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Thailand’s new PPP

On January 31 2013, Thailand's House of Representatives approved a new act intended to facilitate private investment with public sector projects. The Act Governing Private Sector Participation in or Operation of State Activitieswill supersede 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 refusing to play a significant role and substantial delays and increased costs in the project approval, with no clear definition of what constitutes a state-owned enterprise. In addition, the old act does not provide for contract renewals or amendments or the scope of discretion for project approval.

The new act, which still requires royal approval, 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, 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.

Another notable change is the creation the Committee on Policy Participation in Investment in State Activities. This Committee, comprising of high level government officials, will be responsible for approving project submissions, deciding on the use of the tendering method of selection, ruling on disputes in regards to the enforcement of the act and drafting notifications, reports and the strategic plan. As this committee steps into the central role for approving new projects, as opposed to the Cabinet, decreased waiting periods for such approvals are also anticipated.

Although several provisions still require clarification, legal practitioners are optimistic, in that the changes contained in this new act represent an improvement to Thailand's public/private joint venture law.

A T Chandler and Zachary Lee

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