Bangkok Governor Apirak Kosayodhin said if the government ever asked the BMA to take over one of its projects, it would be able to raise funds on its own.

He said money raised through a bond issue could be used to pay for wastewater treatment plants and infrastructure projects like the Skytrain, should the government decide not to fund them.

"Bonds will also be issued if the funding offered by the government is not enough," said Apirak.

Funds to extend the Bangkok Transit System beyond Onnuj and Saphan Taksin stations were included in the fiscal-2006 budget.

Apirak said the BMA would wait and see whether the government would provide the budget to extend other routes.

Deputy Governor Panich Wikitset said the governor's team was now drafting regulations on borrowing conditions, which would later be reviewed by the city council. Once the regulations are in place, the BMA can use them anytime to issue and send bonds to the Interior Ministry for approval.

Local taxes and revenues allocated from the central government comprise about 95 per cent of the BMA's operating budget.

The BMA's budget for fiscal 2006 was Bt49 billion. The city has estimated Bt56 billion for fiscal 2007.

Panich said the BMA had calculated that if bonds were issued, the outstanding debt ceiling it could handle would be Bt25 billion. He said the BMA could repay 10 per cent of each fiscal year's budget.

Tris Rating president Warapatr Todhanakasem said the rating given to the BMA reflected its reliable and increasing tax revenues, prudent budgetary performance and strong, debt-free financial profile.

The rating, however, is constrained by a huge demand for capital

investment, an increasing financial burden from responsibilities delegated by the central government under the decentralisation plan and the absence of a concrete debt-management framework.

Piyarat Setthasiriphaiboon

The Nation