Move to restructure debts of four state agencies totalling Bt700 billion

[webfact]

PUBLIC DEBT RESTRUCTURE
Move to restructure debts of four state agencies totalling Bt700 billion
The Nation

BANGKOK: -- The Public Debt Management Office (PDMO) will soon propose a legal draft for restructuring of the debts of four state agencies, totalling Bt700 billion, through lower borrowing costs and more efficient management.

Of four state agencies, three the State Railway of Thailand (SRT), Bangkok Mass Transit Authority (BMTA), and Bank for Agriculture and Agricultural Cooperatives (BAAC), all of which made borrowings following the state policy. The other is Social Security Office (SSO), which the government has seen its accrued contribution to social insurance for more than Bt60 billion.

The four agencies are the State Railway of Thailand (SRT), Bangkok Mass Transit Authority (BMTA), the Bank for Agriculture and Agricultural Cooperatives and the Social Security Office.

Theeraj Athanavanich, deputy director-general of the PDMO and its spokesman, said the legal draft, which will authorise the Finance Ministry to borrow Bt700 billion for the debt restructuring, would be forwarded to Deputy Prime Minister MR Pridiyathorn Devakula and Finance Minister Sommai Phasee for review at the policy level late this month.

After that, a bill will be submitted to the Cabinet, and then the National Legislative Assembly.

According to the proposal, a committee will be set up to examine certain damages and the debt burdens of each state agency and the planned borrowings for the debt restructuring.

Theeraj said that if the proposal is approved, the four state agencies' debt burden would be written off, allowing more flexibility in state-policy implementation and annual budget management.

This could free up more money for investment, or at least within five years from now, the government is likely to set aside more budget to invest in infrastructure projects.

"We will make borrowings to repay the debts of each agency's projects. Then a budget will be set aside for later repayment. We may opt for either short-term borrowings or bond issuance," he said.

The planned borrowings would have a repayment period of no more than 20 years.

Conditions will be set for the SRT and BMTA by the State Enterprise Policy Office for no further debt burdens and better organisational management with certain rehabilitation plans, he said.

At the end of March, outstanding public debts totalled Bt5.73 trillion or 43.33 per cent of gross domestic product.

The public debt edged up Bt10 billion from the previous month, broken down as a Bt24-billion increase in general government borrowing, a Bt9.2-billion decrease in debts of state non-financial institutions, a Bt3.3-billion drop in state-run financial institutions' debt, and a Bt1.2-billion drop in state agencies' debts.

Theeraj said the ratio of public debt to GDP declined after the National Economic and Social Development Board revised its calculations for gross domestic product, providing more room for borrowings.

In regard to the borrowings for the Bt40-billion investment in water systems and road repair, he said Krungthai Bank had won a bid for a Bt3-billion two-year loan for such projects, which would be sufficient for the first phase.

The interest rate is 2.27 per cent per annum. The disbursement will be complete before the end of next month.

He said the agencies related to this investment had planned 2,248 procurement projects totalling Bt31 billion.

About 80-90 per cent of the Bt40-billion budget is expected to be disbursed within one year from now.

Source: http://www.nationmultimedia.com/business/Move-to-restructure-debts-of-four-state-agencies-t-30260483.html


-- The Nation 2015-05-20

[maidee]

state agencies are like average thai people

never save a baht when everything goes ok

spend spend

and then

lend lend

[trogers]

BAAC, a bank, has incurred high debts and needs restructuring? I wonder why...

[FangFerang]

700 billion seems to be the number bandied about in the Rice Crisis...any criminal proceedings or accusations about this debt abyss?

Well, no.

It's not negligence if you don't get accused.

[smedly]

700 billion seems to be the number bandied about in the Rice Crisis...any criminal proceedings or accusations about this debt abyss?

Well, no.

It's not negligence if you don't get accused.

wow so in this instance you have decided against blaming the current government, you are really confused aren't you

[Srikcir]

The Junta does like to spend the national treasury while increasing the cost of government. When a government has no check and balance, no accountability for its fiscal actions, the nation's taxpayers pay dearly. If and when an elected government is allowed, it will be so burdened with new debt that there won't be any issues of populist spending - there'll be no money.