Mega-project budget could be trimmed

They can immediately cut the budget of the mega projects that have yet to undergo bidding, he added.

Santi said state agencies overseeing projects already bid out such as the Purple Line mass transit project should negotiate with the contractors to lower the project cost after receiving the bidders' price proposals.

He added that the government might not cut back the construction budget of the Red Line mass transit project because the budget increase was in line with the expansion of the work scope and not only the rising oil price.

He added that the budget reduction could be made without seeking the Cabinet's approval.

"The construction cost has to go down in response to the falling oil price. The projects' consultants have been aware that there must be revision of the cost in this situation. There is no problem in the cost adjustment for the projects that have yet to start the tender process. For those which have started the process, the state agencies in charge have to negotiate with the contractors after opening their price proposals if it is acceptable for them if the project budget would be revised," he added.

The budget of Purple Line mass transit project was marked up to Bt36 billion from Bt31 billion to cover the rising prices of oil and raw materials.

Santi added that for the 2009 fiscal budget, state agencies have to return to the state coffer the budget left over after the spending. The budget was determined in a way that covered the rising oil price and construction material cost.

A source at the transport ministry said the combined 2009 investment budget of the transport state agencies amounted to Bt97.999 billion versus the 2008 budget of Bt87.700 billion. The budget increase was meant to cover the rising oil price.

The source added that if the oil price would remain unchanged from the present until the projects' completion, the state agencies would save Bt10 billion from the investment budget.