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BURNING ISSUE
Amending PPP law won't really unleash private investment
SASITHORN ONGDEE

BANGKOK: -- THERE IS not much hope that the easing of the new public-private partnership law will immediately beef up private investments in state undertakings.

At the Cabinet meeting on Tuesday, the Private Investment in State Undertakings Act BE 2556 (2013), known as the PPP law, was amended to ease the bottleneck in the government's approval process so that joint public-private investments could see quicker flow.

The amended PPP law, which will be passed as a ministerial regulation, not as an act through the National Legislation Assembly, will mean PPP projects worth less than Bt5 billion in value do not have to be submitted to the PPP Policy Committee, chaired by the prime minister, for consideration. The figure is up from Bt1 billion currently.

But, it's not that easy for PPP projects, even those less than Bt5 billion in value, because there are still a lot of trivial ministerial regulations.

Projects with investment value of between Bt1 billion to Bt5 billion will be under consideration of a PPP subcommittee chaired by the permanent secretary to the Finance Ministry, to decide whether or not they should seek approval from the PPP Policy Committee.

Projects valued at less than Bt1 billion can be open to private participation, depending upon the Finance Ministry's rules and regulations on investments.

Many businesspersons would dislike this sort of law, even with the amended regulations, as they feel it is not enough to encourage their participation in the state's projects. This is because there are just a few projects that are valued at Bt5 billion.

However, the first PPP law, which was enacted in 1992, was designed as a guideline for public-private participation and investments to clarify the approval process, which comes with details on types of investments and funding, strategic plan, feasibility study method and relevant people.

The law's intention is to prevent corruption in granting rights or concessions to the private sector to operate or use state properties, especially in the public interest, rather than ensure ease of doing business.

The new PPP law, amended in 2013, was designed to streamline the approval process, aimed at shortening the time frame from the current almost 24 months to 7-12 months.

The government realises that private-sector investment is crucial to the country's economic growth, as it currently accounts for 27 per cent of gross domestic product.

According to the Prayut administration's previous announcement, the government is planning 66 projects under PPP worth Bt1.57 trillion under the country's infrastructure strategic development plan (2015-2020).

Although we had good news yesterday on the PPP projects, with Deputy Prime Minister Somkid Jatusripitak announcing that he would submit five projects worth Bt200 billion in value in the last quarter of this year. The approval process should take up to 12 months.

This means that we will see some of the approved projects commencing construction by the end of next year or in 2017 at the earliest.

According to the committee, three out of five projects are related to railways and the rest are waste-to-energy power plants. Of course, the waste-to-energy power plants would need minimal investments of around Bt6 billion in total. This is just a good start. If good governance is set as the top priority, "slow but sure" must be better in the public interest in the long run.

Source: http://www.nationmultimedia.com/politics/Amending-PPP-law-wont-really-unleash-private-inves-30269520.html


-- The Nation 2015-09-25

[Eric Loh]

Whichever way the projects will be financed, there will be corruption. Project rules and condition especially the internal and external auditing must need to be strengthened to reduce corruption.

[trogers]

No proper private business would venture with a State that subjects prices of the business to social and political pressures.

Thus, should such a venture be formed, suspicion would automatically be raised on intents...

[Srikcir]

"some of the approved projects commencing construction by the end of next year or in 2017 at the earliest."

That works out nicely for Prayut as he will remain in office into 2017. Such a coincidence.