Thread: Thailand : Infrastructure

Investigations are apparently picking up into systematic corruption that occurred under the Abhisit administration whilst Korn was Finance Minister. A fine one to be pointing the theoretical bone of corruption against infrastructural loans that have not even happened yet, and a shame he wasn't pointing the same bone back then.

just one small question ,

where is the money ?

Originally Posted by StrontiumDog

She said Thailand, as an Asean hub, plays an important role in boosting connectivity and that the government plans to invest $90 billion in infrastructure projects such as the Thai-Lao high-speed Train

Given that the Thai Super-Express Train takes 8 hours to travel from Bangkok to Khon Kaen what exactly do they call high-speed here? A honda 110 m/cycle with 5 up could travel at a quicker pace.

Originally Posted by StrontiumDog

She said Thailand, as an Asean hub, plays an important role in boosting connectivity and that the government plans to invest $90 billion in infrastructure projects such as the Thai-Lao high-speed train scheme and flood prevention and management projects.

Track work on the high-speed train is well underway.

Originally Posted by Mid

just one small question ,

where is the money ?

They are going to pay everyone off with 3 year old rice.

'Good only at borrowing' jibe haunts Pheu Thai Party | Bangkok Post: news

InPRINT

'Good only at borrowing' jibe haunts Pheu Thai Party

The refrain once hurled at the Abhisit government has boomeranged, damaging the Yingluck administration

• Published: 20/10/2012 at 03:54 AM
• Newspaper section: News

The Yingluck government is planning to borrow 2 trillion baht at the beginning of next year to invest in infrastructure for the future as recommended by Virabongsa Ramangkura, chairman of the Strategic Committee for Reconstruction and Future Development, noted Post Today.


The State Railway of Thailand is one agency that will be affected by the 2 trillion baht infrastructure investment. The plan has come under heavy criticism over the extent to which the borrowing will hurt the Thai economy.

The new round of borrowing will be the biggest in Thai history.

It was only two years ago when the Pheu Thai Party, while in opposition, used to harshly criticise the Abhisit government with the "Good only at borrowing" label.

When the Abhisit government came to power, it issued a royal decree in 2009 to borrow 400 billion baht to stimulate the economy when the world was in a great recession from the US subprime problem that started in 2008-2009.

Since then, Pheu Thai and the red shirts have used this issue to criticise the Democrat Party. When former prime minister Abhisit Vejjajiva visited constituencies, red-shirt supporters would show "Good only at borrowing" posters to heckle him.

Mingkwan Saengsuwan, former deputy prime minister and commerce minister during the Samak government, led the Pheu Thai opposition during the no-confidence debate in March 2011. He alleged that since the change from absolute monarchy in 1932, Thailand had had 26 prime ministers with accumulated public debt of 870 billion baht. But when Mr Abhisit became prime minister and administered the country for only two years, the public debt had ballooned to 4.3 trillion baht.

"With 4.3 trillion baht in public debt, the Thai people on average must shoulder a debt burden of 64,000 baht per head. If the government continues to spend recklessly, disaster awaits the Thai people in the near future," Mr Mingkwan said.

Mr Abhisit replied that the debt level was sustainable, citing the unprecedented number of tourist arrivals and record exports. He insisted that the government needed to borrow to revive the local economy.

Mr Abhisit noted that during the Thaksin administration public debt was at 42.75% of GDP while in March 2011 it stood at 41.94%.

During the no-confidence debate, Surapong Tovichakchaikul, who was then an MP for Chiang Mai, ridiculed Mr Abhisit as well as then finance minister Korn Chatikavanij as lacking life experience, not knowing the poor, and not knowing how hard it is to earn money because they were never without.

"I want to warn the government not to steer the country to disaster by excessive borrowing, but find means to bring revenue into the country," said Mr Surapong who is now foreign minister in the Yingluck administration.

During the big red-shirt rally in June 2009 held at Sanam Luang to pressure Mr Abhisit to dissolve the House and hold a general election, Thaksin phoned in to strongly lambaste the Abhisit administration.

"This government is addicted to three things: borrowing, raising taxes and persecution. To borrow you must have a clear goal, not just do it to plug the money shortage. It is useless to borrow to spend on small projects such as dirt-free roads, digging/dredging canals. This reminds me of Miyazawa spending which was wasteful," Thaksin said.

Now the Pheu Thai Party is in government. The "Good only at borrowing" theme has now come back to haunt Pheu Thai because the Yingluck government's borrowing is now at record levels, several times more than the Abhisit administration's.

The Yingluck government created a deficit budget for 2012 of 400 billion baht and in 2013 of 300 billion baht. Last year the government issued a royal decree to borrow 350 billion baht for flood prevention and mitigation.

The decree also compels the Bank of Thailand (BoT) to grant soft loans worth 300 billion baht to financial institutions to re-lend to those who suffered from the great floods last year.

The same decree also transferred 1.14 trillion baht worth of debts of the Financial Institution Development Fund (FIDF) upon the shoulders of the central bank, allegedly to reduce the public debt figure so that the government will have more room to borrow without exceeding the 60% GDP limit imposed by the Finance Ministry for fiscal discipline reasons.

