Govt to develop assets around mass-transit routes, will allow joint development with private sector
The Finance Ministry plans to develop the government's assets around existing and new mass-transit routes to create value for the land, and will open up the way for the private sector to co-develop the transport projects, Finance Minister Kittiratt Na-Ranong said yesterday.
He also told the "Property Outlook 2013" seminar that there was currently no sign of a bubble developing in the property sector and that he believed the market would continue to grow strongly, given robust demand as evidenced by the number of new residential projects being launched.
In line with the official policy to create value in government assets owned through the Treasury Department and by state-owned enterprises, the administration will develop only the infrastructure and land and plans to open up mass-transit projects for joint development by the private sector, he said.
One example of the government's programme is the plan to move Bang Kwang Central Prison to a new, more environmentally friendly site on Ngarmwongwan Road when the MTR's Red Line from Bang Sue to Rangsit is complete. Also, the Fish Marketing Organisation is in an area of Charoenkrung Road that could be developed as a tourist destination, said Kittiratt, who is also a deputy prime minister.
Such moves will enable the administration to develop state assets with a view to generating value and income for the public coffers in the long term, he said.
The government will also consider purchasing some foreign assets on which Thai embassies are located, and which entail high rental costs, provided that buying the property is cheaper than renting it, he said.
Meanwhile, he believes the Cabinet will approve the Bt2.27-trillion master plan that includes development of the mass-transit system and the national transport network within the next two weeks. The House of Representatives will then be able to consider the empowering legislation before April 19, he said.
The mega-investment will change the face of the property sector, with an expansion of investment from Bangkok to the provinces and connecting with other Asean countries, he added.
Songtham Pinto, director of the Macro-Economy Division of the Bank of Thailand, said the central bank remained concerned about two factors that would have impacts on both the economy and the property sector: the global economic situation and the country's household debt, which has risen to 73 per cent of gross domestic product.
The debt figure only covers that in the system, and does not take into account what is owed outside of the financial system, he said.
If household debt increased to 85 per cent of GDP, it would be a sign of a potential bubble in the market, which is why the central bank has to focus closely on the debt issue and take any measures deemed necessary to keep it under control, he said.
However, he told the seminar that the property market currently still appeared to be functioning normally.
The Real Estate Information Centre's director-general, Samma Kitsin, said the property sector now faced two main problems: a labour shortage and high land prices.
Both factors result in rising construction costs, which have caused residential prices to increase every year since 2008, he said.