30% of transport project to come under PPP scheme

The government plans to allow the private sector to take a stake of up to 30 per cent in a government project to improve the country's infrastructure, the State Enterprise Policy Office said yesterday.

The ratio more than doubles the 14 per cent previously planned for the public-private-partnership (PPP) programme.

Under the plan, the government will invest in infrastructure and the private sector will be allowed to invest in the railway system's rolling stock.

Prasong Poontaneat, director-general of SEPO, said about 70 per cent of the Bt2.27-trillion infrastructure scheme planned for 7 years of development would be directly invested in by the government, while the remaining 30 per cent would be open for the private sector.

The Finance and Transport ministries are preparing the project details, which must be fully in line with the nation's development strategies.

About 70-80 per cent of the Bt2-trillion project will go to the transport system, including double-track rail, high-speed trains and roads.

"The likely PPP projects include electric-train projects. The government will invest in both infrastructure and the rail system. The private sector will be allowed to invest in the rolling stock," Prasong said.

A Bt100-billion project for improving the State Railway of Thailand will be included in the overall Bt2-trillion project.

The cost of using the rail system is lower than that for the road system, he said, adding that rail transport carried a cost of Bt0.93 per tonne per kilometre, compared with Bt1.72 for transport by road.

The government targets reducing the country's current logistics costs of 15.2 per cent of gross domestic product through the infrastructure project.

The draft PPP law has been passed by the Senate, which made slight adjustments to provide further clarity over PPP investment.

Commenting on the recent strikes by state-enterprise workers seeking more compensation, Prasong said executives had to communicate clearly with employees that any pay increases must be in line with each state enterprise's performance.

The executives should also disclose financial and performance information to all employees.

The State Enterprise Policy Office will appraise each enterprise's performance and, if the strikes affect performance and public services, this will be taken into consideration, he added.