Thailand: Strategic plan for PPPs

Author: | Published: 24 Aug 2015
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Chandler MHM Ltd


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In April 2013, the Act Governing Private Sector Participation in the Operation of State Activities (2013) was published. The Act supersedes the 1992 version, which presented several issues for parties wishing to enter joint investment contracts with state-owned enterprises. These issues include an unclear and overlapping authority of several government regulators, with the NESDB (National Economic and Social Development Board) refusing to play a significant role; and, substantial delays and increased costs in project approval, with no clear definition of what constitutes a state-owned enterprise. In addition, the old Act did not provide for contract renewals or amendments or the scope of discretion for project approval.

The new Act generally follows the same pattern set out in the 1992 Act, such as project submission, implementation, and supervision and follow-up, but clarifies the roles of the project-owning agency and the responsible ministry. It reduces the involvement of the NESDB, and calls for the creation of a strategic plan on which project approval decisions must be based. It also includes processes for amending and renewing contracts.

The new framework, according to the Ministry of Finance, provides for: (i) a public-private partnership (PPP) Master Plan; (ii) the establishment of a PPP policy committee to define the PPP Master Plan, approve project submissions, decide on the use of the tendering method of selection, rule on disputes, and draft notifications, reports and a strategic plan, and a secretariat to operate as the policy advisory body to the committee; (iii) streamlined procedures, with clearer time frames; (iv) standard contract terms and guidelines on post-contract management of projects; (v) the inclusion of details and rigorous project calculations; (vi) a project development fund aimed at providing seed money for PPP feasibility studies; and, (vii) the Strategic Plan, which was finally announced on June 10 2015.

14 notifications have been issued under the Act between June 26 2013 and June 10 2015. Of particular interest are notification 9 (standard provisions of the investment participation contract) dated January 30 2015; notification 10 (characteristics of amendment to the investment participation contract) dated February 11 2015; and notification 14 (Strategic Plan) dated June 10 2015.

As of August 20 2015, no PPP project has been finally approved under the new Act, but 67 projects are in progress.

The State Enterprise Policy Office of the Ministry of Finance is responsible for the administration of the new Act.

Albert T Chandler