by His Excellency Kulkumut Singhara Na Ayudhaya
Ambassador of Thailand to the Philippines
at the 19th Visayas Area Business Conference
on ?Public ? Private Partnership towards Sustainable Development?
on 25 June 2010, at Sinulog Grand Ballroom, City Sport Club, Cebu
Philippine Chamber of Commerce and Industry,
Area Vice President for the Visayas, Mr. Francis O. Monera,
Mayor of Cebu City, Honourable Tomas R. Osmena,
PCCI Chairman Emeritus, Mr. Sergio Ortis-Luis, Jr.,
Honourary Trade Representative of the Ministry of Commerce of Thailand and Former PCCI Area Vice President for the Visayas, Mr. Jose T. Ng,
President of Cebu Chamber of Commerce and Industry, Consul Samuel L. Choison,
Ladies and Gentlemen,
First of all, I would like to express my sincere appreciation to the Philippine Chamber of Commerce and Industry (PCCI) and Cebu Chamber of Commerce and Industry (CCCI) for inviting me to deliver the keynote address. I would also like to commend the excellent efforts of the PCCI and CCCI in organizing today conference on the Public-Private-Partnership towards? Sustainable Development.
The Royal Thai Government, in fact, shares the idea that the Public Private Partnership or PPP is increasingly important as an efficient measure to utilize the private sector?s managerial capability and innovation on the government?s projects. Moreover, the PPP can provide high quality services at the least cost to the users, and also bring about the long-term development to the country. And thus makes it a sustainable and economically effective mean to the country?s development. Therefore, cultivating the perception of PPP alongside sustainable development has became one of the most important measures to make the economy a more competitive and dynamic one.
In Thailand, PPP is considered as an alternative to the conventional form of procurement methods, especially in the high-cost and large-scale infrastructure projects. One of the main reasons is that PPP could help alleviate burdens on government?s balance sheet. Since early 1990?s, the government has been utilizing this method in a number of projects and in several sectors with rising success. To name just a few:
the procurement of power and electricity generation ?
the mass transit networks
the toll roads and expressway in suburban area of Bangkok
the telecom sector
the operations of deep sea ports in Bangkok and Eastern Seaboard
the water and sanitation supply in the rural areas
Ladies and Gentlemen,
Today, it is my pleasure to share with you Thailand?s experience and best-practices with the PPP in the power and electricity sector.
In order to procure power and electricity from private power producers, the Electric Generating Authority of Thailand or EGAT, the state enterprise in charge of electricity generation, has carried out the program called Independent Power Producers. Under the Independent Power Producers, the EGAT procured power in the form of the Build Own Operate (BOO) basis, meaning that private producers construct the facilities, and become the sole owner of the assets without having to transfer the assets to the government at the end of the contract life. The producers operate and produce power in association with the agreement with the EGAT. The payment is output based and is made under the Power Purchasing Agreement (PPA).
This Independent Power Producers projects have been very well executed by the EGAT and considered as one of the most successful PPP projects in Thailand. The key to success was essentially driven by the efficient allocation of risk between EGAT and the Independent Power Producers and by the well organized payment structure, providing the right incentives for Independent Power Producers to meet their obligations and deliver high quality power to the public. Hence, this allowed the EGAT to deliver high quality power by enhancing competition among the power producers.
At the moment, a new round of Independent Power Producers? bidding is being launched and attracted a large number of interested bidders, both local and foreign ones. With this success and win-win situation of producers and consumers, the EGAT is expected to continue with its current PPP scheme which also includes other smaller production such as Small Power Producers and Very Small Power Producers.
The EGAT case has well showed that the PPP is an effective method to successful large-scale public services, and thus makes it a way forward to the country?s sustainable economic development. This is the reason why the Royal Thai Government has determined to ensure that a more amicable administrative, a legal system and an enabling environment for the success of the future PPP projects.
Ladies and gentlemen,
Let me take this opportunity to share with you the role and responsibility of the Royal Thai Government to the involvement of the private sector in the country?s economic and political development.
On the economic aspect, it can be said that the private sector in Thailand is maturely strong and play an impressive role in the country?s economic development. Having considered the role of private sector as a driving force for the economy, the Royal Thai Government has set up various mechanisms, in order to engage the private sector in the joint effort to stimulate the country?s economic policy. For example, in 2008, the government has set up the Joint Public-Private Sector Committee, which is composed of all economic Ministers as well as the private sector representatives from major institutions, such as the Thai Chamber of Commerce, the Thai Federation of Industries, the Banker?s Association of Thailand and the Board of Trade and the BOI. The committee is chaired by the Prime Minister himself and has convened regularly to discuss and propose measures to address trade and investment difficulties as well as to sustainably stimulate the country?s economic growth.
