PM unveils $90bn infrastructure plan

The government is planning a massive investment of US$90 billion (2.75 trillion baht) to develop infrastructure.

Published: 06/10/2012 at 12:00 AM
Writer: Post Reporters

The investment is to accommodate the launch of the Asean Economic Community (AEC) and economic expansion of the Greater Mekong Subregion (GMS).

The biggest investment in Thailand's history was announced by Prime Minister Yingluck Shinawatra in her opening address at the Thailand Investment Conference yesterday.

She said the GMS members are the key to connectivity and development in the Asean region.

The GMS comprises Yunnan and Guangxi provinces in China and the countries in the Mekong basin - Thailand, Cambodia, Laos, Myanmar and Vietnam. These five countries along with Yunnan and Guangxi cover 2.6 million square kilometres with a combined population of 326 million.

Ms Yingluck said GMS members have maintained steady economic cooperation and achieved considerable success in laying the foundations for economic cooperation.

During the fourth GMS summit held in Myanmar last December, leaders agreed that over the next two years they should cooperate to develop land transport to link trade and investment and to promote access to goods and services before the launch of the AEC in 2015.

The leaders also jointly announced a strategy for 2012-2022 to promote economic growth in the GMS region, which is a significant mechanism that will lead to closer cooperation in the third decade of the GMS grouping, Ms Yingluck said.

She stressed the need for connectivity in the region by creating supply chain and logistics systems.

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.

A government source said the investment would cover seven years, while the main financial sources would come from borrowing.

Thailand will continue its proactive role in supporting the development of the GMS, Ms Yingluck said.

She said that government leaders in the GMS countries have collaborated closely to promote and strengthen economic ties.

Ms Yingluck said construction of major infrastructure projects in the region is getting under way. They include the Dawei deep-sea port in Myanmar and a project to build a highway to connect Dawei with Laem Chabang deep-sea port on Thailand's Eastern Seaboard.

Thailand has also begun urgent work to develop water management projects.

Ms Yingluck said GMS countries have geographical advantages as they are located between the Indian and the Pacific oceans, which link India and China.

The link between the Indian and the Pacific oceans will have significant implications in that it will increase the volume of trade and investment, which will bring great wealth to GMS countries, she said.

Meanwhile, Finance Minister Kittiratt Na-Ranong has urged state enterprises to make use of infrastructure investment opportunities in neighbouring countries.

He said state enterprises should be proactive in seeking opportunities rather than waiting for invitations from governments, especially for projects that would link regional logistics and transport systems.

"Since we have great potential to be the centre of a regional logistics system, we should try to make it happen," Mr Kittiratt said.

For example, as Myanmar plans to develop a deep-sea port at Dawei, the Port Authority of Thailand should study the possibility of joining in the project's investment, assessing its commercial viability, he said.

"This is not a policy; it is just an idea. I want state enterprises to consider these opportunities on their own, and if they are [ready to invest overseas], then go for it," Mr Kittiratt said.

Italian-Thai Development has a contract for Dawei, and Mr Kittiratt said the government is considering entering into a venture with the company.

