Thailand continues to struggle to establish proper public-private partnership (PPP) schemes and so will seek to learn from British expertise in infrastructure, says Transport Minister Chadchat Sittipunt.
He said even though PPPs have been successfully applied in the power sector, such schemes have yet to take off in the transport sector due to risk allocation.
In this sector, the government has used PPPs in mass transit rail lines including the Blue and Purple lines.
The Blue Line, for instance, uses a PPP model in which the government invests in all civil works. The private sector takes care of the system and operations while sharing the revenue with the government.
For the Purple Line, the government will invest in the civil work while the private sector deals with operations. The government incurs all expenses and collects the revenue.
That means the private sector takes full risk in the Blue Line but no risk in the Purple Line, said Mr Chadchat.
"These are two extreme models. That's the major problem we are facing at the moment, and we need something in the middle," he told a forum hosted by the British embassy yesterday.
Mr Chadchat said public debt to gross domestic product will remain below 50% as the 2-trillion-baht infrastructure scheme is implemented.
Stephen Green, Britain's trade and investment minister, said British firms are keen to work with Thai partners under Thailand's infrastructure programme.
Joined by delegations from 23 British companies, Mr Green is leading a two-week visit to Southeast Asia.
Between now and 2030, US$30 trillion will be invested in infrastructure globally, of which only one-third will come directly from the government, he said, citing a World Bank report.
"Most governments do not feel very cash-rich at the moment. This is going to have to be financed by bringing together sources of capital from the private sector. PPPs are a great opportunity for British services, as we have the breath of expertise with them," said Mr Green.
Michael Cooper, HSBC's infrastructure director for Asia Pacific, said PPPs for infrastructure development must take into account the local environment.
The PPP model invented by Margaret Thatcher's government was successful in Britain and has been adopted and modified globally, he said.
Alex Guy, a transport and PPP lawyer at the global law firm DLA Piper, said Thailand has potential for PPPs in many projects.
But PPPs are different from privatisation, as the former focus on providing services in which the public takes control of the service, while the latter is for making profits when assets or businesses are sold to the private sector.
Pascal Leccia, Standard Chartered Bank's director of project and export finance, said while PPPs are a global trend including in Asia, they are not always the solution, and governments need to be selective when using them.
To make PPPs work, costs need to be lower for the private sector, which will bring more efficiency in terms of operation and services.
"What's happening is that the regulatory environment is changing and we are less in a position to lend long term," said Mr Leccia.
"Now the new natural trend will be to lend for 7-10 years, whereas the projects we're talking about here are for 25-30 years."