A proposed bill authorising 2.2 trillion baht in new debt to finance infrastructure investments over the next several years will take effect in 2014, with two-thirds set to go towards rail improvements.
Prof Teerana Bhongmakapat, dean of Chulalongkorn University's economics faculty, suggested Thailand's rail system be upgraded from the current one-metre track gauge to the 1.43-metre international standard gauge.
Upgrading the rail system would significantly improve the country's logistics network and help reduce logistics costs and boost efficiency across the entire economy, allowing Thailand to take advantage of its geographic location to serve as a transport hub for the region, he said.
"It's a pity that the panel overseeing the investments did not see the benefit of upgrading the entire system, but rather decided to only introduce standard gauge on certain routes," said Prof Teerana.
The 2.2-trillion-baht investment budget will rely 80% on the public sector for financing. Prof Teerana said authorities should consider allowing the private sector to play a greater role through public-private partnerships (PPP) or infrastructure funds.
The draft bill, now being finalised by the Fiscal Policy Office, will authorise the Finance Ministry to borrow funds specifically for infrastructure investment. Borrowing may be from the local or international markets, with implementation to be the responsibility of state agencies or state enterprises.
Overall, the investment projects, spanning seven years after the law takes effect, will be aimed at strengthening "connectivity" both within the country and across the region.
Ministry officials say ensuring transparency in the investment programmes will be set in the law from the start. For instance, individual projects will be detailed in an appendix to the law.
State agencies responsible for overseeing specific projects will also be tied to set procedures and principles to ensure that the overall goals of the investment programme are met. A screening committee will also be appointed to oversee implementation of the investment projects, including vetting the viability and readiness of investment plans and approving final borrowing.
The Finance Ministry expects to submit the draft bill to the cabinet for review this month, with implementation to begin in fiscal 2014 starting in October.
In addition to rail projects, nearly a quarter of the 2.2-trillion-baht budget will be earmarked for road and land transport, with another 7% set aside for water transport and 4% for air transport infrastructure.
Major projects already planned under the law include 480 billion baht for four high-speed train routes running from Bangkok-Korat, Bangkok-Hua Hin, Bangkok-Chiang Mai and Bangkok-Rayong as well as 330 billion baht for five new mass-transit routes in Bangkok.
Another 160 billion baht in funds will be earmarked for 254 kilometres in new ring roads running around Greater Bangkok, while 88 billion baht will go to expanding facilities at Laem Chabang Port and 70 billion baht for Suvarnabhumi airport.