Voyageur Magazine - June 2013

Page 12

Business News

Thailand’s new Public-Private Partnership law: redesign or reincarnation?


ublic sector infrastructure development in Thailand has experienced periods of growth and stagnation. The government of Thailand now seeks to implement a new infrastructure initiative, in part through the passage of legislation relating to publicprivate-partnerships (PPP). PPPs represent a concerted effort to bring the efficiency of private enterprise together with public resources and oversight in order to streamline and major development projects and reduce their overall cost for taxpayers. Prominent examples of previous PPP projects in Thailand include the Bangkok Mass Transit System (BTS) and the Metropolitan Rapid Transit (MRT).

Lesson learned from past legislation

Until this year, forms and terms of publicprivate partnerships for public services or works had been governed by the Private Participation in State Undertaking Act B.E. 2535 (1992) (the Previous Act). Uncertainties deriving from lack of clarity and insufficient State support severely limited the effectiveness of the Previous Act and turned away many prospective private investors. For example, the Previous Act omitted clear monitoring techniques by state agencies of PPP projects, raising questions as to when the State should intervene or under what circumstances can the State unilaterally amend the terms of contract. Additionally, stipulations of contract renewal, termination,

and penalties for breach of contract were all largely unaddressed. At a time when the concept of publicprivate partnerships was a legislative innovation, Thailand appeared as a pioneer in a new mode of infrastructure and public services development. However, implementation of the theory proved difficult, as opaque arrangements fostered by legal ambiguity led to a lack of enforcement and rampant corruption.

Toward a new dynamic

The Private Joint Investment in State Undertaking Act B.E. 2556 (2013) (the Act) came into force on 4 April 2013 and has breathed new life into public-private infrastructure investments. The Act clarifies many of the previous inconsistencies and significantly shortens the feasibility study to the ground-breaking ceremony processing time from a minimum of two years to a mere 7-12 months. The Act also outlines numerous incentives and mechanisms of support for projects including the establishment of a public development fund and the framework for a five-year national PPP strategy. The new Committee of Private Investment in State Undertaking (the Committee) is empowered to act as the central agency responsible for all facets of PPP projects while ensuring compliance with fiscal discipline and adherence to provisions of appropriate risk allocation. Assessments by

a specially-assigned Supervision Committee in conjunction with professional consultants from the private sector will be conducted throughout the implementation process of each PPP project.


The Act paves the way for a fresh PPP dynamic in a context of growing tension between strong infrastructure needs and increasing concern for budgetary discipline. Announcements of new "Mega Projects" accompany concrete measures, adjusting legal and regulatory framework necessary for their development, which is encouraging to investors and financiers. In addition, the broadest conception of PPP as a method of public management could conceivably cover areas such as water and waste services, management of hospitals, and educational institutions. However, it is not yet certain that the Act allows for extension beyond “mega” sectors, as, absent specific exceptions, a 20 billion baht minimum investment is required for a project to be considered applicable to the public-private partnership legislation. Audray Souche/Kavita Pradoemkulchai/Matthew Christensen

Real Estate Woes in Yangon: tactics for staying savvy Continued from page 10

rented for USD$1200 – $1800 in Dagon or Botahtaung township, but attention needs to be paid to power access (and/ or generator). It never hurts to just peruse the Myanmar Times classifieds! For those on an NGO or SME budget, consider ‘shared office space’. Contact agents who are on the ground (like Stuart Deed – see contacts below) who may know others who want to share space. Or consider combined building concepts: office on one floor, staff housing on subsequent floors (or space that can be sublet to other expats). For the 1-person-show: the serviced office option may be just the ticket – whether a closed office or open desk, you will have the support you need not to waste precious time trying to figure out why the wi-fi isn’t working or the phones are down or a last minute meeting that needs a conference room. For those whose with no pockets to speak of: With the price of hotel rooms and office space, many people are opt-

12 Voyageur

ing to FIFO, especially with all the cheap daily airline specials (Page 13 of May 27th Myanmar Times has an ad for Golden Myanmar Airlines flights to Bangkok for $40 each way). Places like the Monument Bookshop off Dhamazedi Road (near the Savoy Hotel) offer free wi-fi in comfortable air-con environment (and serve tea, coffee, icecream and snacks) as do many other coffee shops and restaurants around Yangon. There are plenty of F&B outlets in the up-market hotels to hold meetings in and keep your eye on the market for a deal that suits. And lastly and perhaps most importantly – build your networks, both in real time and online. Join websites such as guide and forum/?fromgroups#!forum/yangon-expatconnection or consider running with the Hash House Harriers http://yangonhash. - and of course the derigueur: whiskey sours at the Strand on a Friday night.

About the Author: Christa Avery, a Canadian expat based in Bangkok, has been living and working in Southeast Asia for 18 years. Christa resided in Yangon during the 1990’s and maintains a strong local network of friends and associates there. Christa helps companies enter the Myanmar market, including enabling set up with local support/partners and engagement strategies. For more information contact: Other Myanmar Contacts: Tony Picon Associate Director, Colliers Myanmar Mobile: +95 (0) 9421034026 Stuart Deed Myanmar Real Estate

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