Bt2bn 'k bill' proposal

K bills are cost-escalation factors, which represent the difference that the government must pay on top of the original contact value should construction material prices rise in state contracts.

A Cabinet resolution of July 15 allows the calculation of K bills by plus or minus 2 percentage points from the current cap of 4 per cent. This is effective only for projects signed between October 1, 2007 and September 30 this year.

The Cabinet last month assigned the Budget Bureau to review the formulas for calculating K bills.

Speaking yesterday at the seminar "Actions under the Cabinet's Resolution" held by the Thai Contractors Association, Budget Bureau senior adviser Valairat Sriaroon said his agency had hired Chulalongkorn University to be the third party for reviewing and creating the formulas, which are expected to be flexible for calculating K bills in line with changes in raw material prices.

"We now have only 60 days left to complete the new formulas. We hope the new formulas will be fair to all the parties and help ease the burden on contractors," she said.

The Thai Contractors Association has played its part in creating the formulas by providing information to the university.

Aungsurus Areekul, secretary-general of the association, said contractors should before next Friday submit documents proving the burden they have faced from rising constructio-nmaterial costs to the agencies from which they won the bidding.

"We organised this seminar because few contractors know that they must submit their documents in order to claim 2 per cent of the K bills and other benefits approved by the Cabinet," he said.