THAILAND – MEGA-PROJECTS

Thailand – Economic Cabinet assigns agencies to track progress of mega-projects

Prime Minister Abhisit Vejjajiva presided over the eighth meeting of the Economic Cabinet Committee. The summary of the meeting is as follows:

The meeting acknowledged the financial reports proposed by the Bank of Thailand. During the first five months of 2010, the growth rate was still positive regardless of the effects by the political unrest. Tourism was affected most: however, there were good signs of recovery in June. It is expected to return back to normal by the end of 2010. Consumption was slightly affected and is likely to expand due to strong factors regarding higher income of farmers, employment and increasing confidence of entrepreneurs and investors after the situation resolved. Coupled with measures initiated by the government to support private consumption such as the renewal of five living expenses reduction measures for six months, the five percent salary increase of state officials worth 3 million baht, and the campaign ‘Thai Teaw Thai’ which can be used as deductible expenses for 15,000 baht, the production and investment continued to expand. Nonetheless, there is a likelihood that Thailand may run the risk of facing the global economic downturn in the second half of the year owing to the fact that the short-term stimulus measures activated by various countries are about to end. The slow increase in inventory and debt crisis in Europe may result in Thailand’s decreased export. Even so, the financial sector continues to expand in relation to the recovery of the global economy. The overall performance of the financial sector is strong. Non-performing loans are not worrisome, rendering no difficulty in granting loans. Thus, there has been an increase in loans for 4 months. As for the outlook of higher inflation, it is still in control. Even with the rise of Thai baht which follows the trend of other currencies in the region, exportation will not be affected.The meeting acknowledged the investment report proposed by the Board of Investment. The investment projects receiving support in the first six months between January and June are worth 1.9 million baht.

The meeting also considered about the progress of mega-projects investment. It is approved that the progress in question is now under the preparation process and will later be submitted to the cabinet for consideration. Moreover, the meeting suggested that the importance be given to the public participation from the start so that it will be accepted by the people in the areas. Also, the progress should strictly follow the laws especially in important projects such as Suvarnabhumi Airport Development Project Phase 2. It is highly urged that the proposal should be submitted to the cabinet in order to facilitate passengers from 45 million/year to 60 million/year in 2010. It is expected that passengers will climb up from 40 million last year to 43 million this year. In addition, there are also constructions of dual track railways under the investment plan of the State Railway of Thailand according to the cabinet’s approval, Asian Connectivity, and the Bara Pier Project.

The meeting also assigned agencies to track the progress of the “Thailand : Investing from Strength to Strength” programme, one focus of which is on strengthening local districts through a project to promote healthcare in hospitals and medical excellence centres.