The consistent collaboration between public and private sectors in formulating Thailand?s economic policy has been a key factor to the country?s strong economic fundamentals. As we can see that, despite the global economic crisis that severely hit many economies over the last year, Thai economy has successfully recovered with the impressive economic growth of 12 percent in the first quarter of 2010, the highest growth in Thailand in fifteen year. And the index of the Stock Exchange of Thailand has increased by 5.04 percent over the last three months and increased by 12.36 percent over the last 6 month. Moreover, the economic recovery and growth are certainly very broad-based with the export growth at 32 percent and tourism growth at 30 percent. We also witnessed the household consumption expenditure growth of 4 percent, private consumption growth at 15.8 percent and manufacturing production expanding by 22.8 percent. This year we anticipate that auto manufacturing will increase to its highest level in 50 years, affirming Thailand?s current ranking as the 13th largest auto manufacturing country in the world. On the investment front, investment applications for the BOI promotion that were received during the first 5 months of this year had increased by 7.3 percent in value, and nearly 50 percent in terms of the number of projects.
Ladies and Gentlemen,
Moreover, while certain risks remain in the economy internationally and domestically, various agencies have estimated the annual economic growth of the country at 4.5 to 5.5 percent. However, the government is confident that, with the strong economic fundamentals and sustainable government investment, the country?s economic growth will reach at 6 percent, with the GDP maintaining at 300 billion US dollars and GDP per capita at 4,433.6 US dollars per year.
It can be said that private sector participation has always been encouraged by the Government for decades, not only in times of development, but also in times of crisis, especially the political one. As one of the main actors in Thai society, the private sector usually take part in the Country?s legal and political reform. The recent political crisis has portrayed this well.? In order to address the on-going political challenges in Thailand, the Prime Minister announced a reconciliation plan as part of a reconciliation process. The Plan consists of 5 elements which includes;
First, to unite Thai People in joint efforts to protect and uphold the country?s principal institutions and unifying force, namely the monarchy. Especially, to protect the monarchy from being drawn into the present conflict.
Second, to resolve fundamental problems of disparity and social and economic inequality, which are seen as the root cause of the conflict, by promoting equal opportunity with regard to education, health care and employment.
Third, to promote a constructive role of the media, especially to ensure that the media is not misused to create conflict and hatred, thereby leading to violence.
Fourth, to set up an independent fact-finding committee to establish facts about violent incidents and to seek out the truth and justice for the society.
Fifth, to establish mutually acceptable political rules for all parties, thereby a mechanism to solicit views from all sides is set up. This is an attempt to sustainable resolve the present conflict as well as to prevent the possible future conflict.
The government has emphasized that the success of this proposed reconciliation plan cannot be achieved unilaterally by the Government and require constructive participations by all actors and stakeholders. To rebuild the confidence in the economy, the private sector was invited to fully take part since the very beginning of the process. And so far, their reaction has been very proactive. Many private sector organizations, namely the Thai Federation of Industries, the Bankers? Association of Thailand and the Board of Trade of Thailand, have already pledged their support for the plan and have even drawn up some of their own activities and initiatives that they can take to support the plan as well as to stimulate the country?s economy and tourism.
On the tourism side, with the assurance from the Prime Minister to resolve the political situation nationwide, a tourists-friendly environment has been restored in the country. The quick return to normalcy has made Thailand once again a safe and pleasant tourist destination, in terms of quality and value-for-money. Recently, Thailand is voted as the world's second best-value destination by the Lonely Planet's 'Best in Travel 2010' guide, and Bangkok is voted as the ninth best nightlife city in the world by the users of the popular travel advice website, tripadvisor.com. These achievements reflect not only the success of the government promotional measures, but also an active participation by the private sector, especially by equipping Thai tourist sector with a wide range of accommodations and services.
To build on this quality, the Thai authorities has implement various measures, such as the free travel insurance for foreign tourists and the waiver of tourist visa fees. The private tour operators and hotels throughout the country also join this effort by offering various promotional packages. The Government is certain that, with the integrated efforts of all government agencies and the full engagement of the private sectors and other related stakeholders, Thai tourism will flourish once more.
Ladies and gentlemen,
With the consistent and constructive participation by the private sector, the fundamentals of the Thai economy have always been very strong. Despite various challenges, Thai economy remains very competitive and is getting even better. Recently, we received high recommendations for low cost of living, overall tax burden and also for the good infrastructure. The Airport Rail-Link will soon be opened and the Skytrain Network is continuing to expand. The major investments in transport and communications network, roads, rails, and so on, are in pipeline for the next five years.?? ?
Ladies and gentlemen,
Today, it is truly my pleasure to be here and have the opportunity to learn that our neighboring country, the Philippines, also has such an active private sector.
Last but not the least, on behalf of the Royal Thai Embassy and Team Thailand in the Philippines, I would like to affirm our commitment to work closely with all of you to promote trade and any kind of cooperation, such as food security, cultural cooperation and better understanding between?? the Thai and Philippine communities.
On this occasion, I wish the 19th Visayas Area Business Conference on ?Public ? Private Partnership towards Sustainable Development? every success and fruitful event.