• 
• 

Published on September 15, 2007

The government has decided to invest in the Purple Line metro to speed up implementation of the long-delayed project considered a crucial tool to boost the economy.

Finance Minister Chalongphob Sussangkarn said yesterday that to push through investment in the Purple Line rail route, the ministries of finance and transport, as well as the National Economic and Social Development Board had agreed to separate the investments in the rail system and the rolling stock.

"The government will proceed with the investment in the rail system. We're asking for the Cabinet's approval within a month," Chalongphob said at the annual seminar by the National Economic and Social Advisory Committee in Pattaya.

Meanwhile, Deputy Transport Minister Sansern Wongcha-um yesterday insisted that despite delays, a number of local and foreign investors are still interested in bidding for the mass-transit projects.

"The projects are still on and they show progress, though not in line with the original schedules. There are some obstacles in the details which need to be addressed," Sansern said.

A source at the ministry said that investors interested in the bidding include Italian-Thai Development, Ch Karnchang, Sino-Thai Engineering and Construction, Tokyo Construc-tion, China Railway and China State Construction Engineering.

The Cabinet, in November last year, approved investments in five rail routes, which will have a combined length of 118 kilometres and require a total investment of Bt165.4 billion. The Purple Line, from Bang Sue to Bang Yai, is one of the routes approved. The Thaksin administration originally approved investing in 10 lines.

The project has been long delayed despite calls from the private sector, which wanted the government to spearhead spending to boost the sagging economy. The Thai Chamber of Commerce, while reporting that the consumer-confidence index in August dropped to a 65-month low, said the investment would be crucial to lifting economic sentiment in the fourth quarter now that export growth has slackened.

Chalongphob agreed.

"In light of lower export growth, the government must take charge of investment to boost the economy. I think the next government also needs to follow this line while having to maintain some populist policies to take care of the poor," he said.

Chalongphob said the decision to split the investment into two parts would speed up the spending. The delays were due to uncertainties concerning the arrangements for joint public and private investment. The uncertainties have also resulted in delay in loan approval by the Japan Bank for International Cooperation (JBIC).

He noted that if JBIC cannot approve the loans for such investments in time, the Finance Ministry will tap domestic funds as state and private banks are ready to lend due to ample liquidity in the market. The domestic interest rates are also low, he said.

"I understand that there could be delays in JBIC's loan approval as Japan's prime minister has resigned and JBIC is also undergoing restructuring. Still, we want to tap a loan from JBIC," he said.

Earlier, the Energy Ministry proposed channelling funds under the Oil Fund's supervision to finance the rail construction.

Energy Deputy Permanent Secretary Kurujit Nakornthap said the decision to go ahead with the project is based on the fact that mass-transit systems would reduce energy consumption. Traffic jams contribute to low energy efficiency, as commuters lack alternative means of transport and stick to their personal vehicles.

The Thai Chamber of Commerce's energy committee chairman Sanan Angubolkul supported the decision, saying that with these funds, the mass-transit investment would be kicked off and energy imports would eventually decline.

Wichit Chaitrong

 Watcharapong Thongrung

 The Nation