Published on June 27, 2005

Many of the government’s high-profile investment projects are being hurriedly reviewed as the Thaksin administration struggles to speed up domestic spending and curb surging imports.

Under review are the purchase of aircraft for Thai Airways International, the Bangkok Fashion project and waste-water treatment plans.

“The government wants to speed up investments worth about Bt300 billion,” Finance Minister Somkid Jatusripitak said yesterday. “Ministers and senior officials have been asked to report on the implementation of their plans to the Cabinet on July 5.”

Somkid was speaking after Prime Minister Thaksin Shinawatra called a special Cabinet meeting yesterday. He is reported to be trying desperately to hold on to economic growth of at least 5 per cent this year amid a rapid slowing of the economy and a deteriorating trade balance.

Thaksin believes that if the government and state enterprises can speed up spending, economic growth will get a boost.

As of last week, the government was not spending fast enough. It had spent only Bt141 billion, or 54.8 per cent of its planned capital expenditure for the current fiscal year. The rest –Bt116 billion – remains idle, and the end of the fiscal year is only three months away, on September 30.

As well, state enterprises still have Bt240 billion in their pockets, although the deadline for spending it, for most of them, is December 31.

Somkid said the Natural Resources and Environment Ministry had indicated that it might suspend planned investments worth about Bt3 billion because it could not spend the money before the September 30 deadline.

Similarly, there are reports that the Transport Ministry may have to hand back about Bt1 billion because it is unlikely to meet its Bt40 billion target for investment spending before the end of September.

Meanwhile, the president of Thai Airways International, Kanok Abhiradee, said plans to purchase five commercial aircraft for the airline would be reviewed because the government wanted to slow import growth.

Kanok said the national carrier was planning to buy the planes in December.

Thailand has suffered trade and current account deficits in the first five months of this years due mainly to high oil prices and rising imports of raw materials and capital goods.

The government wants to slow imports to lessen the threat of a large current account deficit.

The permanent secretary for the Industry Ministry, Chakramon Phasukavanich, said he would negotiate with contractors involved in the Bangkok’s Fashion project in an effort to speed it up. It involved expenditure of Bt400 million.

He said money that was not spent in the course of the fiscal year would be reallocated to emergency projects, such as supplying water to the Eastern Seaboard, where major industries were facing severe water shortages.

Wichit Chaitrong

The Nation

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