Mega Projects Get Cabinet Airing

[george]

Mega projects get cabinet airing

PHAYAO: -- One of the main cornerstones of the government's manifesto was given a public airing today, when the cabinet was given the details of the government's Bt1.7 trillion infrastructure development plans.

The cabinet's official acknowledgement of the 'mega projects', each one costing upwards of Bt1 billion, will mean that the agencies responsible for them will now be able to forge ahead with implementing the various schemes.

These comprise seven railway projects, worth Bt423.4 billion, other transport projects worth Bt328.6 billion, housing projects worth Bt213.8 billion, water management projects worth Bt200 billion, education development projects worth Bt96.4 billion, public health projects worth Bt96.3 billion, and other projects worth Bt324 billion.

The funding for these projects will extend over the next five years, with 39 percent drawn from the national budget, 13 percent from state enterprise revenue, 42 percent from foreign and domestic borrowing, and 6 percent from other sources.

The government hopes that the projects will help stimulate the Thai economy, while the ratio of public debt to gross domestic product (GDP) will gradually drop below 50 percent over the course of the development work.

While acknowledging that the projects could lead to a short-term current account deficit, of 1.1-1.2 percent, the government expects that in the long term the projects will help reverse this situation, particularly by reducing the need for expensive fuel imports.

In the first instance, the government will allocate Bt94.6 billion next year for the projects, of which Bt11.84 billion will go on transport, Bt12.5 billion on communications, Bt6 billion on housing, Bt38.12 billion on water resources, Bt13.52 billion on education, Bt12 billion on public health and Bt596 million on other areas.

According to Mr. Suparut Kawatkul, the Permanent Secretary for Finance, the Ministry of Finance will determine the suitability of funding sources, and will hope to attract foreign investment in the regional debenture market through the Asia Bond Scheme.

The infrastructure development plans will now be handed over to the government's mega project scrutiny committee, which will push to ensure that all the plans are met.

On 21 June, the cabinet will consider the proposals for the second time before they are put to the parliament for deliberation.

--TNA 2005-06-14

[george]

Update:

PM insists on transparency of mega projects

BANGKOK: -- Transparency is vital for the success of the government’s large-scale infrastructure development projects, Prime Minister Thaksin Shinawatra said today.

The prime minister, whose government has become embroiled in a scandal surrounding the procurement of bomb detection equipment for Bangkok’s new international airport, the Suvarnabhumi Airport, said that all the bidding for the ‘mega projects’ would be conducted by electronic auctions to cut out opportunities for corruption.

Yesterday the cabinet gave its initial seal of approval to mega projects worth a total of Bt1.7 trillion.

The projects include major road, rail and housing schemes.

Mr. Thaksin reiterated today that if the projects contributed to the nation’s current account deficit, the contribution would be minimal, as Thailand’s foreign reserves remain high.

However, he noted that the Bt1.7 trillion figure did not take barter trade into account, and that if barter trade was included, the final figure would change.

--TNA 2005-06-15