Bt180-bn deals for mega-projects to be signed soon
Finance Minister Apisak Tantivorawong said yesterday that contracts worth about Bt180 billion for six infrastructure mega-projects would be signed before the end of this year, with about Bt130 billion to Bt140 billion of that entering the economic system
"The government spending on mega-projects means that the economy will gradually recover," he said.
The Transport Ministry also told him at the fifth meeting of the Government Stimulus Measures and Investment Steering Committee that Bt1.6 trillion worth of contracts from 20 mega-projects would be signed by next year and Bt300 billion would enter the economic system by 2017 and Bt400 billion by 2018.
"The ministry and the BOI [Board of Investment] measures that were introduced two weeks ago are also expected to encourage private investment next year," he told reporters.
The Finance Ministry has offered a double tax deduction and the BOI has offered an extension of privileges to companies that are willing to begin their investment to increase their competitiveness next year. The ministry is also looking for a measurement to make sure that private investment has actually increased to the level that the government wanted.
"The Transport Ministry has estimated the contract numbers that will be signed next year. If the contracts are signed, then you can be confident that construction will happen.
"The representative for the Transport Ministry reassured the meeting that it is confident that all the [Bt1.6 trillion] contracts will be signed by next year, it is accelerating this as fast as it can," Apisak said.
"I believe that the private sector will begin to invest next year and we have announced that next year will be Thailand’s investment year.
"This is something that the private sector should do, since this is a perfect opportunity for investment," he said.
Combined, the investments by the government and the private sector should be able to improve the growth in gross domestic product growth to about 3.8 per cent next year, compared with this year’s 2.9 per cent.
The mega-projects will be financed by the fiscal budget, public-private partnerships and the infrastructure fund known as the "Thailand Future Fund", which were approved by the Cabinet this month.
"Projects that are expected to have a higher return will have more involvement from the private sector. The lower-return projects will mostly be supported by the government via two ways – the budget and the fund," Apisak said.
The ministry might increase the budget for the government’s soft-loan programme, as Bt68 billion in loans from the Bt100-billion budget have already been extended to small and medium-sized enterprises via state and commercial banks.
"We are considering it but we have told them in advance that in order for the commercial banks to be able to support their customers fully, the budget was designed as a ‘first come first serve’ scheme.
