The lawyers of H&P have been always well known for our experience on civil construction and infrastructure projects, in Thailand but also outside of Thailand. This has been reflected in different engagements for EPC companies, numerous publications on construction magazines and our participation as speakers in different seminars on PPP in Asian countries such as Thailand, Philippines and Malaysia.
On this article we would like to reflect some comments on Public Private Partnership (PPP). PPP is a public-private joint investment undertaken by any means, or designation by way of a license or concession or grant of any kind of right between private entity, state enterprise and government agency, either singly or collectively, in order to initiate project related to infrastructures and public services undertake by state.
Under the current regulation the Thai government is eligible to appoint a private entity to conduct the project through a joint investment contract. One of the main principles of PPP include an appropriate allocation of project risks and interests of both parties and also fair competition between private investors who wish to participate.
Thailand has adopted a new Act concerning Public Private Partnership (PPP) called Private Investments in State Undertakings Act B.E. 2556 (2013). This regulation of 2013 replaced The Act on Private Participation in State Undertakings Act B.E. 2535 (1992). The new Act announced the definition of “project”, “state enterprise” and “government agency” which created a precise definition of the terms. The Act also elaborated “state undertaking” as an undertaking which requires the utilization of natural resources or properties of one or several government agencies, state enterprises or private sectors. In additional, specific details and conditions of PPP were prescribed in this Act giving more clear directions to its economy. With the new visions of the economy, Thai government will be able to improve and implement new Public Private Partnership projects later on.
On October 2017, the cabinet approved the draft Public Private Partnership Strategic Plan B.E. 2560 – 2564 (2017 – 2021). The project pipeline under this strategy plan consists of 66 projects which can be categorized into 2 main groups as follows:
-Projects which require private sector investment (Opt-out) for example, Development of Urban Rail Transit Lines projects, Development of Public Logistics Ports projects, Development of High-speed Rail Lines projects
-Projects which private sector should be encouraged to invest in (Opt-in) for example, Development of Intercity Toll Roads projects, Development of Public Education Institutions projects, Development of Public Health Infrastructure projects.
Due to the fact that Thai Government pays special attention and encourage Public Private Partnerships to grow, PPP reaches about 20 percent of infrastructure strategy plans of the whole country. However, Private Public Partnership only accounts for 2 percent of all investment, as a result of many possible reasons. One of the reasons would be the indistinct outcomes of previous projects, private sector’s trust in the government and the possibility of the law indicated too many requirements to comply with.
Over the next few years, Thailand is expecting to expedite the bidding of 44 mega-infrastructure projects worth THB 2 trillion. Public Private Partnership will be accountable for 75 percent of projects and another 10 percent is anticipated to arise from Thailand Future Fund (TFF), a consolidated fund founded by government for the purpose of getting fund raised by private sectors and retail investors. TFF will be the source of investment in order to finance infrastructure projects especially transportation infrastructure for the benefit of country’s development.
If you need legal assistance or talk with a lawyer in Thailand specialized on PPP and construction projects please contact us at [email protected]
