Hopes over megaproject dampened

Investment in the 2-trillion-baht infrastructure projects is unlikely to start in the present fiscal year ending Sept 30, says caretaker Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong.

Even if the Feb 2 election is held as scheduled and a new government can be formed, the time-consuming process of approving and setting aside a budget will delay the investment, he said.

Moreover, the borrowing bill is pending in the Constitution Court after the Democrat Party asked for a ruling on its constitutionality.

The infrastructure investment, initiated by the Pheu Thai Party-led administration, was previously expected to start by this fiscal year and be the main driver in revitalising the lacklustre economy.

Given potential delays to the investment, 5 billion baht of public debt estimated for this fiscal year will be shaved off, Mr Kittiratt said.

He said the US dollar's strength has hardly had any effect on public debt, as the yen, which is the major foreign currency of Thailand's debt, has weakened against the baht to offset the dollar's appreciation.

The new government may need to set aside an extra budget in fiscal 2014 or borrow from financial institutions to finance investment in priority projects if the borrowing bill is derailed, said Chanvit Amatamatucharti, deputy secretary-general of the National Economic and Social Development Board.

The infrastructure projects could still move ahead as planned through those means even if the borrowing bill aborts.

Amid uncertainty about a global economic recovery and the fragile state of domestic consumption, any new governing political party will likely depend on the 2 trillion baht in infrastructure spending to jump-start the economy.

Time-consuming legal proceedings could delay the borrowing bill for years, as a Constitution Court ruling is not expected until the second half of this year.

The Finance Ministry earlier said it plans to borrow using the Public Debt Management Act to start investment in the infrastructure projects if the borrowing bill is struck down.

Based on government expenditure of 2.525 trillion baht set for fiscal 2014, a new government could seek up to 252.5 billion in borrowing.

Mr Chanvit said each project in the infrastructure plan must obtain cabinet approval and undergo an environmental impact assessment, with or without the borrowing bill.

Share your thoughts

Discussion 1 : 05/01/2014 at 09:11 PM
An opportunity for china to sell their outdated high speed train at high price, Thailand will become a junkyard for china old things. Thailand need to repaved all the roads its very bad now, the entire train network need major overhaul including new shorter route to major centres around the country. A good 200kmh train is good enough for all the population, high speed train is a luxury for advanced economies like Japan and Korea.
Discussion 2 : 05/01/2014 at 06:59 PM
2 TRILLION baht is decades worth of borrowing. No single administration should wield that much power. And that applies to either party -- particularly when it will end up in pockets of politicians and their family businesses.
Discussion 3 : 04/01/2014 at 10:01 PM
55. Democrat Party does not want to miss out on the large project
Discussion 4 : 04/01/2014 at 07:17 PM
This large project might be the real reason behind the protests and push for government change. The Democrat Party does not want so much money to go to the "wrong" cronies.
Discussion 5 : 04/01/2014 at 12:38 PM
1) There is only one way to boost the economy: reduce the degree of corruption. It will be super-efficient, mega-powerful and lightning-fast. 2) Right now Thailand does not need a mega-trillion, gazillion, insani-trillion baht budget for 'infrastructure measures', but it urgently needs to repair it's railroad tracks. 3) Everything that limits access of a totally corrupt, criminal, incompetent and unaccountable government to public funds, is good.
Discussion 6 : 04/01/2014 at 11:26 AM
What are you smoking the baht will take a bath this year it is getting weaker every day Your losing billions in outside investment people are runing from in Thailand your track record for ability to repay is also flawed.
Discussion 7 : 04/01/2014 at 10:48 AM
Fast train to nowhere. Who will ride it and who can afford it. They can barely run the trains they have. Can no one see this is nothing more than a scam. The water projects another stupid idea. Where do they find these pipe dreams ? The money would be better spent on building the worlds largest prison. Totally disband the police force and have them retrained by an outside country the United States or Canada. Take every last corrupt person the common Thai ,Hi-so or foreigner that breaks the law give them a stiff fine or time in prison. Then maybe Thailand might improve. But no that will never happen.
Discussion 8 : 04/01/2014 at 09:58 AM
No honest government would undertake a project of this magnitude without outside auditors being brought in to assure there is no corruption. All 4 of the "Big 4" accounting firms have offices in Bangkok.
Discussion 9 : 04/01/2014 at 09:03 AM
It's all about getting their dirty fingers on the money,no matter what. Sickening!
Discussion 10 : 04/01/2014 at 07:29 AM
Democrats destroying progress. What they are all about!
Discussion 11 : 04/01/2014 at 07:18 AM
"must undergo an environmental impact assessment" sounds nice when Mr. Chanvit says it. But will the outcome of the assessment be considered?

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