Two mass transit lines set to receive 40 billion baht

The military-installed government has announced that it is prepared to invest a maximum of 40 billion baht into the so-called Yellow and Pink mass transit lines which are scheduled to be up and running within the next four years.

The government will only invest a maximum of 20 billion baht in each of the two projects, which form part of what it calls the public-private partnership (PPP) scheme.

A special PPP committee has given the go-ahead to the Mass Rapid Transit Authority (MRTA) to implement the Pink Line, which will stretch 34.5 kilometres from Khae Rai to Min Buri and is expected to cost 56.7 billion baht to build as well as the Yellow Line, which will stretch 30 kilometres from Lat Phrao to Samrong and is costed out at 54.6 billion baht.

These will be the first PPP fast-track investment projects, and the Finance Ministry has noted that the approval process has been cut from the standard two years to just nine months.

Naturally, if the government is going to invest a maximum of 40 billion baht across the two projects, the remaining 71.3 billion baht will need to be raised from the private sector.

The government has said it’s monies will cover land expropriation costs and the necessary civil works for the two electrically-powered monorail lines.

This will allow the private sector to stump up the cash needed to finance the civil engineering projects, the rolling stock, install the operating systems and run the maintenance services under a 30-year concession.

The screening committee for the two projects is expected to be established in May and it will prepare the terms of reference and then open the bids for construction in June, with 2020 as the slated completion year for both lines.

Last November, the government put five projects forward for the PPP scheme, with the aim of having all five actually ready to go by the second half of this year.

The five projects include three mass-transit routes in Bangkok, with a combined value of 194 billion baht and two interprovincial motorways, worth around 140 billion baht.

One motorway will run from Bang Pa-in district in Ayutthaya province to Nakhon Ratchasima, while the second will stretch from Bang Yai district in Nonthaburi province to Kanchanaburi.

The government is hoping its use of public funds in so-called big-ticket infrastructure will help spur private investment and take the pressure of exports as the mainstay of economic growth.

Between 2000 and 2005, Thailand’s private investment grew by an average of nine percent per year, giving GDP growth of 5.3 percent per annum. From 2006 to 2014 private investment dropped to just two percent a year and this dragged down GPD growth to an average 3.4 percent per year.