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Overview
Public–private partnerships (PPPs) were formally introduced into the Thai legal framework by the promulgation of the Private Participation in State Undertakings Act BE 2535 (1992) (PPSU Act). For two decades the PPSU Act served as the basic piece of legislation governing PPPs in Thailand; however, it lacked clear-cut criteria addressing matters of scope, duration and authority with regard to initiating and implementing PPPs. To clarify those criteria, the Private Investments in State Undertakings Act BE 2556 (2013) (PISU Act) was enacted. The PISU Act explicitly states that Thailand is in need of infrastructure construction and various other forms of public services, an imperative that is echoed in many other state policies, development goals and plans.
Consequently, PPPs became more common nationally as the government relied on PPPs as the main mechanism to develop the nation’s infrastructure. With the increase in the use of PPPs, it became apparent that the framework laid out by the PISU Act needed to be further developed. As a result, the Public–Private Partnership Act BE 2562 (2019) (New PPP Act) was enacted to replace the PPSU Act, thereby allowing PPPs to be conducted in Thailand in accordance with international standards.
The New PPP Act was passed by the National Legislative Assembly and became effective in March 2019. PPPs are now being implemented under the New PPP Act and in projects in connection with the Eastern Economic Corridor (EEC) of Thailand.
The year in review
The New PPP Act was written in such a way that a series of ancillary laws would ensue after its enactment. Subsequently, new laws were published in the form of notifications issued in 2020 and 2021 by the Public–Private Partnership Policy Committee (Committee) and the State Enterprise Policy Office (Office), and ministerial regulations. These notifications and regulations clarify some of the rules governing certain procedures in relation to PPPs. Several projects have recently been initiated under the New PPP Act: the Bang Pa-in–Nakhon Ratchasima Intercity Motorway (M6), the Bang Yai–Kanchanaburi Intercity Motorway (M81) and the Metropolitan Rapid Transit Orange Line have completed the private party selection process and are currently in the construction phase. The invitation to tender for the Kathu–Patong Expressway has been published. New rest areas projects on the Bang Khun Thian-Bang Bua Thong Intercity Motorway (M9) and the M81 Motorway have been approved by the Cabinet. The Committee has recently approved in principle the addition of Intercity Motorway M9 from Bang Khun Thian to Bang Bua Thong.2
The improvements to the New PPP Act are based on principles that reflect international standards and touch on the following points:
- business case guidelines drafted with the aim of ensuring fair risk sharing that does not overburden the state;
- full consideration of the possible and appropriate government support measures;
- transparent procurement procedures including negotiation; and
- increasing the bankability of projects.
These points have also been included in the Eastern Special Development Zone Act BE 2561 (2018) and a number of ancillary laws, as the government uses the EEC as a pilot model for PPP regulations. The EEC Office is in the process of finalising guidelines that reflect best practice standards.
To date, several EEC projects have been initiated and executed. These projects include the High-Speed Rail Link to three airports, connecting Rayong province and Bangkok metropolitan city (US$7.2 billion), the biggest PPP concession project in Thailand and the first concession granted on a high-speed train project, and U-Tapao International Airport, valued at approximately US$6.4 billion, Thailand’s first PPP airport project. The contract for Laem Chabang Port Phase III was signed in 2021; it is valued at approximately US$4.8 billion and is the largest PPP port project in terms of value. The total amount of investment for all of the projects in the EEC area will exceed 1.5 trillion baht.
Further, there are projects currently under way, such as Digital Park Thailand, which have been approved in principle by the Cabinet. The EEC Smart City project is in the feasibility study phase. The implementation periods for these projects will be considerably shorter in comparison to the implementation of projects under the PISU Act, and public sector involvement in the development of these projects is increasing as the EEC ancillary laws, as well as the ancillary laws under the New PPP Act, require the collection and analysis of private sector opinions acquired through market-sounding procedures.