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Discussion 1 : 07/10/2012 at 01:10 PM: You can never underestimate the sheer ambition of the Shinawatras, especially if there is a business opportunity using other people's money, such a shame we are all so naturally cynical of any development plans of theirs. It's like the 2011 floods, what a fantastic opportunity that was to requisition vast amounts of loans to employ all the future voters in Isaan.
Discussion 2 : 06/10/2012 at 11:25 PM: 'PM unveils $90bn infrastructure plan.' Should read 'Thaksin unveils...' How can anyone believe YS is the brains behind this ? No doubt Thaksin will make (another corrupt )massive amount of money.
Discussion 3 : 06/10/2012 at 08:53 PM: Why so may dislikes for khun Bj? Truth hurts for some
Discussion 4 : 06/10/2012 at 06:27 PM: "Outstanding finally a leader with foresight." These plans have been in the making for many years. Yingluck has very little to do with it.
Discussion 5 : 06/10/2012 at 06:26 PM: Any government based on social/democratic principles would be investing in it's citizens, not just using them to get into power so as to get to the trough that this project will provide. Totally agree Wyle d.33, obscene stuff when the education system needs so much attention. And I just don't get how the few government apologists on this site keep putting their hands up to defend the indefensible. Interesting how one can do that to maintain a political position in contradiction of honesty and decency.
Discussion 6 : 06/10/2012 at 05:58 PM: Thailand is an alternative universe where corruption, deceit, and the general absence of planning in response to global issues is perfectly normal and acceptable. The fact that many of the international investment corporations are willing to pay bribes (as they do in the West)to increase their current profits in ways,which will bring no benefit to Thailand in the longer run,is likely to go completely unnoticed. It's very sad to see that Thailand seems about to be further colonised by the very international corporations who are destroying 'developed' countries.
Discussion 7 : 06/10/2012 at 05:11 PM: Outstanding finally a leader with foresight.
Discussion 8 : 06/10/2012 at 04:12 PM: ADB has been advising Asian countries to boost infrastructure spending to achieve sustainable growth. For Yingluck to recognize the importance and the need is a credit to her vision. Thailand will untapped tremendous economic potential from land-locked and infrastructure weak Indo-China countries and seamless AEC will mean more marketability of products. To spend now is right timing as we can expect global weakness for many more years. The spending will allow Thailand to achieve a decent GDP for good number of years and will improve its competitiveness. Connectivity in transportation, communication and energy sector will release growth and development and will generate jobs and revenues.
Discussion 9 : 06/10/2012 at 03:53 PM: Sounds like someone wants their illgotten gains and confiscated money back , with interest and wants it now , why else are they attempting to push through as many deals as they can , while they still can ? The Bro`master wants it all or if not , a finger in every pie , well done redshirts ? Somebody stop them before Thailand is indebted to china forever , which his own clan won`t ever have to worry about paying back this debt , but future Thais will inherit the lot of it !
Discussion 10 : 06/10/2012 at 02:22 PM: Ahhh, democracy! We don't know what the AEC really is, who's really behind it, nor have any debates or referendums been arranged to approve it. All we know is it's coming in 2015, unprecedented, astronomical sums of cash will be spent to "link it up," like it or not! Like the EU, and we see how wonderful that turned out!
Discussion 11 : 06/10/2012 at 01:31 PM: The government is so right to build infrastructure, actually I have been saying that for years. The question though is....what kind of infrastructure? When will the project finally go away from Bangkok and the surounding provinces? Whe will goverments finally start to use the northeast and it's huge workforce. Why supporting ricefarmers who try to make a living by growing rice on a few rais of land only? I have been waiting for decades for any government to build an infrastructer in the northeast to attract companies starting production there. Why do all the workers leave home to find work in and arround BKK? Give those people a chance to make a living, educate them well and no handouts or funn rice scheme will be needed. Take a look what the german government did after they had to deal with the bankrupt states inherited from the GDR. A highspeed train to Laos will not get Thailand any further.
Discussion 12 : 06/10/2012 at 01:16 PM: As someone who takes care of a 14 year old and have first hand knowledge of the Thai education system, I find this article obscene. Does anyone remember 1997?
Discussion 13 : 06/10/2012 at 12:56 PM: khunbjDis#24 , it actually beats living life upon your knees , you should try it sometime ?
