Cabinet approves infrastructure investment plan
The Cabinet today approved the long-awaited infrastructure investment plan, which will entail total investment of Bt2 trillion throughout a 7-year period.
Set to be kicked off this year after the borrowing law is enacted, the investment is set to reduce the company’s logistics costs as well as distribute growth to other parts of the country, according to the government’s paper.
Ultimately, these projects are expected to improve linkages between Thailand and its Asean neighbours, reduce logistics costs, deal with growing traffic congestion, and boost tourism revenue.
Out of 144 economies, Thailand’s infrastructure is ranked the 46th in the World Economic Forum’s Global Competitiveness Report 2012-2013. In the sub-category, while road quality is ranked the 39th, railroad quality is the 65th. In this category, electricity and telephone usage are included.
The investment is revised downward from Bt2.27 trillion.
Due to an increase in fixed expenditure, Thailand in the past two decades had little left to finance infrastructure projects.
Infrastructure Investment Plan
- During 2013-2020, Thailand will invest Bt2 trillion in infrastructure projects under 3 key strategies.
Strategy Amount (Bt bn)
1. Modal shift & multimodal/310
1. Logistics cost to GDP to fall by 2 percentage points
2. Real GDP expansion by 1 percentage point a year
3. Creation of 500,000 jobs
4. Current account deficit of 1 percentage point a year to GDP
5. Higher inflation by 0.16 percentage point a year
6. Public debt will peak at 50% of GDP
Meanwhile, the Cabinet also approved the State Railway of Thailand’s borrowing of Bt58.97 billion for the 2013 fiscal year.
Deputy Government Spokesman Pakdiharn Himathongkham said that of total, Bt12 billion would finance the construction of railroads - the Red Line and the coastal rail in Chachoengsao. Parts of the fund will be used to improve Airport Rail Link terminals and finance the purchase of new locomotives and passenger and cargo carriages.