Post Today noted that by transferring the FIDF's debt from the Finance Ministry to the BoT, the Yingluck government is ready to push for the 2 trillion baht borrowing bill for several megaprojects for long-term investment in the country's infrastructure.

Post Today concluded that Pheu Thai's "Good only at borrowing" tag which the party used successfully against the Democrat-led government can now be applied to the party itself, and is even more appropriate.

Thailand's BTS Plans $1.5B IPO for Infrastructure Fund - WSJ.com

• Updated December 13, 2012, 10:40 a.m. ET

Thailand's BTS Plans $1.5 Billion IPO for Infrastructure Fund

By PHISANU PHROMCHANYA And P.R. VENKAT

Thailand's sole elevated-railway operator, BTS Group Holdings PCL, BTS.TH +1.56% aims to raise at least $1.5 billion next year through an initial public offering of an infrastructure fund, a deal that would ranks as the country's largest-ever IPO.

BTS is the latest company seeking to cash in on Thailand's sizzling stock market. Share sales this year have more than doubled to $1.7 billion, from $548 million in 2011, according to data provider Dealogic. Among the year's IPOs were Tesco Lotus Retail Growth Freehold & Leasehold Property Fund, TLGF.TH 0.00% which raised $602 million in March, and Ananda Development PCL, ANAN.TH 0.00% which raised $183 million in November.

The biggest IPO is that of Thai Oil PCL, TOP.TH 0.00% which raised $784 million in 2004, according to Dealogic.

The company's subsidiary, Bangkok Mass Transit System Ltd., holds a concession to operate the capital's 23.5-kilometer skytrain system through 2029.

"We are aiming to launch the IPO in February," BTS Group investor relations official Chama Savetbodi said.

Bankers will start testing investment appetite soon, said two people with knowledge of the deal.

Infrastructure funds raise capital to invest in infrastructure assets such as toll roads, airports, power plants, water treatment plants, railroads and other transportation infrastructure and provide returns to investors based on the assets' revenue. BTS plans to own one-third of its infrastructure fund, and the IPO's proceeds would finance mass-transit rail projects.

The company's subsidiary, Bangkok Mass Transit System Ltd., holds a concession to operate the capital's 23.5-kilometer skytrain system through 2029.

The Thai government plans to expand rail coverage for greater Bangkok to 508 kilometers by 2029, from the current 79.5 kilometers. BTS plans to vie for concessions in government auctions.

Bidding for at least two rail lines totaling 59.5 kilometers is scheduled in 2013 as part of a plan to expedite construction of 10 mass-transit rail lines within four years.

Bangkok has among the worst traffic congestion in the world, and its rail network provides respite for commuters from the city's crammed motorways. BTS's ridership has risen to 179 million in the fiscal year that ended March 31, from 59 million rides in the fiscal year that ended March 31, 2001.

Oodles of lovely graft money to be had for "the right people" springs readily to mind!

http://www.nationmultimedia.com/poli...-30198913.html

Govt hasn't kept its word: Korn

Chanikarn Phumhiran,
Petchanet Pratruangkrai
The Nation January 29, 2013 1:00 am


Only 1 per cent of executive decree for Bt350 billion has been used, so it wasn't urgent, he tells court

Democrat Party deputy leader Korn Chatikavanij yesterday tacitly told the Constitution Court it had been duped by the government into endorsing an executive decree for a Bt350-billion loan.

Korn submitted an open letter to Constitution Court President Wasan Soypisudh yesterday, telling him that issuing the executive decree was apparently not as urgent as the government had claimed.

After the decree took effect on January 27 last year, the government had only borrowed Bt10 billion under the decree's loan ceiling, Korn said.

However, Deputy Prime Minister and Finance Minister Kittiratt Na Ranong, reaffirmed yesterday the government would be able to open bidding for the private sector to join the water management project by February to April this year, to ensure that the flood prevention measure would go ahead.

Korn, after submitting the letter via Nipat Phodejthamrong, director of the Constitution Court Office, said he did not intend to tell the court it had made an erroneous ruling - he just wanted the court to use the Bt350-billion decree as an example for future cases. He said the court may simply not have had enough information when it considered the matter.

When the Yingluck Shinawatra government issued the executive decree to allow itself to borrow Bt350 billion for comprehensive water management projects, the Democrats asked the Constitution Court to rule whether the decree was legal or not.

The court ruled that the decree was constitutional because the government urgently needed the loans to start flood-prevention projects.

'Only Bt4.64 billion drawn '

Of the Bt10 billion loan, only Bt4.64 billion has been drawn for projects, Korn said, so less than one per cent of the Bt350 billion had been drawn for spending.

Korn said there are only five months left before the loan executive decree expires - on June 30 - but so far the government had offered no concrete plan for water management projects to be financed by the remaining Bt340 billion.

So, it was unlikely the government would be able to borrow the Bt340 billion in time before the executive decree expires.

"From the facts, the government has not lived up to its testimony to the Constitution Court that it had an urgent need to issue the executive decree," Korn said.

