood-defense efforts are focused on the Chao Phraya river, whose banks are lined with luxury hotels including the Peninsula, the Shangri-La and the Oriental, as well as the Bank of Thailand.

“We have increased the number of sandbags put in place to prevent water infiltration,” said Rashana Pimolsindh, a spokeswoman for Shangri-La Hotel Pcl. “There are several water pumps on standby at various points in the hotel.” Shangri-La hasn’t experienced any flood-related cancellations, she said.

Some supermarkets in the capital reported shortages yesterday because of delivery disruptions and panic buying, said Saofang Ekaluckrujee, senior corporate affairs manager at Ek- Chai Distribution System Co., which operates Tesco Lotus hypermarkets in Thailand.

“There was panic buying of dry groceries such as instant noodles and rice at most of our stores in Bangkok,” Saofang said by phone. “In some stores, there were shortages of dry food because the flooding has affected logistics. We are trying everything to secure supplies to meet demand.”

Thailand’s government will provide as much as 200,000 metric tons of rice from its stockpiles and asked local producers of instant noodles, canned food and water to increase production to prevent shortages, Permanent Secretary for Commerce Yanyong Phuangrach told reporters at the weekend.

“The situation is nowhere near crisis proportion just yet where food and water are concerned,” said Sukhumbhand, the Bangkok governor. “Major arteries to transport all these things to Bangkok are still open, so I hope it’s just temporary.”

North of Bangkok, authorities evacuated residents in the central province of Nakhon Sawan after a flood barrier was breached on the Chao Phraya river, said Wim Rungwattanajinda, a spokesman for the national flood center. As many as 650 patients are being evacuated from the province’s main hospital, Health Minister Wittaya Buranasiri told reporters yesterday.