STREAMLINED PROJECT APPROVALS

In an attempt to increase private sector participation and investment, a new PPP act was introduced by the Thai government in April 2013 (see Exhibit 25). The legislative changes are geared towards streamlining the project approval process through the PPP Policy Committee. It aims to reduce the average period to start construction after the announcement of the project from over two years to just under a year. Thailand's PPP strategic plan 2015-2019 encompasses a total of 66 projects valued at $40.5 billion with the lion's share of the budget (96 percent) being allocated across 29 transportation projects.63 The Thai government hopes to extend its PPP success in the power sector - where private sector participation has doubled to over 60 percent of electricity generation in the last fifteen years - to the transportation sector.61

Furthermore, the Thai cabinet has, in December 2015, rolled out an "Action Plan 2016" to accelerate 20 transportation projects of about $50 billion, of which five are categorized under the PPP fast track process to incentivize private sector participation.64 These five projects make up about a fifth of the budget for "Action Plan 2016": the development of Bangkok's Metropolitan Rapid Transit (MRT) Pink Line and MRT Yellow Line, the Blue Line extension, and two motorway projects (Bang Pa-In-Nakhon Rachasrima and Bangyai-Kanchanaburi). A year later, the cabinet further approved an infrastructure plan worth more than $25 billion that includes 36 infrastructure projects consisting of roads, rails, air transport and ports. It is expected that about 65 percent of these projects will be financed by debt, and the remaining through the government budget, PPPs, and the newly launched infrastructure fund.65

After the Asean Economic Community came into effect in 2015, the Thai government used its economic advantage as a central hub to boost government-to-government high speed railway development. The Thai and Chinese governments are in discussion over a high speed railway project, with some project estimates suggesting the total project cost to reach $16.1 billion.66 With the push for transport infrastructure, not only will there be significant growth potential, there will also be a reduction in logistics costs and congestion in Thailand.

EXHIBIT 25: THAILAND'S PRIVATE INVESTMENT IN STATE UNDERTAKING ACT (2013)

Source: APRC analysis, State Enterprise Policy Office (Ministry of Finance, Thailand), AustCham