BANGKOK, Mar 17 – Thailand’s next government should invest in infrastructure development despite the demise of the previous administration’s Bt2.2 trillion budget for mega projects, a former central bank chief said today.
Pridiyathorn Devakula, former finance minister and Bank of Thailand governor, allayed investors’ concerns on the cancellation of the Bt2.2 trillion loan bill for infrastructure and transport mega projects and expressed confidence that the new government would pursue the mammoth scheme under normal budgeting procedures.
The Constitutional Court on March 12 ruled unanimously that the government’s Bt2.2 trillion loan bill is unconstitutional, reasoning that the whole drafting process and its essence is unlawful.
Mr Pridiyathorn called on the next government to prioritise significant projects such as the Pak Bara seaport, ten electric train routes, dual track train system and road expansion.
These projects will cost Bt1.22 trillion over six years and the government is entitled to create public debt at the maximum 20 per cent of annual budget, with the possibility of borrowing another 10 per cent of the budget if necessary, he said.
Such a budget allocation will be within the financial disciplinary framework setting the ceiling of public debt at 60 per cent of gross domestic product, he added.
Mr Pradiyathorn said unnecessary projects which should be suspended, for instance, the high-speed train between Bangkok and Chiang Mai which has been served by low-cost airlines.
Thailand needs high-powered locomotives, not high-speed train, to lower transportation cost, he said, easing the private sector’s fear of Thailand’s weakened competitiveness.
He said he believed the next government will speed up investments in essential transport systems.
Thailand urgently needs a fully-authorised government to run the country within the first six months of the year, or the country’s GDP will be badly affected, he said.