Infrastructure bids imminent

The government will open bidding for some infrastructure projects within two to three weeks to start money circulating to stimulate local spending and the economy, Deputy Prime Minister Korbsak Sabhavasu said yesterday.

Prime Minister Abhisit Vejjajiva, meanwhile, has warned state agencies that if they don't spend their budget allocations promptly, they will have to give the money back to the treasury.

Mr Korbsak said he hoped the timely launch of new stimulus measures, combined with the sale of government savings bonds next week, would have a strong impact on the economy.

The House and the Senate recently approved the government's proposal to borrow 800 billion baht for a three-year 1.43-trillion-baht stimulus package to revive the recession-hit economy.

The programme, known as "Strong Thailand 2012", will cover about 6,000 development projects including rural and urban infrastructure such as public transport, water resources management, public health facilities, education and tourism. It is expected to create more than 400,000 jobs a year and to lift economic growth by 1.5 percentage points per year.State agencies that fail to disburse their share of stimulus funds on schedule will face consequences, warned Mr Abhisit.

"As the government really wants the second economic stimulus plan to significantly boost the economy, budget disbursements must be effectively and thoroughly executed," said the premier. "Any agencies failing to fulfil their disbursements as planned need to return their outstanding budget to the treasury so that it can be used for other projects instead."

According to Finance Minister Korn Chatikavanij, spending on the second stimulus package would have two main elements: public-private joint investments, and investment projects by the government and state enterprises.

The government will establish a monitoring committee to oversee state investment project implementation. Disbursements have to be reported via the information technology system of the Prime Minister's Office.

The National Economic and Social Development Board (NESDB) will also be directed to evaluate the investment projects and their impact on economic growth.

In a related development, the premier also yesterday raised concerns with cabinet members about the baht's appreciation.

Mr Abhisit said the baht had grown stronger and would tend to continue in that direction in the future due to the weakening US dollar and reduction in import values.

"The latter factor indicates that local demand and investment are very low or there are almost no activities so something has to be done to stop the economy from sinking further," Mr Korbsak said.

Relate Search: Abhisit Vejjajiva, Mr Korbsak