Discussion 14 : 06/10/2012 at 12:32 PM: I think we can be sure that there will be massive vote-buying in the next elections because the return on investment will be immediate and huge. I can now understand better why PT so desperately wants to be in charge of the Bangkok Administration.
Discussion 15 : 06/10/2012 at 12:31 PM: anything for education?
Discussion 16 : 06/10/2012 at 12:30 PM: With what cash, she's already bankrupting the country.
Discussion 17 : 06/10/2012 at 12:09 PM: Why do you need aa highway to connect Dawei and Laem Chabang, it makes no sense. You would ship either to or from either port. Louis Vuitton, Apple and other Asian Chav Brands please get ready for and influx of orders
Discussion 18 : 06/10/2012 at 12:00 PM: 'the main financial sources would come from borrowing.' Who's going to lend that kind of money, China? Sounds dangerous to me with so many countries now in dept to the Chinese.
Discussion 19 : 06/10/2012 at 11:05 AM: Disc 24: khunbj How ridiculous – even more so as this seems to apply to you. Watch the likes and dislikes prove your sureness wrong. Your views on this and other money squandering schemes are those of a bigot – if followed through there wouldn’t be enough printing presses in the country to print the money needed. As the saying goes, Bigotry dwarfs the soul by shutting out the truth.
Discussion 20 : 06/10/2012 at 10:56 AM: More info needed. It has been about a year since they announced their 350 billion emergency flood project fund, but last report I saw said they hadn't even finalized which projects to do, much less put them out to bid. Now they announce another 2.75 trillion in spending, with only mention of 90 billion for the high speed train, the flood projects (already budgeted theoretically) and a highway project to connect an existing port to a planned port. All total, 3.1 trillion in planned expenditures, for which only 90 million has been specified. All total 3.1 trillion in loans for pockets unknown. So inquiring minds want to know ... break down of the 3.1 trillion in expenditures, project by project ... break down of loan sources or at least hope for loan sources (Thailand's international financial/corruption rep is not the best).
Discussion 21 : 06/10/2012 at 10:31 AM: I am fairly sure that a poll among BP commenters would reveal that a) they complained where they came from b) they complain where they are now c) they have no visions about anything d) and if somebody should dare to be happy then they will complain about that too whatalife (:
Discussion 22 : 06/10/2012 at 10:27 AM: D 18 Kasper, Well said and you hit the nail on the head!
Discussion 23 : 06/10/2012 at 10:11 AM: I notice that the sarcasm is mostly about Thailand (in general & for generations). I remember arriving in Thailand decades ago after extensive time to the South & noticing how much less corrupt it was here than in Indonesia. It was / is much friendlier than Malaysia, and easier for foreigners to adapt long-term than Cambodia or Vietnam (let alone Laos!) Infrastructure is a good idea, of course. Controlling corruption will be difficult without public support (demand!) which surveys tell us is absent. The employment aspect in good & 2015 is around the corner. To the "China-as-boogie-man" crowd: This is capitalism! Trade benefits both parties.
Discussion 24 : 06/10/2012 at 10:01 AM: Does anyone else get the impression that PT are 'filling their boots' and 'making hay while the sun shines' as quickly as possible? The rice scheme is a disaster, everyone knows that (even those stubbornly defending it on here). Common sense says it needs stopping or amending as soon as possible. But it's such a huge gravy train feeding so many crooks, PT are keeping it. I wonder if Thaksin has got to that destructive stage... "If I can't have Thailand, no-one can." Implementing policies as rash and financially dangerous as these in a period of global financial upheaval seems like suicide.
Discussion 25 : 06/10/2012 at 10:00 AM: There is about to be a shortage of luxury cars in Thailand.
Discussion 26 : 06/10/2012 at 09:58 AM: @pjt d13. The price has not gone up. Khun Kittirat just did not mention the appx. 35% bribes when he first announced the 2 trillion. Now that polls have shown that the voters do not mind the PTP taking bribes, PTP has decided to make if official and public. I think we should at least commend them for that!
Discussion 27 : 06/10/2012 at 09:52 AM: If you were a shareholder in a company, which those of you who pay taxes in Thailand are, and the director informed you that she (Ms. Yingluck) intended to borrow alot of money to expand the company, but at the same time told you that she and some of her close co-workers would put 30% of the borrowed money in their pockets, would you then vote for the project or would you fire the director?
Discussion 28 : 06/10/2012 at 09:52 AM: Discussion 5: Yes, this is probably the main reason for the investment. But what will be missing from the infrastructure development is the most important element of it all, namely spending on the education of the people - spiritual, moral, knowledge, skills, etc. Material and spiritual development are like the wings of a bird. Unless both are equally strong, the bird of the Thai nation will struggle to fly. Politicians only understand material development. No wonder Thailand's growth and development is like the performance and behaviour of an old car.
