2015 projects could run to B100bn

2015 projects could run to B100bn

Details and budgets still subject to revision

The first-year investment budget for the 2.4-trillion-baht infrastructure plan to be proposed today by the transport strategy committee is expected to reach 100 billion baht.

The infrastructure plan will be forwarded to ACM Prajin Juntong, head of the economic team at the National Council for Peace and Order (NCPO), for consideration.

Later the plan will go to NCPO chief Gen Prayuth Chan-ocha for final approval.

Chula Sukmanop, director-general of the Transport and Traffic Policy and Planning Office, said the seven-year plan, starting in 2015 and ending in 2022, is likely to get the go-ahead, although some details and budgets could be further revised.

Most railway projects will be financed by the fiscal budget and loans, while most road projects will be funded by the fiscal budget and public-private partnerships (PPPs).

The massive infrastructure plan is a reworking of the 2-trillion-baht proposal of the former Pheu Thai Party-led government.

The revised plan has shelved high-speed train projects worth about 780 billion baht and added aviation improvements, motorways connecting Bangkok to adjacent cities and dredging projects for a combined 1 trillion baht.

Budget Bureau director Somsak Chotrattanasiri said the bureau is in the process of organising funding for projects, mainly from the annual budget and loans.

In order to make budget organising effective, only projects to be carried out in fiscal 2015 will be included in the budget.

According to a source at the Finance Ministry, plans call for additional financing of some projects through PPPs.

The source said one stumbling block was that investment through PPPs could turn off investors who recalled the state's past broken promises and adjustments to fees already agreed in contracts.

During the first year of the plan, the source continued, investment is projected to fall within 100 billion baht, with the greater part spent on construction design, environmental studies and appropriation (but not construction costs).

Projects ready to be carried out include four-lane roads, some dual-track rail and three electric train lines: the Orange Line from Thailand Cultural Centre to Min Buri, the Pink Line from Kaerai to Min Buri, and the Yellow Line from Lat Phrao to Samut Prakan.

Nipon Poapongsakorn, an economist at the Thailand Development Research Institute, said a restructuring of the State Railway of Thailand was needed before railway projects proceeded.

He questioned the efficiency and ability of the state enterprise to run these projects.

"This state enterprise should rent out its rail networks and let a private enterprise operate them," Mr Nipon said. "It also requires restructuring in order to solve long-standing problems."

He said all projects should be carried out only after feasibility studies were done and environmental impacts assessed.

On top of that, land appropriation and compensation paid to land owners must be addressed fairly.

"Those benefiting from land sales should be taxed for their additional gains and those land owners [whose lands are expropriated] should get just compensation from the government," Mr Nipon said, adding that these days compensation tends to be much lower than the actual market price.

Most projects historically have been centred on Bangkok, a habit Mr Nipon wants to see change.

"There should be a vivid master plan for long-term development of each region instead of a focus on Bangkok alone," he said.

"Then the infrastructure projects should be put in based on the master plan. This would be an effective way to narrow the gap between Bangkokians and people living outside this developed city."

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