French investors wary over fair play on projects
FRENCH companies are keen on a share of the action from the proposed massive investments to upgrade Thailand’s rail system, but have voiced concerns over whether they will have a level playing field to compete for business.
Francois Corbin, chairman of the France-Thailand Business Council, is leading a delegation of representatives of 18 French companies engaged in the railway value chain to seek out business and investment opportunities in Thailand. Yesterday, their views were aired at a seminar entitled “Thai-French Urban and Rail Transport”.
Pablo Romero, business development director of Transdev Asia, in response to a question on investors’ views about the public-private partnership (PPP) plans for big infrastructure projects in Thailand, said: “For me, what is very important is to create a level playing field between incumbent players and foreign players, or players outside the market. This is needed to allow them to enter the market.”
To ensure a level playing field, the government should allow sufficient time for responses to tenders, since investors need to think carefully about technical works and financing, he said. In Europe and Australia, the time given for tenders is about six months, said Romero, noting that the new PPP law brought in some improvements, but additional steps are required in order to attract more foreign investment to Thailand.
Drawing a comparison between PPP projects in Singapore and Thailand, Romero said the Singapore government gives more weight to the quality of investment while the Thai government focuses more on price.
Florian Blin, general manager of Artelia Thailand, said that in the past there were no clear guidelines for PPPs and often regulations were changed in the middle of a project’s lifespan. “When new people would come in the regulations would change,” he said, referring to the tendency of policymakers to rewrite investment regulations.
He urged the Thai authorities, in light of his company’s experiences, to set clear guidelines on PPPs and to state the objectives of policy in this area.
Kang Hang Leung, senior finance specialist for transport and communication at the Asian Development Bank (ADB), said the institution could step in to promote PPPs by providing financial and technical support. The ADB could guarantee financial payment on time in case the government faced some legal procedures, such as awaiting approval on matters from the parliament. The ADB would first make payment to the investors, he said.
Meanwhile, Voravuth Mala, deputy governor of the State Railway of Thailand (SRT), said the Finance Ministry would this week consider approval of the development of a shopping mall and office building project, on 35 rai, that forms part of the Bang Sue Central Station development.
The ministry is expected to give the green light to this PPP project, Voravuth said.
The Transport Ministry will also review the investment plan for the entire Bang Sue Central Station project, which is under construction, with a view to making some changes, he said.
The SRT may construct a residential building for those who have to be relocated from the development site, he added.
Meanwhile, Teerapong Rodprasert, Vice Minister for Transport, said there are many railway projects in the pipeline – not only in Bangkok or the Eastern Economic Corridor (EEC) - that could draw foreign investment.
Large cities such as Phuket, Khon Kaen and Chiang Mai have plans to build light-rail systems in order to solve traffic congestion.
Teerapong said the Commission for the Management of Land Traffic has already approved a light-rail project in Khon Kaen. The speed of its implementation hinged on the readiness of private companies in that city to proceed, as the project would be financed by private investors, he said.
