Thailand Future Fund launches with money for highways
The $2.8 billion Thailand Future Fund officially began disbursing money for infrastructure investments last week with a $280 million grant to the Department of Highways to begin construction on three thoroughfares linking Bangkok with nearby industrial areas, as Cambodia said it will keep its agreement with Thailand and complete an important rail link with the Kingdom by the end of the year to boost trade and tourism.
The Thailand Future Fund is an investment instrument approved by the Cabinet last December and designed to raise money from the private sector to financially support the government’s infrastructure-building program. The fund has garnered significant domestic institutional investment. It supports only a small fraction of the price tag, however, of the infrastructure the government intends to build, which has been estimated at over $60 billion. The rest of the funding is coming from a variety of government and private sector sources.
Director-general of the State Enterprise Policy Office(SEPO) Ekniti Nitithanprapas said the first tranche of seed money will be used for three highway projects, the Bangkok-Rayong motorway, the outer ring road linking Ayutthaya and Pattaya, and an expressway linking Rama III Road-Dao Kanong-Kanchanaphisek Road (the western outer ring road).
Rayong and Pattaya are part of the Eastern Seaboard that is the industrial heartland of the Kingdom, and Ayutthaya is also home to a large number of industrial estates. The road will increase the connectivity and logistic links between the two areas, and the western outer ring road connects those areas and the capital Bangkok with highways leading to the southern isthmus and western provinces.
SEPO has estimated that 50 percent of toll revenues for the Bangkok-Rayong motorway and Ayutthaya-Pattaya road would be $1.1 billion over the next 30 years, with half the revenues used for returns on investment and the other half for maintenance.
The infrastructure building and upgrade program involves high-speed and double-track rail lines, highways, improved and expanded airports and deep-sea ports. Although Thailand has long been known as having some of the best-developed infrastructure in Southeast Asia, much of that infrastructure is now aging or has been surpassed by newer technologies. In addition, competing economies in the region have also been investing in building their own infrastructure, spurring Thailand to stay a step ahead.
In addition, the building and upgrading of infrastructure is expected to serve as a strong economic stimulus at a time when exports, the main engine of the Thai economy, are facing a challenging environment because of a weak global economy.
Meanwhile, Cambodia’s Public Works and Transport Minister Sun Chanthol told local papers there that Cambodia will keep its pledge to the Thai government and complete a short rail line linking the Cambodian town of Poipet with the eastern Thai province of Aranyaprathet by the end of this year.
Roughly 70 percent of the trade between the two countries passes through Poipet, according to the Royal Thai Embassy in Cambodia.
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