Government spending for 2012 showed the government could have obtained the necessary loan via normal procedures and the 2013 Budget Bill, or it could have obtained the loan via the 2005 Public Debt Act, or by issuing an additional budget bill.

"When the Constitution Court considered the case, the court did not have the information for considering whether it was true, as the government claimed, that it really needed to borrow the money and that national stability would be affected had the loan not been approved. I understand that the court treated the government on its honour that day," Korn said.

But he said from the example of the Bt350-billion loan decree, he feared the government may lack transparency - when it sought Bt2.2 trillion for infrastructure development for seven fiscal years from 2013 to 2020 - as it lacks details on how it will spend that massive loan as well.

Kittiratt said: "The government is proceeding with water management projects worth Bt350 billion. The bidding should open this February. The auction will emphasise transparency. It will be open internationally and clearly show the bidding results to the public."

Meanwhile, he believed current baht appreciation should be well managed by the Bank of Thailand. He insisted the government would not intervene to manage in the currency. He said Thailand would have many projects that would rely on the import of machinery for infrastructure. And the baht's current strength should help the import sector.

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City, National govt must work together on flood prevention - The Nation

City, National govt must work together on flood prevention

Pongphon Sarnsamak January 28, 2013 1:00 am


Climate change means 2011 disaster could be repeated, experts warn

There is no guarantee that Bangkok will not experience another flood like the 2011 disaster, given the threat of severe weather caused by climate change. Hence, water experts see the need for further preventive measures from the new Bangkok governor and closer collaboration with the national government to mitigate future negative impacts.

"No more blame game," Professor Dr Thanawat Jarupongsakul, head of Chulalongkorn University's Unit for Disaster and Land Information Studies, said. "The [next] Bangkok governor and the government should work together to solve the problem and cope with flood situations."

In 2011, a giant flood paralysed the capital with water rising as high as 2.5 metres in adjacent provinces. Millions of residents were affected and hundreds died. Many had to leave home for a few months and spent a great deal on renovation. Inner city areas - where the business centre is - were saved thanks to millions of sandbags and thousands of water pumps, but the Bangkok Metropolitan Administration was heavily criticised for not helping drain water from the northern provinces.

Bangkok is located on the tail of the Chao Phraya, the key river that carries water from the North to the Gulf of Thailand.

The risk of a reoccurrence exists because Bangkok is located on flat and low-lying land with an average elevation of just 1.5 metres above sea level. A World Bank report released last November noted that global temperatures could rise as much as 4 degrees Celsius by 2100, from the current global mean temperature of 0.8C above pre-industrial levels. Ice sheets will melt and scientists predict the sea level will rise by more than 3 feet by the end of the century.

"The new Bangkok governor should consider that flooding not only affects Bangkok but other provinces as well," Thanawat said, adding that the city needs a flood prevention plan that can cope with any reoccurrence in the next 100 years.

Suthat Weesakul, director of the Asian Institute of Technology's Water Engineering and Management Program, said the new governor needs a new view on water and flood management. Closer cooperation with nearby provinces was necessary, as well as a long-term flood plan that includes shifting houses from waterways.

The designation of flood-risk zones was a top issue for the new Bangkok governor to prevent damage from floods in the future, although designating flood-risk zones might affect the price of land in each area, he said.

Prasert Povichien, from the Thai Hydra Association, said the new governor must study and grasp flood management and prevention, as well as drainage systems, such as the flood prevention infrastructure in each area.

He agreed with Suthat that the new governor must work with other provincial governors to draw up a flood prevention plan, especially for water diversion.

Revising city planning and flood-risk zones were key matters for the new governor.

"The [next] Bangkok governor cannot work alone to deal with the flood situation," he said.

To prevent floods in the long-term, he suggested that dykes along the Chao Phraya be improved to tackle the rise in water level caused by tidal influences. To date, the height of the flood prevention dyke along Chao Phraya is only 2.5 metres above sea level. The new Bangkok governor must raise the height of dykes.

The governor also needed to build a sluice gate to drain water out into the main nearby rivers, such as Bang Pakong and Ta Chin.

He also called on new governor to improve the capacity of pumps that will be used to drain water. At present, water pumps are able to drain only 3 cubic metres of water a second. Bangkok, like other big cities in the US or The Netherlands, needed pumps that can drain at least 300 cubic metres per second, right up to 600 cubic metres a second.

Chawalit Chantararat, executive director of the water-management experts, TEAM Group, said that cooperation with nearby provinces such as Nonthaburi and Pathum Thani were a key aspect in handling floods. Preventing floodwater from flowing into the capital alone would not resolve the problem. Bangkok needed to drain some amount of water through the capital and let it flow smoothly into the sea.

"[Officials in all provinces] should know what each other is doing to cope with flooding," he said.

The new governor also should pay attention to resolve flood problems in 15 risky areas, such as Sathorn, Phaya Thai, Wattana, Din Daeng, Wangthonglang and Jatuchak.

Improving the canal system and tunnels to drain water was another important issue to focus on, he felt.

