Massive loan bill completed
Logistics strategies revised; PM vows transparencyThe Bt2-trillion infrastructure borrowing bill - which will allow the government to raise the entire amount by end-2020 and require it to clear the debt in 50 years - is now ready for parliamentary screening.
In the draft bill, approved by the Cabinet yesterday, the investment amount remains unchanged but the budgets allocated under three national logistics strategies have been slightly revised. Transport Minister Chadchart Sittipunt said in a document to Cabinet the revision followed screenings and opinions from related parties, after scrutiny of the projects.
"Revisions [of the draft approved by Cabinet on February 27] were made in consultation with the Finance Ministry, the National Economic and Social Development Board and the Budget Bureau," he said.
Prime Minister Yingluck Shinawatra said most of the loans would be obtained from domestic sources, adding that the Finance Ministry - entirely in charge of the borrowing - would work out the loan conditions in detail. She was not specific on the portion of domestic funding.
The borrowing bill has been heavily criticised by academics, economists and opposition politicians, who expressed worries over public debt. Despite the Public Debt Management Office's hint that the borrowing could raise the country's public debt to 60 per cent of gross domestic product (GDP), the government said in the bill that the ratio would not exceed 50 per cent.
Yingluck insisted yesterday she could fully defend the projects, specifications, and the bill itself during parliamentary scrutiny, and ensured the public about the transparency of these projects.
It is stated in the bill that within 120 days of the end of each fiscal year, the Cabinet would reveal the latest status of the investment and project evaluation to Parliament.
Democrat Party spokesman Chavanond Intarakomalyasut yesterday said many conditions associated with the bill were suspicious, like the repayment clause. He also criticised Finance Minister Kittiratt Na-Ranong's statement that corruption and cheating were possibly associated with the bill. "That's unacceptable," Chavanond said.
A poll by Bangkok University, conducted on March 13-18, showed only 25 per cent of 60 economists preferred the borrowing law to conventional financing. Another 22 per cent indicated they had no worries on the public debt issue, saying the current debt ratio remains low and that investment would create jobs and enhance the country's competitiveness.
Yet, while nearly 90 per cent support the investment as a way to boost competitiveness, 57 per cent said the borrowing law could entail associated problems - increase in public debt, as well as corruption. Some 88 per cent showed low or zero confidence in the government's ability to curb corruption on the projects - while 48 per cent also believed this scheme would see more corruption than other schemes.
Under the bill, the Finance Ministry plans to start repaying the loans in the 11th year. In years 11-20, 10 per cent of the borrowing would be repaid; 20 per cent would be paid in the next 10 years; 30 per cent in the following 10 years; and 40 per cent in the final 10 years.
The bill requires all ministries involved to seek opinions from the NESDB, the Budget Bureau and the Finance Ministry for their projects, before seeking Cabinet approval. They are also required to submit regular updates on the projects.