Transport, water projects biggest challenge before junta

Economy June 16, 2014 00:00

By Sasithorn Ongdee
The Nation

3,013 Viewed

Massive investments in transport and water management projects as well as energy-price restructuring are still the toughest tasks awaiting the junta's consideration at Thursday's meeting to point which way the country should go as part of its economic r

Whether infrastructure projects should proceed with a huge investment of Bt3 trillion, which is even more than the Bt2-trillion infrastructure plan proposed by the Yingluck Shinawatra government that was capsized by the coup, will possibly become clear this week. 
After last week’s meeting of the Office of Transport and Traffic Policy and Planning, the agency is expected to propose its Bt3-trillion infrastructure plan focusing on transport projects – minus high-speed trains – to the National Council for Peace and Order (NCPO). The plan reportedly runs for eight years to 2022. 
Some industry observers said the plan should not cost Bt3 trillion as there are no high-speed trains, which represented a large chunk – Bt800 billion – of the previous Bt2-trillion package. 
A Bt4-billion module of the Bt350-billion water management project – a data centre for weather forecasting and disaster warnings – is high likely to be given first priority while the eight other modules might be put on hold. 
Last Thursday, the junta led by NCPO chief General Prayuth Chan-ocha ordered the water project scrapped and the projects reprioritised to reflect His Majesty the King’s economic sufficiency guidelines. 
The water project was initiated by the Yingluck government following the flood crisis in 2011. Elements of the project are reportedly perplexing and need to be scrutinised. 
K-Water Thailand, a subsidiary of the South Korea-based Water Resource Corporation, won the bid to build two projects worth Bt162 billion, including a Bt153-billion floodway. Italian-Thai Development won five projects worth Bt110 billion.
The reform of the energy price structure is one of the most challenging tasks the NCPO faces, as it bids to reflect the real cost of each fuel type as well as to ensure people have fair and equal access to energy. An outline of the plan for restructuring energy prices is under consideration by the junta. 
There is still some confusion as to whether the country has sufficient oil and gas sources to reduce the need for huge imports or to consume at cheap prices. After many groups of energy experts yesterday presented all their information to ACM Prajin Juntong, the NCPO’s deputy chief, the junta this week might have more information to consider in revising energy policies. 
Since the May 22 coup, the junta has taken steps to get the economy back on track including settling its debts to farmers, approving the Bt2.57 trillion fiscal 2015 budget, easing the cost of living and giving SMEs better access to liquidity. 
Many research houses have begun to upgrade their economic outlook for Thailand, compared to estimates of possible contraction. 
Of the 800,000 farmers who were owed Bt92 billion under the Yingluck government’s controversial rice-pledging scheme, more than a half have received their overdue payments.
The military has also moved to restore foreign confidence in the country by expediting the drafting of the fiscal 2015 budget in an attempt to have it ready for disbursement by October 1, the start of the fiscal year. It approved Bt2.6 trillion in spending and a budget deficit of Bt250 billion. 
It is also concerned about the burden on consumers, and capped the price for diesel at Bt29.99 a litre and for cooking oil at Bt22.63 a kilogram. There is also a price freeze on consumer products and meals in food courts. Recently, the retail diesel price was quoted at Bt29.85 a litre after being reduced last week by 14 satang. 
The junta has also turned its attention towards small- and medium-sized businesses, with the Thai Credit Guarantee Corporation ordered to keep more money in reserve to guarantee loans for SMEs.
After appointing new members to the Board of Investment, Prayuth, as chairman of the BoI, is expected to approve pending applications for investment projects worth more than Bt700 billion.