Though the caretaker government recently approved continuation of the construction of three light rail lines, the financial adviser to the mass-transit committee has raised some concerns over the financing of the project.

Pichit Akrathit, a member of the committee, said the government was at present deliberating how to spend the money. The government has not said much about financing the project, except that it intends to raise the money from the fiscal budget and borrowing.

"Although there are some restrictions on the mandate of the caretaker government when it approved the commencement of the three lines, it should have given a thought to the financing of the project," said Pichit.

"Currently the government only has two choices, to spend from the fiscal budget and to raise the capital from either domestic or international loans," he said.

The first three lines are the Red Line, connecting Suvarnabhumi Airport and Don Muang Airport to Chiang Rak, the Blue line; an outer ring to Bang Khae; and the Purple Line, connecting Bang Sue to Bang Yai. Economists believe the government approved the construction of the three lines as part of its efforts to inject money into the economy ahead of the general election.

Last October MFC Asset Management Plc planned to launch a country fund that would attract money from Middle Eastern investors, increasing the government's scope in financing the mega-project rather than falling back on the fiscal budget and borrowing.

However, the delay in the government mega-infrastructure project due to political turbulence has automatically delayed this plan.

Political uncertainty has also disrupted the plan of the state-owned MFC to become a holding company early this year. It had planned to branch out into financial advisory services, especially in support of the government's investment plan.

"We have to wait until we're more certain before we take a decision. The plan is still on, but we have to wait for the right moment," said Pichit, also the president of the company.

Nevertheless Pichit said the change would not affect the company's target of becoming the region's leading asset-management company by 2010.

At the end of April the firm had 130 funds and a total of Bt192.95 billion in assets under management. It aims to achieve an annual growth rate of 20 per cent and Bt400 billion in assets under management within five years.

Piyarat Setthasiriphaiboon

The Nation