Bt2-tn loan bill passage paves way for launch of infrastructure plan

The Democrats yesterday filed a petition to the Constitutional Court, claiming the law lacked two main parts – the specifications of projects and a tighter financing scrutiny method. 

“If a law like this is passed, the country’s long fiscal discipline will collapse and this could inevitably lead to a crisis,” Democrat MP Korn Chatikavanij said.

Economists believe that the mega investment would be the key engine to drive the economy next year, after economic growth decelerated this year. The private sector also welcomed the investment programme, which will boost Thailand’s logistics capacity. Isara Vongkusolkit, chairman of the Thai Chamber of Commerce, supported the investment, but said the government should prioritise the projects to avoid straining the fiscal position. For example, the double-track rail should be invested in first to reach major cities. The projects should be implemented transparently and the government should stress fiscal discipline. 

“A further delay will affect spending and GDP,” he said.

Transport Minister Chadchart Sittipunt, a key man for the investment scheme, said the scheme would be launched next year. While the Constitutional Court is reviewing this law, the ministry is working on the establishment of the project management office (PMO) to be initially supervised by the Transport Ministry, with help from other state agencies. 

Consulting companies will be hired to draw up a project management system.

Preliminary discussions have been made with the Asian Development Bank and the World Bank as well as the Anti-Corruption Organisation of Thailand to help monitor the project.

“We must discuss with all parties to help set up the related systems for the PMO. With clearance from the court, we can immediately set up the PMO,” he said. 

Some projects could go ahead even if the court rules against the bill. However, the decision would hurt investor confidence in Thailand, he added.

The borrowing bill was passed by the Senate by a 63:13 vote at 3am on Wednesday.

Investment in Thailand’s logistics system, especially through the Bt2-trillion infrastructure programme, will strengthen the country’s competitiveness in the Asean Economic Community, according to research by King Mongkut’s University of Technology Thonburi.

The research, conducted by the university’s Graduate School of Management and Innovation, is sponsored by the National Research Council of Thailand and the Thailand Research Fund.

Assoc Prof Thananya Wasusri, who heads the school’s AEC logistics research, said yesterday that development of the country’s logistics system will support the country’s global competitiveness. 

Thailand ranks 38th out of 144 countries in the Global Competitiveness Index (GCI) and 29th in the World Competitiveness Scoreboard. If the country upgrades its logistics system to facilitate greater trade and investment, the country’s ranking will advance to 37th in the GCI and 28th in the World Competitiveness Scoreboard. 

“The logistics system covers not only transportation, but also IT management and such systems as customs and packaging,” she said. 

When the government plans to invest Bt2 trillion in the country’s infrastructure, that will also improve the country’s transportation system to serve the logistics system in the AEC, Thananya said.

Thailand has potential to become the logistics hub of the AEC because its infrastructure is better than those of its neighbours such as Cambodia, Vietnam, Laos and Myanmar, she said. 

However, Thailand has to develop its logistics management system as Singapore and Malaysia’s rankings in the Logistic Performance Index are now higher. Singapore is No 1, while Malaysia is 29th and Thailand 38th.

“The investment in infrastructure, especially the rail system and logistics management, will help boost the country’s logistics system so that it can vie with other countries in the AEC,” she said.