One day before caretaker Deputy Prime Minister Suriya Jungrungreangkit's screening committee was due to discuss detailed terms of reference for construction of Bangkok's three mass-transit railway lines, the caretaker government has been advised by a leading economic think-tank that it should leave the handling of the mega-project investment to a new government.

The National Economic and Social Advisory Council (Nesac) spent three hours yesterday discussing draft suggestions and recommendations that will be put to the screening committee today.

Among other things, the draft raises the pros and cons of the government's plan to proceed with the first part of its giant mega-projects under a "turnkey" concept, where the investor can quote a price before beginning and receive the money on completion.

The council is an independent agency set up under the Constitution to provide advice to the government. The government is not obliged to follow its recommendations.

The council's main concerns centre on political etiquette. It believes the money-consuming project should not be carried out by a caretaker government, as this could pose problems with authorisation, transparency and budget allocation.

It is also concerned that the caretaker government might want to proceed with the project to gain popular votes ahead of the upcoming election.

"The caretaker government should be concerned with the necessity of the project and its consequences. They should consider whether it is appropriate to carry out a large project that will create a huge binding burden for the next government and the existing budgets," said Gothom Areeya, who chaired the council's meeting.

He said the government should construct the three routes one by one, and not three at the same time. This way it can depend on some return on investment.

The caretaker government has recently made clear that it will go ahead with three mass transit lines - the red lines from Bang Sue to Rangsit and from Bang Sue to Taling Chan, the purple line from Bang Yai to Bang Sue, and the blue lines from Hualumphong to Bang Khae and from Bang Sue to Tha Phra.

Plans for the investment have also sparked a possible rift between caretaker Prime Minister Thaksin Shinawatra and Suriya, who reportedly stormed out of a Cabinet meeting on Tuesday after Thaksin vowed to handle the terms of reference himself to speed up the project. Later, Thaksin reportedly backed off, assigning Suriya to work hand in hand with caretaker Transport Minister Pongsak Ruktapongpisal to complete the terms of reference and call for bidding.

A council member who asked not to be named said the Nesac was concerned that the turnkey concept would benefit the Thai Rak Thai Party, which is vying to win the election on October 15.

"Certainly, surveys show that Bangkok residents have a high demand for subways," he said.

The independent agency suggests that the government should first invest in the red route, linking Bang Sue with Rangsit and Phya Thai with Makkasan, to create a rail route between Don Muang Airport and the new Suvarnabhumi International Airport.

Gothom said that under the turnkey concept, construction costs could be higher than necessary because the contractors could set prices high enough to cover all possible risks.

"Nesac is of the opinion that rather than focusing solely on bidding prices, the government should firstly focus on the overall benefits to the nation. The state should benefit from higher employment, investment and technology transfer as well as a higher demand for local contents," he said.

Gothom admitted that the turnkey concept could speed up the construction, as the contractors handle everything, avoiding government limitations in terms of technology, project management and budget.

"Yet, to build up public debt, the government should be concerned with fiscal discipline. This project will raise foreign debt by US$2 billion [Bt75.68 billion] for machinery imports, while contractors could bring in obsolete or inappropriate technology at a high price, which could pose problems for maintenance and operations. Moreover, the turnkey concept will limit the number of qualified contractors, which could lead to collusion between contractors and state officials," Gothom said.

Watcharapong Thongrung

 The Nation