For more details, see the flood prevention equipment graphic on Thailand Politics Update: News for Thailand, Myanmar, Burma, ASEAN, AEC news, Thailand News Today : The Nation

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สำนัà¸�ข่่าวà¹�ห่งชาภ•à¸´ : Finance Minister affirms govt able to seek 350 billion-baht loan

Finance Minister affirms govt able to seek 350 billion-baht loan



Date : 29 มกราคม 2556

BANGKOK, 29 January 2013 (NNT) – The Finance Minister has assured that the government will be able to acquire the entire amount of the 350 billion baht for its water management projects.

According to Finance Minister Kittiratt Na Ranong, the government’s water management and flood prevention projects are expected to be opened for bidding during February to April. He affirmed that the money for these projects will be acquired through an issuance of executive decree, allowing the ministry to seek loans of that amount. The government will obtain the entire amount of 350 billion baht by June 30th.

As for the Japan International Cooperation Agency (JICA)’s proposition to build the Ayutthaya-Bang Sai floodway, Mr Kittiratt said it was beneficial to the country, saying the government will consider all the bidders' plans. He insisted that all process will be transparent as this is an international bidding project.

Meanwhile, Democrat Deputy Leader Korn Chatikavanij has submitted an open letter to the Constitution Court stating that the government has no repayment plan for the 350-billion baht loan or a clear water management project.

It explained further that only 4.6 billion baht or 1% of the budget set aside since last year for water management has been disbursed so far, which shows that the the matter is not as urgent as claimed by the government. Mr Korn said the disbursed fund was also used for other projects not related to water management. He alleged that the government intended to wrongfully spend the money and no one could check it; the move would thus breach financial discipline and damage the country.

Anyone planning on going to the Ratchada soapies for a few months, forget it. They will be full for the next few weeks with the politicians, government officials, and sports cars salesmen, celebrating and after that with the same people being entertained by firms taking them out for a drink, a jump, and a take away brown paper bag.

30bn baht will, according to statistics, go into the pocket of government officials. They will be celebrating for a while.....

Originally Posted by pseudolus

Anyone planning on going to the Ratchada soapies for a few months, forget it. They will be full for the next few weeks with the politicians, government officials, and sports cars salesmen, celebrating and after that with the same people being entertained by firms taking them out for a drink, a jump, and a take away brown paper bag.

30bn baht will, according to statistics, go into the pocket of government officials. They will be celebrating for a while.....

Which ones? about 10% probably will, but thats pretty much it, there's no denying corruption is insane in this country, but seriously, by "insane" I mean roughly 10% but thats already alot of money.

Apart from that, better buy stock in Ital-Thai and CK!

Also, I'm quite positive the person who thought up this plan was shouting "USA! USA!" the entire time lol. (I'm American, I get to make fun of my own people)

Bollocks. Looks like we're fucked. we own a fair chunk of land in the 'future water retention' area. Guess we should try and unload it quick and cheap before noone will buy it.

B2.2 trillion debt seen as affordable | Bangkok Post: news

B2.2 trillion debt seen as affordable

• Published: 7 Feb 2013 at 00.00
• Newspaper section: News

Thailand's finances are healthy enough for it to borrow 2.2 trillion baht to spend on infrastructure development, senior Finance Ministry officials say.

A House committee on national debt yesterday asked about Thailand's readiness for the planned borrowing. Most members of the panel asked finance officials about the country's financial status.

Suwit Rojanavanich, deputy director-general of the Public Debt Management Office, told the committee that last year Thailand's public debt stood at about 4 trillion baht and accounted for 40% of its gross domestic product (GDP). With this level of debt, Thailand remains able to borrow more and repay efficiently.

He also quoted the Bank of Thailand as saying the country's foreign exchange reserves amount to more than US$180 billion (5 trillion baht).

He believed Thailand's assets were worth more than its debts.

Mr Suwit said the country was rich and could afford to repay its debts.

Democrat MP for Trang, Somboon Uthaiwiankul, asked if the government could raise the funds by other means.

Mr Suwit replied that without borrowing, the government would have to raise the value-added tax (VAT) from 7% to 10% or 15% and increase the tax on luxury goods. He said the alternative was technically possible but was not the government's choice.

Supak Chaiyawan, director for fiscal and budgetary policies of the Fiscal Policy Office, said the government would be able to repay the 2.2-trillion-baht debt in about 50 years and its public debt would be capped at 50% of GDP.

She said the government will not allocate an annual budget to repay the debt in the first decade of borrowing but would wait for income from its investment projects.

She said the infrastructure projects will increase economic growth by 1% and create more than 100,000 jobs.

Transport Minister Chadchat Sittipunt said the infrastructure projects would encompass expanding transport networks inside Thailand.

Officials are considering which projects should be implemented using normal annual budgets, private investments or borrowing and they are scheduled to reach a conclusion in a month.

Mr Chadchat discussed the process of issuing a law to authorise the borrowing with Prime Minister Yingluck Shinawatra, Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong and PM's Office Minister Niwatthamrong Bunsongphaisan yesterday.


