Ministry plans limited loans
The Finance Ministry said it might not borrow the entire Bt350 billion it has been authorised to raise by the executive decree for financing flood-prevention measures.
Chakkrit Parapuntakul, director-general of the Public Debt Management Office, said that the ministry has to borrow Bt350 billion before June 30 next year. However, many investment projects will take several years to be completed, and they should be properly financed by a normal annual budget not by an emergency decree, he said.
Therefore, the ministry would borrow under the decree to finance projects that could be constructed within a few years.
The projects that could be implemented right away are a flood barrier along the Chao Phraya River costing Bt24 billion, he said. Of these, projects for flood management on the eastern bank of the river will cost about Bt15 billion.
The ministry will borrow after the project is approved by the Budget Bureau and bidding has taken place, he said.
The ministry would borrow first from the money market and later convert these loans into long-term government bonds.
It will also borrow Bt50 billion to finance the state-owned insurance fund that will provide protection coverage for natural disasters – severe floods, storms and earthquakes.
Total borrowing this year could be as high as Bt800 billion, as the government also has to borrow Bt400 billion to finance the budget deficit of the current fiscal year, ending in September.
New borrowings could drive public debt as high as 50 per cent of gross domestic product (GDP) from 42 per cent of GDP currently.
Higher debt would not yet pose any serious threat to fiscal discipline, he assured. The ministry has set the sustainable public-debt level at 60 per cent of GDP as going beyond this level could endanger fiscal discipline.
In a separate development, Naris Chaiyasoot, director-general of the Treasury Department, said the department would not be able to pay compensation of Bt1.05 billion to BTS Group for piling work done at a real-estate project in Mor Chit at the BTS Skytrain terminal.
The department has proposed to Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong a real estate development project at Mor Chit, he said.
He said if the department could find a private firm to develop the project the department would ask that firm to pay compensation to BTS Group.
