Firms can vie for more state work

SURAT THANI : The Finance Ministry will let the private sector bid for more state projects under the second phase of the 1.43 trillion baht Thai Strength economic stimulus package.

Finance Minister Korn Chatikavanij said government agencies had been slow to disburse the 1.16 billion baht funds earmarked for investment projects in the second phase, so the private sector should get a bigger role. The state sector had also implemented projects too slowly, he said.

Mr Korn was speaking after he and ministry officials held talks with representatives of the World Bank in Koh Samui about the government's efforts to put the battered economy back on its feet through the scheme.

For fiscal 2009, the government had increased the ratio of public-private participation to 10% of new infrastructure development spending, totalling 143 billion baht.

The government had previously earmarked just 2.8 billion baht, or 2% of total spending for this year, for PPP projects.

The ministry and the World Bank agreed the ministry should reduce barriers preventing private firms from taking part in the government's investment projects.

It should also get a state agency to supervise joint investment programmes between the government and private firms.

The government's e-auction process had held up the government's investment plans, the ministry and World Bank agreed, as it had failed to cut poor spending or end bidding collusion.

The Abhisit government has used the e-auction process for all its procurement and hiring activities. Past governments used it only to buy office supplies.

The World Bank has suggested that the government also adopt other auction approaches for state projects, said Mr Korn.

The ministry will amend e-auction regulations to overcome the bottlenecks. The changes would be complete by the end of the month.

The World Bank also recommended the government set up a fund to invest in infrastructure development.

Talks have been held with the Chinese government about setting up such a fund which would pay for infrastructure projects that benefit both countries.

For example, a railway line would be built which would run from China all the way to Singapore.

The World Bank suggested private firms be encouraged to take part in the infrastructure fund, said Mr Korn.

Deputy Finance Minister Pradit Phataraprasit said the World Bank also wanted the government to offer more assistance to poor and small-scale farmers.

The government would draw up a list of needy farmers and use it as a database for deciding on future assistance.

Luck Wajananawat, senior vice-president for policy and planning of the Bank of Agriculture and Agricultural Cooperatives, said the World Bank had also urged the government to pay farmers direct subsidies to ease their plight, while allowing market forces to freely price farm produce.