The cabinet on Tuesday approved the draft two-trillion-baht infrastructure development loan bill, Finance Minister Kittiratt Na-Ranong said after the meeting.
The loan bill is expected to be forwarded to the House of Representatives for consideration next week.
The bill empowers the Ministry of Finance to gradually acquire loans to fund the government's planned infrastructure development investment megaprojects over the next seven years, Mr Kittiratt said.
The needed loans could be sought either in a foreign currencies or in Thai baht, he added.
"With this bill, the government would be able to seek sources of investment funds more efficiently and the private sector would feel more assured about its investment plans," Mr Kittiratt said.
He said the projects will be implemented in a transparent manner and they can be inspected because they have to be proposed to the Finance Ministry, the National Economic and Social Development Board (NESDB) and the Budget Bureau before getting the cabinet's approval.
This investment will help lower logistic costs, fuel consumption and travel time, he added.
"The investment will stimulate the real GDP growth between 2013 and 2020 by 1.0% annually and will also create more than 500,000 jobs," added the deputy premier.
Korn Chatikavanij, left, and Kittiratt Na-Ranong (Photo by Patipat Janthong)
Former finance minister and deputy leader of the Democrat Party Korn Chatikavanij said on Monday that he disagrees with the government's plan to acquire loans for financing the high-speed train projects.
Mr Korn said funding projects outside the normal budgetary system caused concerns over transparency. The bill provided no details of the development plans, as it should, he said.
The push for passage of the loan bill could be a violation of the constitution, he added.
The government's plan to repay the loans over the next 50 years would place a huge debt burden on the Thai p
Mr Korn said it is unnecessary for the government to acquire the loans. It could fund the projects via the annual budget system, which would be far more transparent.
Pongsak Assakul, chairman of the Board of Trade of Thailand, said on Tuesday the government's planned development projects to be funded under the legislation would help Thailand become a regional hub of Asean.
The transportation network development would reduce logistical costs from 18% to about 10% and strengthen the trade competitiveness of Thai manufacturers, he said.
Mr Pongsak said even though the raising of the loans would increase the public debt, it would still not exceed 50% of gross domestic product.
However, the government must come up with measures to ensure the transparency of expenditure on these development megaprojects, he added.
Saovanee Thairungroj, rector at the University of the Thai Chamber of Commerce economics faculty, took the same tone.
Ms Saovanee said the transparency of these megaprojects must be assured, to ensure the best benefit for the country.
All parties must keep a close watch on these projects, progress and join forces in monitoring them, she said.
Mr Kittiratt said on March 2 that a bill providing for the financing of the projects would be submitted to parliament during the current session, before April.
The megaprojects involve mainly road, air and maritime transport network development, he added.
He said his ministry and the Transport Ministry were working together in proposing the huge infrastructure development strategy and the bill to the cabinet. The projects would be developed over the next seven and a half years and the public would be kept fully informed.
Mr Kittiratt said that two-trillion-baht investment fund is worthwhile and in line with the principles of financial discipline.
Thailand has set its public debt ceiling at no more than 60% of GDP. At present, public debt is about 43% of GDP.
Mr Kittiratt said the two trillion baht in loans would be secured gradually until the end of 2020. The government would maintain fiscal discipline to ensure that debt repayments each year would not exceed 15% of annual national expenditure.