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Transport strategy launched | Bangkok Post: news

Transport strategy launched

• Published: 7 Feb 2013 at 00.00
• Newspaper section: Business

The government yesterday unveiled transport and logistics development strategies worth nearly 2 trillion baht, with the plans expected to go before the cabinet for approval within a month.



The strategies are designed on three key pillars _ connectivity, sustainability and mobility.

Transport Minister Chadchat Sittipunt said the connectivity strategy covers key checkpoint development and expansion of Suvarnabhumi airport and Laem Chabang port.

The sustainability strategy includes dual-track rail improvement, 10 mass transit systems in Bangkok and the first phase of four high-speed train projects linking Bangkok with Hua Hin, Pattaya, Nakhon Ratchasima and Phitsanulok.

The mobility strategy will centre on upgrading land transport, mainly to link Bangkok with promising tourist destinations such as Nakhon Sawan, Phitsanulok, Udon Thani and Khon Kaen.

Prime Minister Yingluck Shinawatra yesterday called a meeting with Deputy Prime Minister Kittiratt Na-Ranong, Mr Chadchat and National Economic and Social Development Board secretary-general Arkhom Termpittayapaisith.

Mr Chadchat said the rail and mass transit projects may not be attractive to public-private partnerships because investors would not make any returns for a long time. The government may need to invest in civil works and later open bids for private operators to manage the train network.

He said China, Japan and France have approached the government to jointly build the high-speed train network.

The State-Owned Enterprises Policy Committee yesterday ordered the State Railway of Thailand and the Bangkok Mass Transit Authority to draw up plans to tackle their huge debts.

Minister supports 'no-bribe' agreement - The Nation

Minister supports 'no-bribe' agreement

The Nation February 8, 2013 1:00 am

Chadchart welcomes scrutiny of Bt2.27-tn construction investment; backs anti-graft group's proposal

Transport Minister Chadchart Sittipunt yesterday supported a proposal that those involved in state construction projects be required to sign an "agreement of virtue" promising not to accept or offer bribes, in a bid to push forward the government's Bt2.27-trillion infrastructure investment plan.

The minister, who has oversight of the huge infrastructure investment and its annual budget of about Bt100 billion, said the Anti-Corruption Organisation of Thailand (ACT) proposal, aimed at preventing bid fixing, would be applied to all projects under his ministry's responsibility.

"The ACT proposal is good. I like it. And I believe the officials involved will be happy to have more people help them with the scrutiny," he said after meeting ACT representatives at the Stock Exchange of Thailand.

Among the pilot projects implemented under the anti-graft campaign's proposal would be the Bt13-billion procurement of 3,183 buses for the Bangkok Mass Transit Authority, the construction of a second phase of the Suvarnabhumi Airport worth Bt50 billion-Bt60 billion, and the expansion of the motorway, according to the transport minister.

Transport Ministry permanent secretary Wichean Potephosri was assigned to study the proposed "agreement of virtue" in detail to ensure it complied with the law and to determine whether it would be legally binding, according to Chadchart. The results of the study are expected within a month.

"This proposal will be applied at the Transport Ministry first. If it works well, the Cabinet will be asked to have other state agencies adopt it as well," the transport minister said.

Chadchart said the main forms of irregularity involving bidding for government projects are:

nsetting high median prices to allow the winner to make high profits and pay kickbacks;

nsetting the specifications in such a way that only certain bidders are qualified; and

nallowing work of poor quality to pass in exchange for bribes.

ACT chairman Pramon Sutivong said yesterday that his group's proposal calls for both state agencies that own projects and private firms who bid for the projects to sign an agreement that they would not take or offer bribes.

"Anyone who refuses to sign the agreement will not be allowed to bid. Those who violate the agreement's terms will face legal action," he said.

The anti-graft campaign will discuss the proposal with Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong today and plans to ask the Cabinet to apply the proposal to all ministries as a measure to ensure transparent bidding on government projects, according to Pramon.

He praised the transport minister for agreeing to the ACT proposal.

"The Transport Ministry is a major agency that actually spends the budget [for construction projects]. This will be an important turning point" in the fight against corruption, he said.

In addition to the "agreement of virtue", the ACT called on the government to make the anti-corruption fight a national priority, to allow independent observers to monitor all stages of bidding, and to appoint the group's representatives to the Transport Ministry's Centre Against Corruption to help with the scrutiny.

The ACT vowed to closely monitor implementation of the Bt2.27-trillion investment plan.

According to a Global Financial Integrity report released in mid-December, an average of US$6.42 billion (Bt192.6 billion) a year illegally flowed out of Thailand between 2001 and 2010. A large portion of this was believed to have been earned through corruption. Thailand ranked 13th in terms of the outflow size among the 143 developing countries studied.

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Government's fortunes hinge on transport scheme - The Nation

burning issue

Government's fortunes hinge on transport scheme

Avudh Panananda
The Nation February 8, 2013 1:00 am

The government will sink or swim depending on the actions of three individuals - Prime Minister Yingluck Shinawatra, Finance Minister Kittiratt Na-Ranong and Transport Minister Chadchart Sittipunt.

