New ToR for double-track rail projects expected in two weeks

Meanwhile, share prices of construction have suffered declines, attributed to the junta’s delay on the railway projects.
After the original ToR for five double-track railway projects were scrapped by the junta-appointed “superboard” overseeing state procurements, Anon Luangboriboon said he would meet with the Government Procurement Scrutiny Commit-tee today to discuss the issue. 
He expects the new ToR to be finished within two weeks before the proposal is submitted to the Transport Ministry and the Cabinet. 
“If it goes as planned, then the SRT will be able to choose contractors in September or October,” he said. 
“Should the contract be divided into many smaller contracts in order to allow small contractors to participate in bidding, the risk of project failure will increase and SRT will have to deal with that,” he added. 
Anon was referring to the superboard’s recommendation that the new ToR should allow medium-seized contractors to participate in government procurement. Prasarn Trairatvo-rakul, chairman of the commission, believe that having more bidders would create transparency and a level playing field. 
The five double-track railway projects are the Nakhon Pathom-Hua Hin route, the Lop Buri-Pak Nam Pho route, and the Map Kabao-Thanon Chira Junction, Hua Hin-Prachuap Khiri Khan and Phrachuap Khiri Khan-Chumphon routes. The total length is 668 kilometres and all five projects will be worth about Bt95.8 billion in total. 
Sumet Ongkittikul, research director at the Thailand Development Research Institute, who specialises in transportation and logistics policy, said there were pros and cons for both large and small contracts in a project like this. 
Large contracts awarded to giant firms have low risk of the project not being completed on time. However, such big contracts could also allow a small number of giant contractors to take advantage of the SRT, resulting in high costs or irregularities.
On the other hand, awarding several contracts to small companies carries a high risk of project delays or contractors abandoning their work altogether, Sumet said. 
Meanwhile, brokers have reviewed their investment outlook on listed construction companies because of the delay of the double-track railway projects and other large infrastructure programmes. This has adversely affected the share prices of construction outfits listed on the Stock Exchange of Thailand. 
Maybank Kim Eng Securities said it had downgraded the investment outlook from “overweight” to “neutral” for listed construction companies as double-track projects are expected to be delayed into the third quarter of this year. Moreover, several infrastructure projects including the Bt130-billion southern extension of the Purple Line have been delayed from first half of the year to the second half. 
Shares of Sino-Thai Engi-neering and Construction closed at Bt23.70 yesterday, down by 4.05 per cent. Ch Karnchang closed at Bt26.75, down by 1.83 per cent, and Italian-Thai Development at Bt4.92, down by 0.81 per cent.
Maybank said that currently share prices of construction firms were relatively high, judging from their P/E (price to earnings) ratios. Moreover, they had paid investors low dividends. Delays of government projects will likely affect their performance adversely this year. 
Government procurement has long been blamed for widespread corruption among senior officials, executives of state enterprises and policymakers. Prime Minister Prayut Chan-o-cha used his powerful authority under Article 44 of the junta-imposed interim constitution set up the Government Procurement Scrutiny Committee, known as the superboard, to vet large public projects proposed by state agencies.