B133bn boost to budget

B133bn boost to budget

2016 investment for rail, roads and water

Workers demolish the ill-fated Hopewell pillars at a construction site for the Red Line mass transit route on Vibhavadi Rangsit Road. The government plans to set aside a massive investment budget for new electric train routes in the coming fiscal year. (Photo by Thiti Wannamontha)
Workers demolish the ill-fated Hopewell pillars at a construction site for the Red Line mass transit route on Vibhavadi Rangsit Road. The government plans to set aside a massive investment budget for new electric train routes in the coming fiscal year. (Photo by Thiti Wannamontha)

The government will include a 133-billion-baht investment plan for the construction of electric train routes, roads and water management in the 2016 fiscal year starting Oct 1.

A budget for land expropriation of 2.74 billion baht to develop four electric train routes in Bangkok will be part of the plan, said Budget Bureau director Somsak Chotrattanasiri.

They are the Green Line's Mor Chit-Saphan Mai-Khu Khot route, the Orange Line from Thailand Cultural Centre to Min Buri, the Pink Line from Khae Rai to Min Buri, and the Yellow Line from Lat Phrao to Samrong.   

Water management projects worth 70 billion baht account for the largest portion of the investment budget in fiscal 2016. They include water management for 24.8 million rai of agricultural areas, increasing irrigation areas by 390,000 rai, expanding tap water areas and development of artesian water.

The government plans to borrow 40-50 billion baht to fund water management projects, Mr Somsak said.

Road projects include 11 road networks, 735 roads connected with agricultural areas, 157 bridges and roads connected to the Si Rat-Outer Ring Road Expressway and the Uttaraphimuk Elevated Tollway.

To speed up disbursing investment budget for the 2016 fiscal year, the government has asked state agencies to prepare their procurement processes early to allow them to take out budget immediately when the budget law is proclaimed in the Royal Gazette.

State agencies will be able to issue procurement invitations after Aug 27 when the budget bill has passed the National Legislative Assembly's second and third readings and awaits royal endorsement.         

According to Prime Minister's Office announcements governing procurement, state agencies are permitted to issue procurement invitations when they know the exact budget for such projects.

Public investment is expected to boost economic growth amid tepid exports, weak consumption and private investment sapped by high household debt and lost confidence in the economic outlook.

The government hopes that fast-tracked budget disbursement at the start of the next fiscal year will boost the economy in the final quarter.

Finance Minister Sommai Phasee has predicted that second half growth will be about 2.6%, softer than the first half and making full-year growth of 3% a challenge.  

The government has set the 2016 budget at 2.72 trillion baht, with a deficit of 390 billion, representing 2.9% of GDP.

Mr Somsak said the Budget Bureau's proposed bill on transferring undisbursed investment budget to the central budget would encourage state agencies to ramp up their disbursement on concerns that their budget will be chopped in the following fiscal years.

The Finance Ministry estimates that 85% of the 449-billion-baht investment budget set for this fiscal year ending Sept 30 will be taken out, below the 87% target, because around 10 billion or 2% of undisbursed budget is expected to be transferred to the central budget.   

The top 10 state agencies in terms of budget allocation had struck deals worth 220 billion baht or 88% of the 250-billion-baht budget as of July 10. Almost all projects are expected to be signed by the end of this month.

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