The political mercury is slated to soar in April and the fate of the government will hinge on how well the three can rein in coalition and opposition politicians.

Under Yingluck's leadership, Thailand is poised for an ambitious transformation of its logistics and transport infrastructure.

The spending outlay of almost Bt5 trillion, of which about Bt2 trillion will be financed by public loans, is one of the largest public investments in the country's history.

The resulting economic transformation, if completed in seven years to coincide with Yingluck's second term, will make Thailand the logistics hub that links Asean countries with India and Southern China.

The government has committed to this massive investment in the hope that it will boost the economy in the face of the global slowdown.

From an economic perspective, Yingluck is doing the sensible thing to cushion the country from the volatile economies of Japan, Europe and the US.

The unanswered question is whether the government can control the domestic political situation so as to make its economic visions a reality.

Despite the fact that the prime minister has frozen all controversial agendas, such as the charter rewrite, pardon for political protesters and amnesty for her brother Thaksin, political stability is still fragile.

But it is coalition MPs, rather than opposition lawmakers, who are posing the threat to the government.

Since Yingluck surprised them by delaying Thaksin's homecoming, the Democrats have been unable to regain their voice as an effective opposition.

Although the government is on track to launch a legislative debate on borrowing the necessary Bt2 trillion next month, the main opposition party has not even started to map out a strategy to oppose such a spending outlay.

Despite the opposition's disarray, Government House strategists predict there will only be time for a first reading of the loans bill before the legislative adjournment in April. Expectations are that its full passage will only be secured in the third quarter of the year.

The Democrats will certainly cite fiscal discipline as a legitimate reason to delay the bill's passage for as long as possible.

But the real obstacles to the bill's enactment come from within the Pheu Thai Party.

Yingluck, Kittiratt and Chadchart need time to convince their allies to abandon individual interests for the sake of the greater good.

Pheu Thai MPs and their leaders are unlikely to bicker in public, but the strain in their ties can not be overlooked.

While Yingluck is preaching transparency on her anti-graft crusade, at the same time she is picking investment proposals linked to Pheu Thai MPs and ignoring deals brokered by Thaksin.

If this unfair access to the pie is to continue, then the government could be undone by its ambitious plans.

For the past few months, Kittiratt has been in the hot seat, facing rebukes from Thaksin as well as Pheu Thai MPs and coalition allies. He is at his wits' end over how to please all political bosses at once.

Chadchart is having a hard time trying to deliver political expediency without compromising the integrity of investment projects.

He has about a month to come up with a practical plan to distribute a few crumbs to coalition and opposition politicians in exchange for their green-lighting the projects.

The stakes could not be higher. If Yingluck, Kittiratt and Chadchart fail to push through the economic transformation, then the government is at risk of losing its grip on power.

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Debt-wary govt to trim infrastructure spending | Bangkok Post: news

Debt-wary govt to trim infrastructure spending

• Published: 9 Feb 2013 at 00.00
• Newspaper section: News

The government will trim the budget for infrastructure investment to 2 trillion baht in a bid to limit public debt to a maximum of 50% of gross domestic product, Deputy Prime Minister Kittiratt Na-Ranong said yesterday.

Mr Kittiratt, also the finance minister, said details of the investment package and a bill authorising loans of 2 trillion baht will be proposed for cabinet endorsement in mid-March.
The bill will be forwarded to parliament at the end of next month or in early April.

The government had announced a plan to invest 2.2 trillion baht in infrastructure projects over the next seven years, of which 80% would be spent on rail systems. Thailand's current debt to GDP is slightly above 40%.

"We will limit the spending to about 2 trillion baht so debt to GDP will not exceed 50% although we have a targeted ceiling [of debt to GDP] at 60% and I have many more investment projects," Mr Kittiratt said on the sidelines of a forum hosted by the Asian Development Bank (ADB) on reforms to the Thai rail sector.

According to the Public Debt Management Office (PDMO) at the Finance Ministry, of the total 1.6 trillion baht to be spent on rail projects, around 47%, or 753 billion baht, will fund high-speed train services.

About 386 billion baht will be allocated for projects under the Mass Rapid Transit Authority of Thailand, 95.5 billion baht for those of the State Railway of Thailand (SRT) and 372 billion to install a metre gauge railway system.

Theeraj Athanavanich, the PDMO's director of public infrastructure project financing bureau, said the domestic financial market is favourable for the government to mobilise fund with current excess liquidity of over 1 trillion baht.

Chula Sukmanop, director-general of the Office of Transport and Traffic Policy and Planning, vowed to push ahead the SRT's reforms, saying the rail sector has been overlooked. The SRT's financial obligations for infrastructure costs have resulted in its heavy debts.

According to the Transport Ministry, the SRT has shouldered an accumulated loss of 100 billion baht, including last year's loss of 10 billion.

The ADB said passenger traffic in the rail system has tumbled by 40% since 1992, while freight traffic had dropped 30% since 2002 despite the fact that it is more economical than other types of transport.

James Leather, ADB transport specialist, said the first priority for the SRT's reforms is transferring the 100-billion-baht debt to the government and recapitalising the agency with 3 billion baht in working capital.

