Govt's huge investment in infrastructure key to competitiveness, says Virabongsa

Under the Bt350-billion water-management plan and the Bt2.27-trillion infrastructure plan, Thailand will be ready to draw more investment and see itself as a logistics hub in Asean, the chairman of the Strategic Formulation Committee for Reconstruction and Future Development said in an interview with Nation Multimedia Group.
“Our infrastructure is running at full capacity. With new investment [from the public sector], private investment will spike. They [private interests] will be encouraged to invest more. We need to clear the bottlenecks,” he said.
Under the Bt350-billion plan, the Central region is designated to play a dominant role as a manufacturing base, particularly for water-intensive industries, while heavy industries, with less demand for water, can be further concentrated in the East.
“All industries need water in the production process. It’s the government’s duty to put up water-management infrastructure,” he said.
“Yet in the Chao Phraya basin, water shortages are a common occurrence due to heavy farming activities, not flooding. As such, the investment must be geared towards water management, not flood protection, as flooding is not a usual phenomenon here.”
Confirming the potential of the Central region as the manufacturing base is the fact that despite the flood disasters last year, most companies in Ayutthaya and Pathum Thani are not relocating their factories. Nomura Economics has said the flood is the major catalyst for new infrastructure investment, which will in turn boost private investment and domestic consumption at a time when the export sector is slowing down. Virabongsa said the baht’s devaluation suddenly made Thai crops attractive in the global market while tax-system restructuring made Thailand attractive as a manufacturing base for auto-makers and the electronics industry.
An important element of the plan is to ensure sufficient water distribution for farm and non-farm sectors. To handle floods, proper floodways must be in place, with a well-designed compensation scheme for the adversely affected, he said.
Run-off from the North will be diverted in three ways – to the West towards the Thachin River, to the East towards Rangsit Canal and to the Gulf of Thailand via Bangkok.
While the East needs pumps to push water up to high elevations, watergates in Bangkok must be widened. A computerised system is required to oversee the flow, he said.
Bidders of various nationalities have shown interest in the project and they are encouraged to come up with any technology. The government will later shortlist three or four bids and hire a consultant to evaluate them.
“They are told not to worry about money. Just submit the best technology and a fair price,” Virabongsa said.
While expressing concern that a change in government could derail everything, he expects the bidding and contract signing to be completed in the first half of next year.
The Bt2.27-trillion investment plan, which is under the study of the National Economic and Social Development Board, is designed to strengthen Thailand’s position in light of regional integration.
About 60 per cent of the investment is aimed at preparing the rail network for linkage with neighbouring countries via the North-South and North-East corridors.
Dawei in Myanmar will also fit into the picture, with the huge deep-sea port linked with Thailand by a new expressway.
Virabongsa is optimistic that Myanmar’s reform process will continue, eventually leading to the lifting of US sanctions. Thailand could play a greater role in the development in Dawei, he figures, after the lifting of sanctions, which would encourage funding participation from Japan. Facilitating this would be the fact that Myanmar is being encouraged to upgrade its concession with Italian-Thai Development to a government-to-government contract.