The World Bank suggests the government mobilise funds from the capital market to finance its 2-trillion-baht infrastructure investment to lower risks to the fiscal budget.
Kirida Paopichit, a senior economist at the World Bank's office in Thailand, said the BTS Rail Mass Transit Growth Infrastructure Fund, the country's first infrastructure fund, is a good way to raise funds, as the projects can be used as back-up assets.
Even though the Finance Ministry insists public debt will be maintained at less than half of gross domestic product, it depends on GDP growing by 4.5% to 5% per year, said Ms Kirida.
The government has also vowed to balance the budget in fiscal 2017.
The Public Debt Management Office estimates that public debt will be at 47.5% and debt repayment to expenditures at 7.4% this year, while next year these figures will move to 47.2% and 11.5%, respectively.
The Finance Ministry has said public debt must not exceed 60% of GDP and debt repayment to expenditures must not exceed 15%.
Ms Kirida warned that if the economy does not grow as planned and the current deficit continues, the government's plan to manage public debt may not be achieved.
She also suggested the government lower the debt burden by allowing the private sector to venture into investment, especially the most commercially viable projects.
For example, the British government invested in the construction and infrastructure of a rail project and then sold parts to private companies to gain capital to repay the debt.
But the companies have to rent out the system and operation to the government. The British government believes it does not need to own the assets of a public service, Ms Kirida said.
Another way to reduce the debt burden of the government for Thailand's dual-track railway project is to rent out land to private firms, especially land for building container yards near goods depots or along the railway line.
The high-speed train project should use Japan's bullet train as a model.
The Japanese government invested in building facilities and trains but let private firms bid on developing new towns. This generated higher revenue and increased the government's ability to repay debts.
As the transparency of the Thai projects is a major concern, the private sector should be allowed to play a greater role in monitoring projects closely, while the government should disclose as much information as possible, Ms Kirida said.
Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong said the water management and infrastructure projects can move forward despite the fact that many groups are trying to stop these developments.
"We have complied with the law in every procedure," Mr Kittiratt said.
The Administrative Court recently demanded that the water management projects comply with Section 67 of the constitution, which requires projects to conduct health and environmental impact assessments.
About the author
- Writer: Wichit Chantanusornsiri
Position: Business Reporter