"The SRT cannot pay for infrastructure and be a viable enterprise," he said.

"Railways with low traffic volume such as the SRT cannot cover infrastructure costs with operating revenues."

The full maintenance of tracks to keep them in good condition would cost 6.5 billion baht a year.

The SRT, however, has lacked the ability to fund track maintenance for 30 years. This has led to the current poor conditions of them, he said.

http://blogs.ft.com/beyond-brics/2013/02/11/thailand-will-the-building-never-cease/#axzz2KYYohP2o

Thailand: will building never cease?

Feb 11, 2013 3:05am
by Jake Maxwell Watts



Thailand’s appetite for construction and public debt appears far from sated, judging by a huge infrastructure spending bonanza now poised for approval by the government.

At a time when most capitals are scrambling to reduce national debt, the Thai government is finalising plans for a long-promised infrastructure building spree estimated at Bt2,000bn ($67bn) that some critics warn will tip public debt over 50 per cent of GDP, from its current 41 per cent level.

Of course there will be huge benefits including the boost such spending will give the domestic economy, amid uncertainty over the direction of some key export markets. But the big question for economists and many ordinary Thais is: will it be worth the cost?

While the government’s programme will cover 57 separate projects nationwide, ranging from train lines to airport upgrades, over three quarters of the planned budget has been earmarked for “sustainability”, which includes high-speed rail and an extension of the Greater Bangkok elevated rail service dubbed ‘Skytrain’.

No doubt this is cause for celebration among Thailand’s latest crop of first time car owners, who, due to a recent government subsidy, are hitting the road in record numbers just to sit in stationary traffic.
The case for improving Thailand’s infrastructure network seems compelling. In October last year the chairman of a government development committee admitted that the country’s infrastructure was “running at full capacity.”
Thai businesses spend around 14.5 per cent of GDP each year on logistics, according the Federation of Thai Industries. The economy depends on its export industries, which in turn depend on an inadequate and crammed road network. Thailand has just over 63,300km of major roads but only 3,900km of single track railway, much of which runs excruciatingly slowly.

Yet, critics say the infrastructure proposals are excessively ambitious. Thailand’s public debt is already at Bt3,460bn ($116bn), which, according to the World Bank’s lead economist for Southeast Asia, is sustainable. But, the government should “redirect some of the funds spent on stimulus programmes to social programmes that address long-term needs such as old age pensions and those that reduce inequality and increase people’s skills”, he said.

Other experts contend that the government hasn’t fully thought through how it intends to raise the money to finance its ambitious programme.

Last week, the transport minister admitted to local media that rail and mass transit projects, which form the bulk of the programme, may not be attractive to private investors due to a slow rate of return.

But he did say that companies from China, Japan and France have expressed interest in proposals for a 745km high-speed rail link between Bangkok and the northern city of Chiang Mai. Singaporean businesses were also invited to bid for contracts during a recent meeting between the two countries’ foreign ministers.

In 2012, 60 per cent of foreign investment applications, with a combined value of Bt374bn ($12.5bn), were made by Japanese companies, according to CIMB analysts. Japan has been Thailand’s number one investor for many years, with the European Union, US and China trailing behind.

Thailand has done well to rebound so strongly from devastating floods in 2011, which destroyed thousands of businesses and knocked investor confidence. Investment applications in the fourth quarter of 2012 rose 203 per cent to 689bn baht ($23.1bn) on the year before.

Indeed, if the terms are right, foreign interest in any construction tenders emerging from the infrastructure bonanza is entirely possible – not just because of the big pot of money, but also due to the success of some of Thailand’s mass transit companies, which have benefited substantially from consistently growing passenger numbers. BTS Group, for example, which runs Bangkok’s Skytrain service, is poised to list an infrastructure fund on Thailand’s stock exchange which looks likely to be the biggest in the country’s history.

Despite criticism about funding problems, the Thai government should get credit for ambition – and, say supporters, for pushing a plan that will provide some welcome economic stimulus. But investors may be cautious about how the infrastructure budget will be raised and allocated. From the outside, Thailand appears much more advanced than many of its neighbours, but still suffers from widespread graft and budget-skimming, judging by the steady string of scandals over public works contracts.

On Transparency International’s 2012 corruption index, Thailand dropped eight places to 88 of 176, sharing the spot with five other countries including Malawi, Morocco and Zambia.

Clearly, raising the money for an ambitious infrastructure plan is only half the challenge. Spending it is the other half.

Thailand: PM unveils $90bn infrastructure scam

http://asiasentinel.com/index.php?op...193&Itemid=214

Thailand's Got a Plan

Written by John Berthelsen
Wednesday, 20 February 2013

Thaksin's master infrastructure scheme is back - and it might make the country the hub of Southeast Asia

The news that Thailand recorded the fastest growth in the fourth quarter of 2012 since the country began compiling economic data in 1993 is focusing attention on a country suddenly on the move after more than a half decade of political and economic crisis.

