The Finance Ministry is fast-tracking public-private partnership (PPP) projects, with total PPP investment expected to exceed 130 billion baht over the next three years.
According to Tibordee Wattanakul, director-general of the State Enterprise Policy Office (Sepo), 20 PPP projects have been approved out of 140 projects submitted to the PPP Committee for consideration.
The approved projects represent a combined investment value of around 300 billion baht. Investment in these projects will be rolled out gradually, he said, with around 20 billion baht expected to be invested this year, 40 billion next year and 73 billion in 2028.
Most of the investment is in transport infrastructure, including mass transit rail systems and expressways.
Mr Tibordee said accelerating PPP investment is a priority for Finance Minister Ekniti Nitithanprapas, who wants to speed up investment by using private-sector funding to supplement direct public investment, as the government’s fiscal capacity has become increasingly constrained.
Mr Tibordee said Mr Ekniti instructed Sepo to act as the government’s “chief financial officer” by monitoring PPP projects across ministries to track their progress and identify any issues requiring assistance.
While most PPP projects are concentrated in the transport sector, Mr Ekniti wants to expand the use of PPPs for social infrastructure projects.
One project under consideration is Thammasat University Hospital’s Proton Therapy Centre, which would offer proton beam therapy for the treatment of brain cancer. The project requires an investment of around 2 billion baht and is expected to generate relatively modest returns, but Mr Ekniti wants it to serve as Thailand’s pilot social PPP project.
Mr Tibordee said there is strong demand for proton beam therapy for brain cancer treatment. At Chulalongkorn Hospital, where the technology is already available, patients face wait times of up to three months for treatment.
Using PPPs as an investment mechanism helps address the government’s growing public debt constraints because PPP projects do not directly increase public debt, he said.
Local administrative organisations, including subdistrict administrative organisations and provincial administrative organisations, are increasingly adopting the PPP model for infrastructure projects such as water supply and electricity systems.
Under current regulations, local PPP projects valued at more than 500 million baht must receive approval from the PPP Committee. These projects must be commercially viable.
Mr Tibordee said projects offering returns of only 8-9% may be insufficient to attract private-sector investment, with returns of 10% or higher generally needed to draw private investors, who factor risk into their project calculations.
Sepo wants government agencies responsible for PPP projects to submit new proposals well before the expiry of existing concession agreements, he said.
In practice, agencies carrying out projects tend to submit PPP proposals only when existing contracts are nearing expiry, as they are concerned that submitting proposals too early could result in key project information becoming outdated. Project details, government policies and technological developments may change over time, potentially altering project costs and financial assumptions.
Under the PPP Act, agencies carrying out projects are required to submit PPP proposals to the PPP Committee for consideration at least five years before the expiry of the concession agreement.