Cabinet approves $50 billion for 20 infrastructure projects
In a bid to propel a higher level of growth and investment, the cabinet of Prime Minister Prayut Chan-o-cha approved action plans for 20 huge infrastructure projects to be built from 2015 to 2022 last week. Construction on several of the projects is expected to begin next year and economists believe they will provide an additional one percent to Thailand’s expected gross domestic product growth in 2016.
Aside from high-speed rail development, inter-province rail lines, new and improved motorways, port upgrades and airport expansions were among the projects that the Cabinet approved. Although Thailand already has some of the most extensive and well-developed infrastructure in the region, much of it was built decades ago and so is not as cutting edge and modern as some facilities built more recently in other countries. The only major infrastructure project completed during the last decade was Suvarnabhumi International Airport in Bangkok, which opened in 2006 but is already over capacity. Expanding Suvarnabhumi is one of the 20 projects that received approval.
Six of the 20 projects have already passed all necessary Cabinet received approvals and are ready to being their building phases. Minister of Transport Arkhom Termpittayapaisith said that bids on those projects would take place before the end of this year so that construction could begin as early as the first quarter of 2016. The combined cost of those six projects is $5.1 billion, he said.
The six projects are the second phase of expanding Suvarnabhumi airport, the one-meter-gauge double-track rail network linking Nakhon Ratchasima to Khon Kaen in the northeast; the Pattaya-Map Ta Phut motorway on the Eastern Seaboard; the Bang Pa-in-Saraburi-Nakhon Ratchasima motorway from central to northeastern Thailand; and the development of Laem Chabang deep-sea port and construction of container terminals at Laem Chabang, also on the Eastern Seaboard. The Eastern Seaboard is Thailand’s industrial heartland, home to clusters of industrial estates housing thousands of international manufacturers and exporters.
The remaining 14 projects should be open to bidding sometime next year, and construction on them should not start later than 2017, a government spokesman said.
The government intends to fund the project through three means: with $2.2 billion form the government’s fiscal budget, borrowings of $35 billion and public-private partnership (PPP) schemes worth $10.5 billion. The rest will come from other sources, the spokesman said.
Work is also set to begin next year on three mass transit rail projects in an around Bangkok worth $5.4 billion. Agreements were also recently signed for high-speed rail line development with the governments of China and Japan, and work on those are also expected to begin in 2016.