Thai govt advised to cut Bt2-tn loan

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POLITICS
Govt advised to cut Bt2-tn loan
The Nation


Transport Minister Chadchart Sittipunt, left, and Prapat Chongsanguan, governor of the State Railway of Thailand, listen closely as the House deliberates the Bt2-trillion borrowing bill yesterday.

If amount cut to Bt400 bn, money will not have to be sought outside: Korn

BANGKOK: -- Former finance minister Korn Chatikavanij advised the government to reduce its plan to borrow Bt2 trillion to Bt400 billion so it would not need funds from sources outside the state financial system.

Korn, who is also deputy leader of the opposition Democrat Party, said the focus should initially be on projects that have undergone feasibility studies and are ready for public hearings and environmental-impact assessments. These projects would only require about Bt400 billion, he said, citing information from state agencies reporting to the House of Representatives' vetting committee on the bill.

He was speaking at yesterday's House debate on a bill empowering the Finance Ministry to borrow Bt2 trillion for the government's transport infrastructure projects.

"My question to the committee chairman is whether the government will be able to go ahead with the projects outlined in the bill if there were no borrowing law. If you can't answer this question, then I would like to exercise my right as a minority committee member to answer on your behalf. I have a clear plan that allows all the projects to go ahead without this law," Korn said.

He added that the remaining Bt1.6 trillion required for the projects could be obtained through normal financial channels for the next seven fiscal years, in accordance with a project plan disclosed by Transport Minister Chadchart Sittipunt.

"The government will have no need to borrow outside the fiscal system for the projects then," Korn added.

Finance Minister Kittiratt Na-Ranong, however, cited the need for continuity of the projects, saying the government did not wish to evade scrutiny as alleged by opposition MPs. He added that previous governments had also issued similar laws that allowed spending outside the fiscal system.

Kittiratt, who is also a deputy prime minister, said many projects approved by the government were awaiting funds so the construction could go ahead. In response to the opposition's concern that the projects could be marred by irregularities, he called on opposition politicians to help scrutinise those projects to prevent graft.

Bank of Thailand Governor Prasarn Trairatvorakul, meanwhile, said market liquidity should be sufficient to cover the seven-year investment of the Bt2-trillion infrastructure projects at about Bt300 billion a year.

Prime Minister Yingluck Shinawatra said the government was aiming to "invest for the future" with the help of this borrowing law. She said representatives from the Thai Bankers Association who met with her on Wednesday night also wanted to see more investments in infrastructure, as these investments would boost the country's revenue.

The PM compared the Bt2-trillion borrowing plan to a bank loan required to refurbish a house.

"We need to renovate the entire house, including its structure. The structure must be able to support the extension."

She added that the government was trying to limit its public debt to no more than 50 per cent of gross domestic product.

Yingluck has called a meeting of relevant state agencies today to discuss a planned "roadshow" for the Bt2-trillion transport infrastructure projects, Government Spokesman Teerat Ratanasevi said. The roadshow is scheduled to begin at Government House next Thursday, before it heads to the provinces early next month.

Interior Minister Charupong Ruangsuwan said yesterday that Bt2 trillion in loans was needed to improve Thailand's competitiveness ahead of the ASEAN Economic Community, which kicks off in 2015.

-- The Nation 2013-09-20

[lee b]

well thats a hell of a drop down ! BT 2Trill - BT 400Bill

[lujanit]

well thats a hell of a drop down ! BT 2Trill - BT 400Bill

That's what happens when you remove the 'extra' payments 'necessary' to get these projects off the ground.

[jaidam]

400 billion is enough to keep buying, storing, accounting for, and destroying a few months more of the rice in the pledging scam. It will not build an infrastructure for Yinglucks children and grandchildren to be proud of.

[notmyself]

I took every penny I had with me when I popped over to the UK end of June and put it all into gold. Now I can get <> 50 Baht to the GBP from 43 and gold jumped 4% yesterday.. or was it the day before. I love you Thailand but I'm not going down with you.

If they can use ALL 400 million it would be close to the 2.2T anyway IMO.

[bigbamboo]

Thailand's problem in a nutshell. It does have capable people like the internationally respected Korn but unfortunately we are saddled with Kittirat.

