The 2.2 Trillion Baht Borrowing Bill for the Government Infrastructure Project

The Government’s Infrastructure Project

The infrastructure project will be executed over the next seven years (2013 – 2020).  It is a large scale investment plan which is a crucial foundation of the Thai economy for increasing competitiveness, lowering production costs and creating new economic opportunities in the long run.  The plan features three basic strategies as follows: 1) Shifting cargo and passengers from the currently heavy reliance on ground transportation toward more transport via rail and water which is less costly.  This will include building new dual-track railways and ports; 2) Developing basic infrastructure and products/services that facilitate travel and transport via regional centres within Thailand and enhancing connectivity among neighbouring countries.  This will involve developing four high-speed train routes; 3) Improving Thailand’s transportation system and enhancing mobility.  This will include developing electric-powered trains to improve mass transit in urban areas and developing connectivity between centres for business and trade.

Transparency under the Borrowing Bill

The Borrowing Bill contains a number of provisions to ensure transparency.  For example, Cabinet approval for borrowing must be obtained at various stages and related agencies such as the National Economic and Social Development Board (NESDB), the Budget Bureau and the Finance Ministry will examine the appropriateness of the projects.  Standard reference prices will also be published for public access via the www.gprocurement.go.th website.

Furthermore, the provisions of the Public Debt Management Act B.E. 2548 (2005) will be applied mutatis mutandis as follows:

1. Prior to taking out loans: The issuance of debt instruments must be accompanied by announcement of prices, maturity periods and how the instruments are issued.

2. After taking out loans: Various information such as source, terms and conditions, currency, amount, exchange rate used to convert the currency to Thai Baht, interest rates, commission rates, costs and the purpose for taking the loans must be publicly disclosed .  Such information is to be

published in the Royal Gazette within 60 days after the loan was made.

3. Parliamentary Scrutiny: The Government must report to Parliament on the progress and its evaluation within 120 days after the end of the fiscal year.

Chronology of events

20 September 2013  

The House of Representatives passed the 2.2 Trillion Baht Borrowing Bill in its final reading and forwarded it to the Senate for further consideration.

20 November 2013   

- The Senate passed the Bill in its final reading

- The opposition party submitted a request for the Constitutional Court to consider whether the Bill contravened the Constitution.

To present date

Currently, the Bill is being considered by the Constitutional Court while the Prime Minister has yet to present it to the King for His assent.

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2 December 2013