Govt upbeat on loans bill

THE GOVERNMENT, backed by strong support from the business sector, has expressed full confidence that the Bt2-trillion borrowing bill will win the approval of the House, even as the Opposition plans to launch an offensive.
The government believes that the bill will pass into law after deliberations today and tomorrow. While the government hopes this will enable new investment projects to be kicked off and boost the economy in light of sagging export demand, the business sector foresees waves of new investment along with the new roads and railroads.
Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong is convinced that the bill will sail through the House discussions as it has been carefully prepared and the government is ready to hear comments from more than 100 opposition MPs lining up for that. The government is also ready to explain the objective of the law to the Constitutional Court, he added.
He defended the project screening process, saying only projects with economic value would be approved. The only reason the bill would not pass into law is if it violates the Constitution, he said.
“Even if there is a major stumbling block, there is a way to work around this. There’s always a solution in this country,” he said. “However, if approval is not granted, it would be a pity and this would affect the country’s macro-economic management. Anything slow or late could impact the economy. At a time when external factors are uncontrollable, all parties should support domestic investment. The economy would further expand if we can proceed with the planned investment,” he said.
About half of the borrowing will be used to finance the construction of a high-speed train, mainly to boost the tourism industry. Meanwhile, some funds would be invested to create a double-track rail network to enhance the country’s logistics competitiveness as well as mass transit routes.
After the House approval and clearance from the court, some investment projects are expected to be launched next year.
“If it is passed, it should benefit all sectors, in particular transportation and logistics, which will ensure the Kingdom’s growth. However, if it is delayed, this will affect Thailand’s competitiveness in the liberalisation era,” said Somkiat Anuras, vice chairman to the Thai Chamber of Commerce.
He said private enterprises back the bill, as it would help boost Thailand’s development in various sectors. In this respect, the government must explain clearly to the public the benefits and assure them there would be no corruption. For greater transparency, he encouraged the government to let the private sector get involved in the screening process.
High-speed trains and new infrastructure will benefit the tourism industry, said Yutthachai Soonthronrattanavate, president of the Association of Domestic Travel, as this will improve Thailand’s regional connectivity. He is also concerned that a lack of transparency could lead to financial difficulty given the huge debt.
Aside from the transparency issue, he is also concerned about the post-construction management if Thailand is to maximise the benefits of the investment.

Tourism boost
Sarawut Saetiao, president of the Chiang Mai Tourism Business Association, sees a larger number of visitors to the northern province, which will be connected to Bangkok by a high-speed train. He also favours the bill, as the investment will strengthen Thailand’s status as a regional transport hub in Asean. Meanwhile, he urged society and experts to help monitor the implementation of the scheme, to ensure transparency.
“I believe that the government has scrutinised the investment projects and prepared for the financial management. As borrowing will be made bit by bit, this should not aggravate the country’s financial burden much,” he said.
Pruksa Real Estate president and CEO Thongma Vijitpongpun foresees a big change in Thailand’s property development if this scheme kicks off. New property projects will be launched along new transport routes, while more condominium projects would be kicked off along new mass transit routes.
Most economists believe that the seven-year scheme will start boosting the economy from next year onwards.
Roong Sanguanruang, chief market analyst at the Bank of Tokyo-Mitsubishi UFJ’s Bangkok branch, said that as only projects not requiring environmental impact assessment (EIA) will be kicked off, this would not boost this year’s economy. The bank forecasts 3.4 per cent growth this year. The results should be visible next year, Roong said.
CIMB Thai Bank executive vice president Bunluasak Pussarungsri said with the House approval, the government may need time to sort out projects not requiring EIAs. In five years, these should inject about Bt500 billion into the economy, or about Bt100 billion a year. Given that amount of injection into the economy, he is not much bullish on its impact on economic growth.
Still, Thanavath Phonvichai, director at the Economic and Business Forecasting Centre, foresees above 5 per cent growth for next year, largely on positive psychological impacts on the private sector. If this bid collapses, growth would be only 4-4.5 per cent.
“This investment is the only key government measure to boost the economy next year,” he said.