The record 18.9 percent gross domestic product fourth quarter year-on-year growth is admittedly coming off a low base from the disastrous floods that inundated the center of the country in late 2011, crippling the extensive foreign-owned assembly industries north of Bangkok. Nonetheless there is a growing feeling that at least for now Thailand has put behind it the internecine infighting that paralyzed the country for more than six years.

It also seems the extensive development plans that former Prime Minister Thaksin Shinawatra was planning before his 2006 ouster in a royalist coup are again underway in the hands of his sister, Prime Minister Yingluck Shinawatra, who is running the country as his proxy while he remains an international fugitive on corruption charges.

Under Thaksin, for instance, the Thai government entered talks with Laos and China about rail links connecting the southern province of Yunnan with Laem Chabang, the container port that serves Bangkok. The coup led to a long series of interim governments that largely ignored those plans in favor of ultimately pointless political battles designed to keep Thaksin at bay.

But with Yingluck's Pheu Thai Party winning a substantial enough victory in 2011 national elections to form a government, Thaksin's master plan reemerged. Then came the floods. Sensibly enough, the first major public works beginning this year are a Baht 350 billion (US$11.7 billion) water resource management scheme designed to mitigate massive flooding. Some Baht 99 billion of that is to be spent this year.

Beyond that, however, the Asian Development Bank is assisting on a series of projects designed to make Thailand the hub of a mainland Southeast Asian regional complex connecting Myanmar, now that the country is emerging from its economic isolation, as well as Laos, Cambodia, Vietnam and other countries throughout the region. It is all part of the drive for Asean "connectivity" ahead of the region becoming an economic community after 2015.

With the ADB's help, a Greater Mekong Subregion Highway Expansion Project will upgrade hundreds of kilometers of two-lane national highways to four-lane divided standard. The project will also assist Thailand's Department of Highways in implementing a Strategic Intercity Motorway Network along three corridors radiating out from Bangkok to a distance of 200-250 km.

This interconnectivity, running rail and road lines out into the subregion, would make Thailand the hub for delivery of fruits, vegetables and a wide range of other natural resources from throughout Southeast Asia, substantially enhancing Bangkok's importance as a regional hub to supplement its role as a center of car and electronics manufacturing. The track gauge is expected to be compatible with China's high-speed rail system, although it will be fast rail rather than high-speed.

As it stands now, according to an analysis by the Hong Kong-based Asianomics financial research firm, the government envisions 55 projects costing Baht 2.27 billion (around 20 percent of 2012 GDP) that are due for completion by 2020, with about 70 percent to be financed with debt. That is estimated to take the public debt to GDP ratio to around 60 percent by 2020.

The current government is pushing for a law in parliament that would commit future governments to complete the scheme. This attempts to get around previous roadblocks that stalled Thaksin's plans after the change of government. Pheu Thai enjoys a majority in the 500-member House of Representatives with 265 seats to the opposition Democrats with 159 and other parties trailing.

The key is whether Pheu Thai has the muscle to push the plans through. Given its current parliamentary majority, it should be able to do so.

But there are wild cards, most importantly Thaksin's plan to return to the country, which seems to be on hold because it would likely bring virulent opposition protests back to the streets. He "advises" Yingluck remotely on his iPhone (she has her own ring tone on the phone) and is in constant touch with Thai political figures from his bolt-hole in Dubai. He has said he understands he may not be able to return any time soon (unless he is willing to go to prison) and is willing to stay abroad for the good of the country.

So far Yingluck has sailed on without serious trouble. Most political observers give her credit for astutely handling the pressures of governing. On the streets, the royalist Yellow Shirt People's Alliance for Democracy and other groups have mounted occasional rallies but they do not present a major threat.

"Among the political, economic and media classes, the awareness of the impending Asean single market is strong," according to the Asianomics report. "Many of them regard the event itself as being overhyped; tariffs have already been reduced over a wide range of products and free trade between the nations is more the norm than the exception.However, in Thailand at any rate, the rallying cry of the AEC [Asean Economic Community] - not to mention the opening of Myanmar - is seen as an opportunity to focus attention and spur government spending on improved infrastructure."

Obviously development of this magnitude in Thailand raises questions, as it would elsewhere in Southeast Asia. Not for nothing did previous governments describe the country's system as "buffet democracy," in which scores of politicians regard any development as a chance to sample graft from the table. With Baht 2.3 trillion in spending on the line, the opportunities for enrichment are liable to be enormously tempting.

Nonetheless, despite the caveat that anything can happen, formidable public policy plans are underway in Bangkok, and if works out, Thaksin and his sister may have found an energetic economic and foreign policy blueprint to put the country at the forefront of Asean.

It's nice to see Thailand with a proper government again.

The Thaksin backed govt certainly DOES think big. I am talking in global terms. It is smart to try to ride the back of the Chinese ascent to power.

Originally Posted by Necron99

Originally Posted by Mid

just one small question ,

where is the money ?

They are going to pay everyone off with 3 year old rice.

Which they will sell at a huge loss to the Taxpayer ,Could rice program bankrupt Thailand? - Newsroom - Ag Professional Now who wrote a couple of weeks ago about "the last straw" ?

I'm not gonna hold my breath.
I can only do it for 20 years.