ppp in thailand: plipolicy dl td evelopment & ch...
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PPP in Thailand: P li D l t & Ch llPolicy Development & Challenges (Enabling Finance for Private Finance of Infrastructure)
APEC Finance Ministers’ Process Workshop, The World Bank22‐23 June 2011
APEC Finance Ministers’ Process Workshop, The World Bank22‐23 June 2011
D S NDR. SEREE NONTHASOOT
Legal Counsel, State Enterprise Policy OfficeMinistry of Finance, Thailand
Current PPP FrameworkCurrent PPP FrameworkA single legislation called ‘Private Participation in State Undertakings Act’ in use since
1992ain rationale is to prevent corruption by transferring project approval to the Cabinet and create ex‐ante check and balance procedures, curbing discretion of the project agency
A
Project Agency
NESDB
Advisor
‘New’ Project
Feasibility Study
PP II
the project agency
Applicable on ‘big’ projects valued over 1 billion Baht Line Ministry
Cabinet
MOF Project with‘existing’ assets
Approve principle
PPROJECTROJECT IINITIATIONNITIATIONover 1 billion Baht
Broad scope of law covering all types of PPPs concession, licensing asset
Project Agency Selection Committee
• Approve TOR & draft contract
• Fix guarantee• Select party
Draft TOR & contract
Line MinistryPPARTYARTY SSELECTIONELECTION
licensing, asset lease)
Linear process with three steps: project initiation party
Cabinet AG OfficeScrutinise & approvecontract
Final Approval
• Monitor
yinitiation, party selection and projectmonitoring
Project AgencyMonitoring Committee
Sign Contract
• Monitor compliance
• Review amendment*PPROJECTROJECT MMONITONIToringoring
2Dr. Seree Nonthasoot (June 2011)
Issues & Drivers for ChangeIssues & Drivers for Change
No systematic planningfor PPP
Lack of clarity on project valuation Lengthy process (no time limit for
line ministry decision‐making) No provision for contract
amendment/renewal
PPP as an instrument for balanced budgetamendment/renewal
Non‐compatibility with PPP concept (no formal mechanism for risk allocation)
budget
Need to increase investments
Development of necessary
Small amount of provisions (25 sections) but numerous cases (over 100 requests for Council of S i i )
yeconomic infrastructure (especiallylogistics)
State opinions) Limited number of successful
projects/ unknown number of non‐PPSU projects
Agencies preferring conventional procurement procedures to PPSU process
3Dr. Seree Nonthasoot (June 2011)
Proposed New FrameworkProposed New Framework
Repeal the PPSU Act 1992 and enact a new PPP-conducive law
New bill contains 10 chapters, 65 sectionsp , Transitory provisions put in place to support
ongoing existing projects/contractsReplacing the PPSU Act
Establish a central PPP agencyP ti f PPP ‘M t Pl ’ Preparation of PPP ‘Master Plan’
Establish ‘Project Development Fund’ Criteria for contract amendment and renewal Requirement for project agencies to consider
PPP alternative and justify non-PPP optionAdding PPP‐Compatible Transparency measuresMeasures
Definitional structures Three-step procedures with
appropriate modifications
Incorporation of ‘established’ PPSU Measures
4Dr. Seree Nonthasoot (June 2011)
Challenges AheadChallenges AheadIntermediate
•Getting the new•Getting the new
Medium
•Establishment of•Establishment of
Long term
I l t tiI l t ti•Getting the new law passed
•Political/policy changes post July3rd election
•Getting the new law passed
•Political/policy changes post July3rd election
•Establishment of PPP Unit & Passing by‐laws
•Personnel sufficiency
• Hiring of advisors/
•Establishment of PPP Unit & Passing by‐laws
•Personnel sufficiency
• Hiring of advisors/
• Implementation• Social PPP (conventional focus on economic PPP/novelty of social PPP/
• Implementation• Social PPP (conventional focus on economic PPP/novelty of social PPP/
• Substantive changes by the Council of State & Parliament
• Substantive changes by the Council of State & Parliament
Hiring of advisors/ consultants
• Preparation of ‘PPP Master Plan’
• Preparation of by‐
Hiring of advisors/ consultants
• Preparation of ‘PPP Master Plan’
• Preparation of by‐
clarity of framework)
• Project selection
•Project Development Fund sufficiency/
clarity of framework)
• Project selection
•Project Development Fund sufficiency/
laws (drafting/ public hearings)
• Streamlining PPP process among relevant agencies
laws (drafting/ public hearings)
• Streamlining PPP process among relevant agencies
management
• Handling of contracts concluded under previous framework
management
• Handling of contracts concluded under previous frameworkrelevant agenciesrelevant agencies
Capacity‐building/PPP familiarization for Regulators (SEPO), Line Ministries, Project Agencies, Lawmakers
5Dr. Seree Nonthasoot (June 2011)
Inter‐agency/ International Cooperation & PPP Promotion