Legal doubt over Thai govt's bt2-tln lending bill

[webfact]

Legal doubt over bt2-tln lending bill
The Nation

Giant loan bill for transport projects also violates the charter, Kanit says

BANGKOK: -- The government's Bt2-trillion borrowing bill for infrastructure and transport projects may face a fate similar to the Bt350-billion water management scheme - as a law reform panel said yesterday the bill may contravene the charter.

The Law Reform Commission of Thailand (LRCT), headed by former attorney general Kanit Na-Nakhon, said the Bt2-trillion bill was likely to violate Article 169 of the Constitution.

It follows a ruling last week by the Central Administrative Court, ordered a halt to the Bt350-billion water scheme, saying the government must conduct environmental impact assessments (EIAs) and Health Equity Impact Assessments (HEIAs) before signing deals with construction companies.

The Law Reform Commission was set up by the Abhisit government. Kanit told a press conference yesterday it reviewed the Bt2-trillion borrowing bill, gathered opinions from all sectors and made recommendations to Prime Minister Yingluck Shinawatra on Tuesday.

Kanit said the commission found that the bill would violate Article 169 of the charter because the government was permitted to pay state funds under the authority of only four laws - and none of them was appropriate for loans totalling Bt2-trillion.

Article 169 says in part "the payment of State funds shall be made only when it has been authorised by the law on appropriations, the law on budgetary procedure, the law on transfer of appropriations or the law on treasury balance, except that it may be prepaid in the case of urgent necessity under the rules and procedures provided by the law".

The bill, approved by the House in its first reading, seeks to enable the Finance Ministry to borrow Bt2 trillion off-budget for spending on transport infrastructure projects.

Kanit said since the borrowing would be under the responsibility of the Finance Ministry, the loans would be regarded as state funds and spending the loans would have to comply with the Constitution.

"As a result, enacting a bill by using other ways apart from what is established by the charter, could be unconstitutional." He said a bill's enactment must also be based on the principle of appropriateness and must not restrict public participation and the people's rights.

Kanit said the bill would deprive the legislative branch of power to check the spending of the executive branch for up to seven years. The loans would also be legally binding on future governments and would deprive them of their rights to reject projects or propose new ones - because all projects would have been determined already by the current government.

He also voiced concern that projects listed in the annex of the bill had been subject to feasibility studies. If they were later delayed or aborted, they could be worthless as investments, and cause a national financial crisis.

Kanit said the government could opt for legal investment methods, such as allowing private firms to jointly invest in the transport projects.

Despite this, the government plans to go ahead with the bill's enactment and proceed with the projects, according to Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong.

Kittiratt said Yingluck told the council of economic ministers that all state agencies concerned must get ready to start the projects once the bill clears Parliament.

Kittiratt said vetting of the bill by a special House committee had progressed and any funds trimmed from the proposed projects would be used for promotion and development of the country.

The government would set aside one per cent of loans, or about Bt20 billion, for development purposes, Kittiratt said.

Transport Minister Chadchart Sittipunt said the prime minister instructed government agencies to ensure transparency in the projects.

Chadchart said the Transport Ministry would invite the private sector to observe the bidding.

He said Yingluck also suggested there should be "added value" in the projects. For example, there should be projects like new cities or economic zones along high-speed railway lines.

"We have no worry that the projects may face lawsuits [like the] water management scheme because all of the transport projects will be implemented in line with the rules and with prudence," Chadchart said.

Speaking before leaving to visit Poland and Turkey, Yingluck said she had assigned Deputy Prime Minister Phongthep Thepkanchana to hold meetings with state agencies concerned to study what should be done next following the Administrative Court's ruling.


-- The Nation 2013-07-04

[Thai at Heart]

Oooops.

Now how to get round this issue.

[notmyself]

Damn that girl can shop.

[MaxLee]

Oooops.

Now how to get round this issue.

Thaksin thinks, Pheu Thai is doing

And I'm sure he'll find a sneaking way to redirect the under the table profit...

It just takes a little longer, Mai pen rai....

[Tatsujin]

And another one bites the dust, another one bites the dust . . . and another one . . . etc

[Orac]

Oooops.

Now how to get round this issue.

Looks simple enough to me - Kannit has even suggested it himself:

Kanit said the government could opt for legal investment methods, such as allowing private firms to jointly invest in the transport projects.

So all they need is some 'private' company to bid for the project who can then borrow the money to invest based on said contract (I am sure one of the government owned banks can assist in this) and then charge a fee for 50 years to the government.

Been going on in the UK for ages with the Public Private Partnerships and some companies are making a fortune out of it.

[rametindallas]

Wow! Add one more change to the list of changes to the Thai Constitution to benefit the top-tier criminal class.

[bigbamboo]

Well that's the end of that then.

Article 169 must go.

[jbrain]

Kittiratt said Yingluck told the council of economic ministers that all state agencies concerned must get ready to start the projects once the bill clears Parliament

Now let's watch how hard it will get pushed to have the bill approved before the

Thaksin thinks, Phue Thai stinks

[Neilly]

Oooops.

Now how to get round this issue.

Thaksin thinks, Pheu Thai is doing

And I'm sure he'll find a sneaking way to redirect the under the table profit...

It just takes a little longer, Mai pen rai....

Sounds like they've already got that covered

He said Yingluck also suggested there should be "added value" in the projects.

[waza]

"Kittiratt said vetting of the bill by a special House committee had progressed and any funds trimmed from the proposed projects would be used for promotion and development of the country. The government would set aside one per cent of loans, or about Bt20 billion, for development purposes, Kittiratt said."

My guess is if they ever get this dog to hunt, there will be plenty of trimming and development happening.

[winstonc]

the staggering thought is,,how much are they guna steal,,,its frightening,,,,,,phew,,,,,,

[Thai at Heart]

Oooops.

Now how to get round this issue.

Looks simple enough to me - Kannit has even suggested it himself:

Kanit said the government could opt for legal investment methods, such as allowing private firms to jointly invest in the transport projects.

So all they need is some 'private' company to bid for the project who can then borrow the money to invest based on said contract (I am sure one of the government owned banks can assist in this) and then charge a fee for 50 years to the government.

Been going on in the UK for ages with the Public Private Partnerships and some companies are making a fortune out of it.

Do you know how long Amata has been waiting for the EIA to extend their industrial estate?

Some of it since December 2011. Not that i don't approve of EIA's but it doesn't half push investment projects way off into the distance.

[MoonShadow]

Another poor headline.....the Goverment is not Lending its seeking to Borrow.......so its a debt!!

[BlackJack]

I made investments in infrastructure as I thought all these projects would push the stock prices higher

I bailed a few weeks back when I realised it was all smoke and mirrors

when they actually pen and sign something I may get back in to these stocks