Since passing its new public-private partnership (PPP) law in April, the government of Thailand has now reached the point of drafting the implementing guidelines for the Private Investment in State Undertaking Act. With 100 people working on getting the guidelines to the government's PPP committee, the Ministry of Finance is hopeful that the new law will be fully in force by October 1, according to an analyst at the Ministry of Finance.
With THB2 trillion (€50 billion; $64 billion) needed for infrastructure development over the next seven years, by government estimates, Thailand is working to make a solid PPP framework the centre of its infrastructure efforts, according to Winfried Wicklein, Asian Development Bank principal country economist for Thailand.
The last law governing PPPs in the Southeast Asian nation was enacted 20 years ago, and was considered outdated. In fact, the Ministry of Finance analyst admitted that there were virtually “no clear guidelines on the process of public-private partnerships”. With this new law, however, Thailand hopes to “bring its PPP programme up to international standards”, he said.
“The government is indeed committed to the new PPP framework – that much is obvious,” Wicklein added. “They want to get it right from the beginning.”
The Ministry of Finance analyst foresaw a few difficulties that could slow the approval process. The Ministry is beholden to the newly-created PPP committee in the country, and any number of things could delay their approval. In addition, the new law can only be tested by running through projects to troubleshoot the PPP process. So far, however, everything has been going smoothly, he insisted.
ADB has been asked to help the Ministry of Finance in its efforts, and since coming on board has been testing the viability of the legal frameworks proposed. Wicklein is hopeful that Thailand’s financing modality for PPP will become both more efficient and more transparent with this new law.
The government analyst added the private sector has been “very excited” about this new law, and said he hopes the clearer guidelines will draw more international and local investors. The trick, he said, will be to keep returns neither too high nor too low.
“We’ve seen a lot of momentum gearing up for implementation since the law was passed,” Wicklein told Infrastructure Investor.