Discussion 29 : 06/10/2012 at 09:47 AM: @khunbj, d4. In principle I agree with you, but do not forget that the PTP government, with their voters accept, will ensure that a large percentage of the budget ends in their pockets and not in infrastructure pojects, and it will therefore not be beneficial to anyone but the PTP. I believe even you will not deny this? And no, it makes no difference that previous governments may or may not have done the same.
Discussion 30 : 06/10/2012 at 09:42 AM: The biggest heist in Thai history LOL
Discussion 31 : 06/10/2012 at 09:40 AM: Will Yingluck ensure the bidding process for these giant project be made public as they are in first world countries, or will they remain secret so the right officials can skim 30 billion dollars in bribes?
Discussion 32 : 06/10/2012 at 09:32 AM: Is this the same TB 2 bn that Khun Kittiratt was touting a couple of months ago? Why has the price gone up? Maybe they included the flood spend etc for effect. It would be a service from BP to try to get a breakdown of what key projects will receive this funding - or at least a split between area (say rail, roads, ports, etc) BTW It looks like Thailand is trying to develop GMS as a counter balance to the weight of Indonesia/Singapore/Malaysia in ASEAN
Discussion 33 : 06/10/2012 at 09:29 AM: Khunbj: you never fail to get the promotion in. How can the returns on this investment be so immediate so as to allow for even the interest repayments on such borrowing to be made in the short term ? Let's just say that foreign investment will flood in due to improved infrastructure, this is not going to happen overnight, so how are repayments made in the meantime ? .....oh sorry, I forgot, the rice pledging scheme will eventually profit and we can use that to pay for it all.
Discussion 34 : 06/10/2012 at 08:49 AM: And yet people are refusing to cash Thai Cheques in the USA ? Time for a big change in Thailand !
Discussion 35 : 06/10/2012 at 08:37 AM: We shouldn't just say B2.75T. We should spell it out in full. It's B2,750,000,000,000 - what a scary thought !
Discussion 36 : 06/10/2012 at 08:31 AM: Quote The government is planning a massive investment of US$90 billion (2.75 trillion baht) to develop infrastructure. A government source said the investment would cover seven years, while the main financial sources would come from borrowing. How much would the interest rate be and how can they ever pay it back? If the DO build a high speed rail link it needs to be a completely new track from the bedrock up and it needs proper outside of Thailand very tight control of funds and building. At the current rate of corruption you can estimate perhaps only US60 billion will go towards the projects before more gets creamed off on the way down the line.
Discussion 37 : 06/10/2012 at 07:54 AM: On the accepted basis that 40% of government contracts disappear in graft, this must be a procurement windfall making those in power a collective Baht 40.5 billion unearned fortune. A very sad thought
Discussion 38 : 06/10/2012 at 07:38 AM: The most important is to keep the Chinese under control because they will see this primarily as a possibility to sell their stuff which is often just substandard. The second is I wonder how many billions will evaporate and settle in wrong pockets.
Discussion 39 : 06/10/2012 at 07:24 AM: I bet the line is already a kilometer long of people waiting to get a slice of that pie. And I am sure the exotic car dealers are drooling.
Discussion 40 : 06/10/2012 at 07:06 AM: How much is 30% of 2.75 trillion baht?????
Discussion 41 : 06/10/2012 at 06:48 AM: Anything that makes goods and people move easier from A to B will benefit the country bringing in further business investment and jobs during and after the project is done ... improving the infrastructure during this plan and adding the project for a general update and expansion of the rail network will make Thailand an even more appealing destination for investment in Asia both for ASEAN investors and other foreign investors and thus be hugely beneficial for Thailand and it's people.
Discussion 42 : 06/10/2012 at 06:24 AM: "A government source said the investment would cover seven years, while the main financial sources would come from borrowing". With such a record of corruption and mismanagement a lender might be hard to find. One thing she seems to forget is that the money has to be paid back, and with a rocketing deficit and rising public debt, default is quite likely on the cards.
Discussion 43 : 06/10/2012 at 06:12 AM: I'm sure this will help Thailand to supply a very cheap, uneducated, illiterate, unskilled labour force to the much better-educated, English-speaking peoples of other AEC countries.
Discussion 44 : 06/10/2012 at 05:44 AM: 2.75 trillion baht, in 7 years, is 393 billion baht/year. As a comparison, the previous Dem government spent 1.4 trillion baht for the three-year Thai Khem Khaeng initiative. That's 467 billion baht/year.

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