1. Project Funding For Infrastructure Development in Bangkok
Infrastructure Development in Thailand: The Way Forward
Sun Vithespongse
Deputy Director-General
Public Debt Management Office (PDMO)
MINISTRY OF FINANCE
January 31, 2007, Shangri-La Hotel

2. PI/GDP projected to be around
Public Sector Investments %
Billion Baht
Ongoing
205
218
258
Planned
Megaprojects
Crisis
PI/GDP 11.6%
PI/GDP projected to be around
6-8% in 07-09
This diagram gives you the overall picture of public sector investments between and should assure you of Thailand’s capability of investing in Megaprojects in the next 4-5 years. Let me start at the crisis year in 1997, total public investments was at around 550 billion baht as indicate by the blue area. Due to the aftermath of the crisis, public sector investments decreased as a result of government resources being diverted to the rehabilitation of other sectors of the economy, in particular the financial sector. In the next five years however, public sector investments will increase significantly and will peak at nearly 800 billion baht due to the aforementioned megaprojects plus the ongoing megaprojects (projects that were large enough to be classified as mega but were implemented before 2005). In addition, we have made the assumption that other projects are worth around 200 million baht annually over the next five years. The red curve shows the public sector investments as a percentage of GDP, you can see that it peaked in 1997 at nearly 12% in comparison to less than 10 percent during Megaprojects years
Other Investments =200 BNTHB
P=Preliminary
E=Estimates
Source: BOT, PDMO

3. Financing of Megaprojects
Borrowing
External
Domestic (Bond market)
Securitisation
Public-Private Partnership (PPP)

4. External/ Public Debt % Public Debt/GDP: 41 % FX Reserves: 62 US$ BN
External Debt: 58 US$ BN
Source: BOT, PDMO

5. Financing Strategy For Mass Transit
Basic Infrastructures (Civil works/ Depots/ Stations/ Tracks)
Financed by the Government
International Competitive Bidding (ICB)
Rolling Stocks/ Signaling/ E&M
Encourage private participation in the form of Public-Private Partnership (PPP)

6. Financing Strategy For Mass Transit (Cont.)
Financing Sources
Unit: Billion Baht
Lines
Budget
JBIC
Domestic Loans
PPP
TOTAL
1. SRT, MRTA
- Blue
11.3
33.9
17.2
73.6
- Purple
4.9
20.6
6.9
13.4
45.7
- Red
3.8
30.2
19.9 -
54.0
20.0
84.7
38.1
30.5
173.3
2. BMA
External Loans
- Light Green
1.4
13.5
7.3
22.2
- Dark Green
1.6
13.2
7.9
22.6
3.0 27
15.2
44.8
TOTAL (1+2)
23.0
149.4
218.1

7. Financing Strategy For Mass Transit (Cont.)
Unit: Billion Baht
Civil Works
Rolling Stock
Blue
52.5
17.2
Purple
29.2
13.4
Red*
44.2
9.8
Light Green
14.9
7.3
Dark Green
14.7
7.8
 TOTAL
165.4
45.5
Civil Works : Government – Budget (16%), Loans (84%)
Rolling Stocks : PPP
Remarks: * Government plans to finance both civil works and rolling stocks for the Red line

8. Issues of Concerns Bond Market Development
Market size : 4,085 Billion Baht (50% of GDP) at the end of
2006
Total trading value : 6,955 Billion Baht in 2006
2nd Domestic Bond Market Development Plan
Primary market development : benchmark bonds issuance
Secondary market development
Market infrastructure development : securitisation promotion

9. Issues of Concerns (Cont.)
Public-Private Partnership
Process/ Arrangement
Enabling Environment
Instruments/ Supporting Methodologies
Institutions to Coordinate & Oversee PPP activities

10. Issues of Concerns (Cont.)
Securitisation
Waived SPV income tax
Eliminating related problems such as legal framework and accounting standard
Can be used to lower borrowing costs of the PPP projects

11. THANK YOU