(Source: By Wichit Chantanusornsiri, Bangkok Post, Thailand (MCT) - State agencies are urged to be decisive and accelerate spending of 2 trillion baht earmarked for infrastructure projects, said Finance Minister Kittiratt Na-Ranong.
“Delays in public investment have not been due to the low capacity of construction but mainly because state officials don’t dare to decide on big investment projects even though they are good for supporting the country’s economy,” he said.
Mr Kittiratt pointed to Suvarnabhumi airport, which the government took more than 40 years to complete.
“It took only three years to finish the project once the decision was made,” he said.
“Before, when we thought of investing in capital-intensive projects such as the dual-track project, we simply put it in the pipeline but did not set a budget to make it happen.”
Hence, a new infrastructure bill has been drafted that would allow the government to borrow 1.6 to 2 trillion baht to invest in infrastructure projects over the next seven years.
The draft will go through Parliament within the next seven months, enabling the government to borrow outside the fiscal budget.
The current budget is now set at a deficit of 400 billion baht, but the government plans to reduce the deficit gradually over three or four years until it is balanced.
Most projects under the new draft are mass transport and telecommunication projects.
Among the major ones is a 45-billion-baht motorway from Nonthaburi’s Bang Yai district to Kanchanaburi, a distance of 96 kilometres.
Another project is a 70-km motorway from Kanchanaburi town to Ban Phu Nam Ron, worth 20 billion baht. The project will link Dawei deep-sea port in Myanmar with Laem Chabang deep-sea port in Thailand.
Other projects are the dual-track rail line from Nakhon Ratchasima to Chachoengsao and the Laem Chabang port expansion project.
The plans aim to lower high logistic costs, a weakness of Thai businesses.
The government plans to finance the projects through loans and joint ventures with the private sector through the Asean Infrastructure Fund.
Mr Kittiratt said the government’s investment plan is sufficient to support economic growth over the next two decades.
“If we don’t invest now, our infrastructure will not be able to support economic growth. For example, the Laem Chabang deep-sea port now handles 55% of our imports and exports, but it will not be able to meet the demand in five years, so we need to expand it now,” he said.
Mr Kittiratt insisted the government is not worried about financing due to the ample liquidity of the Thai financial system, at about 3.5 trillion baht.
Apart from the 2-trillion-baht investment plan, there is a liquidity surplus of 1.5 trillion baht in the money market, which can be tapped to meet local loan demand.
“Now is a good time to invest in infrastructure, as it would help absorb excess liquidity, thereby easing inflationary pressure,” Mr Kittiratt added.
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