[monkey4u]

400 billion is enough to keep buying, storing, accounting for, and destroying a few months more of the rice in the pledging scam. It will not build an infrastructure for Yinglucks children and grandchildren to be proud of.

Neither will 2 tn but it will give them some lovely homes around the world

[slapout]

One request is for 2 trillion, then we see the new number being bandied around is 2,2 tillion. Are we being subject ed to a fudge factor of 10%, for each time there are questions from the opposition, etc?

The bonds that the government attempted to sell to investors were withdrawn from the market due to not acceptable offers, rice is being beggared at market price, government income is below forecast, etc. Its a good thing the cabinet can/has increased the sin tax to make up the shortfalls.

The tourists, and those of us who live here using foreign funds are subjected to a bank ATM charge to ensure bank profits stay in the black, in spite of the bad loans made to cronies.

The politicians have picked the locals down to the bone, so to finance their lavish life style,they have targeted the tourist sector which have been the savior of Thailand for several years. Wonder what the plan c for funding will be?

[Baerboxer]

I took every penny I had with me when I popped over to the UK end of June and put it all into gold. Now I can get <> 50 Baht to the GBP from 43 and gold jumped 4% yesterday.. or was it the day before. I love you Thailand but I'm not going down with you.

If they can use ALL 400 million it would be close to the 2.2T anyway IMO.

How much did the gold price fall between when you bought it and today's price?

The baht is heading for a fall though so get ready with your pounds.

[Baerboxer]

400 billion is enough to keep buying, storing, accounting for, and destroying a few months more of the rice in the pledging scam. It will not build an infrastructure for Yinglucks children and grandchildren to be proud of.

Do you really think the 2.2 trillion would be used to build an infrastructure that anyone's grandchildren could be proud of?

[dcutman]

She added that the government was trying to limit its public debt to no more than 50 per cent of gross domestic product.

So buy borrowing money and adding at least bt4 trillion in interest over 50 years and keeping it off the national budget balance sheet is a fiscally responsible plan? Is this gonna be a 50year fixed rate mortgage or an adjustable rate mortgage?

[notmyself]

I took every penny I had with me when I popped over to the UK end of June and put it all into gold. Now I can get <> 50 Baht to the GBP from 43 and gold jumped 4% yesterday.. or was it the day before. I love you Thailand but I'm not going down with you.

If they can use ALL 400 million it would be close to the 2.2T anyway IMO.

How much did the gold price fall between when you bought it and today's price?

End of June so no loss but imagine I had kept Baht!

The baht is heading for a fall though so get ready with your pounds.

You think it's going to fall? I can see it going to 53 but that's it unless there is a coup or some such.

[monkeycountry]

Mr. Korn seems to not understand the infrastructure project and the 2.2 billion baht loan bill at all.

2.2 trillion x 30% = 660 billion to the PTP government and their friends.

400 billion x 30% = 120 billion to the PTP government and their friends.

660 billion > 120 billion, hence the PTP MPs will obviously vote for the 660 billion - so would I!

The same goes for the bank managers who support the bill. The PTP government is going to borrow the money from these banks, which means a serious boost to the profit of these banks as well as their share price on the SET. Further the bank managers may get a raise/bonus and get promoted. There is zero downside for these bank managers, so why would they say no???

Not to mention that some of the banks have the government as their main shareholder, so even if they for some mysterious reason disagreed with the loan bill, they will probably still officially support the loan bill as their boss (the shareholders) will want them to

Edited September 20, 2013 by monkeycountry

[GentlemanJim]

400 billion is enough to keep buying, storing, accounting for, and destroying a few months more of the rice in the pledging scam. It will not build an infrastructure for Yinglucks children and grandchildren to be proud of.

Do you really think the 2.2 trillion would be used to build an infrastructure that anyone's grandchildren could be proud of?

The only thing it will build for the Grandchildren will be a debt that they will spend all their working lives paying for! Cool economics..................NOT!

[timewilltell]

A disaster on the making. Thailand should stop any new projects until they have tackled corruption - they would e better off.

[RubbaJohnny]

A disaster on the making. Thailand should stop any new projects until they have tackled corruption - they would e better off.

Indeed but we cannot wait that long.