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The Experience of Thailand with PPP Projects Financing
Financing Sources for Public-Private Partnerships (PPPs) 25 November 2015
State Enterprise Policy Office (SEPO) Ministry of Finance
State Enterprise Policy Office, Ministry of Finance, Thailand
227 237 208
174 210
293
227 223
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180 184 209
138
214
438
371 403
304
2007 2008 2009 2010 2011 2012 2013 2014 2015
Gov't Agency Investment SOE Investment
The Need of Infrastructure Investment in Thailand
Global Competitiveness
Index THA SIN HKG KOR TWN MAS
GCI 31 2 7 26 14 20 Roads 50 6 7 18 12 19 Railroad 74 N/A 3 10 7 12 Port 54 2 4 27 25 19 Air Transport 37 1 3 31 36 19 Financial Market Development
34 2 1 80 18 37
Source: The Global Competitiveness Report 2014-2015
Infrastructure Investment will boost the competitiveness of the country
Total Infrastructure Investment in only Transport Sector approx. 1.91 trillion baht (2015 – 2023)
Government Budget for Investment
SOE Investment
Vs
Billion Baht
Source: State Enterprise Policy Office, Thailand (2015) Bureau of the Budget, Thailand (2015) The Comptroller General’s Department, Thailand (2015) 2
State Enterprise Policy Office, Ministry of Finance, Thailand
Infrastructure Financing in Thailand
Sources and Limitations
Sources Limitations
Budget Limited to 20% of annual budget or 400,000 MB annually
SOE’s Income
SOE’s Income does not meet its rapid demand of infrastructure investment
Borrowing/Bond/ Debenture
National Debt should not exceed the fiscal sustainability level at 60% of GDP to ensure stability and credibility
SOE Public Offering/ Privatization
Needs mature Industry structure and public understanding
PPP Alternative source for infrastructure investment and increases private participation but may be restricted in certain subsectors
Infrastructure Fund Another solution to invest sustainably despite higher cost of capital and more complexity compared to plain debt financing
Fiscal Sustainability Level
44.9% 48.3%
51.0% 52.5% 53.2% 52.8% 51.8%
7.1% 7.4% 9.1% 9.8% 10.3% 10.5% 10.5%
5.0% 5.1% 6.1% 6.8% 7.3% 7.5% 7.5%
0%
10%
20%
30%
40%
50%
60%
2015 2016 2017 2018 2019 2020 2021
Public Debt/GDP
Interest Payment/GDP
Principle Payment/GDP
Source: Public Debt Management Office, Thailand (2015)
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State Enterprise Policy Office, Ministry of Finance, Thailand
Criteria for Financing Decision
High Financially Viable : SOEs
Expressway Airport Electricity Energy
SOE Revenue/ Borrowing
Project Finance
PPPs Infrastructure
Fund
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State Enterprise Policy Office, Ministry of Finance, Thailand
Criteria for Financing Decision
Low Financially Viable with High Economic Return : Government
Rapid Transit System Public Health Road System Education
Budget Government Borrowing
PPPs Gov’t Subsidy Co-investment
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State Enterprise Policy Office, Ministry of Finance, Thailand
PPP Experience in Transportation Sector
20 transportation projects have been delivered under PPP scheme
Road
• The Second Stage Expressway System and its Extension (Expressway Authority of Thailand )
Railroad
• The MRTA Initial System Project Chaloem Ratchamongkhon Line (Metropolitan Rapid Transit Authority)
• The Ladkrabang Inland Container Depot (State Railway of Thailand)
Water Transport
• The Container Terminal B5 at Laem Chabang Port (Deep-Sea Port) (Port Authority of Thailand)
Air Transport
• The Ground Equipment and Maintenance Facility at Suvarnabhumi Airport
• The Aviation Fuel Pipelines with Hydrant System Project (Airports of Thailand Plc.)
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State Enterprise Policy Office, Ministry of Finance, Thailand
Financing Source/Sector
Metropolitan Mass Transit
Provincial Rail Network
Highways /Motorway
Water Transport
Air Transport
Annual Budget Land acquisition
Consultants
Land acquisition
Consultants
Land acquisition
Consultants
Land acquisition Consultants Construction
Government Borrowing
Civil Works
Civil Works Signaling
System
Civil Works
Civil Works (Large Projects)
SOE Revenue & Borrowing
Rolling Stock Signaling
System Rolling Stock
Equipment and tools
Consultants Civil Works Equipment and
tools PPPs Civil Works
Fee collection system
Maintenance
Infrastructure Funds
Rolling Stock
Rolling Stock
Tentative Financing Sources
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PPP Strategic Plan 2015 - 2019 (2558 – 2562 B.E.)
Education, Public Health
and Science, Technology
and Innovation (4.58%) 19 projects, 72.2 Billion Baht
Project Pipeline (66 Projects)
Water Treatment and Irrigation System (3.90%) 11 projects, 61.4 Billion Baht
Require private sector
investment (Opt-out)
Type of Subsectors Estimated Investment Cost
Approximately
1.41 Trillion Baht
Connectivity and Dependency among Subsectors
• Between projects within the same subsector
• Between projects within subsectors under the same higher level sectors
• Between projects within subsectors under different higher level sectors
Urban Rail Transit System, 44.22%
Toll Roads in Urban Areas
0.93%
Intercity Toll
Roads 26.49%
Logistics Depots 1.64%
High Speed Rail 17.02%
Logistics Ports 9.63%
Common Ticketing System 0.07%
1. Urban Mass Transit System
2. Toll Roads in Urban Areas
3. Logistics Ports
4. High Speed Rail System
5. Telecommunication Network 6. Broadband Internet
Group 2 Encourages participation
and investment from
private sector (Opt-in)
1. Intercity Toll Roads
2. Logistics Depots
3. Common Ticketing System
4. Airport Services
5. Water Treatment Management
6. Irrigation System
7. Waste Management
8. Education Infrastructure
9. Hospitals and Public Healthcare Services
10. Medical Supplies and Equipment
11 Science and Technology Infrastructure
12. Infrastructure related to Digital Economy
13. Convention Centers
14. Accommodations for handicap, elderly,
and poor people
Telecommunication (4.28%)
5 projects, 67.6 Billion Baht
Convention Center (0.17%)
1 project, 2.7 Billion Baht
Accommodations for
handicap, elderly,
and poor people
1 project, N/A Baht
Transportation (874.07%)
29 projects, 1.37 Trillion Baht
Intercity
Urban Areas
Main Purpose : “being the gov’t direction for types of public investments which private participation during 5 years (2015-2019)”
Group 1
Estimated Investment Cost
1.58 Trillion Baht
As of 24 Sep, 2015 8
State Enterprise Policy Office, Ministry of Finance, Thailand
33.2%
5.0% 20.7%
11.6%
29.5%
28.6%
8.9%
16.1%
46.5%
SponsorInsuranceForeignOther companiesRetail
33.3%
8.4% 42.7%
15.7%
New Financing Sources : Infrastructure Fund
BTSGIF ABPIF
TRUEIF
~ 62,510 MB ~ 6,300 MB
~ 58,080 MB
25%
21%
15%
39%
EGATIF
~ 21,480 MB
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