Investment drawdown estimate drops to 70%

Previous goal of 87% viewed as unrealistic

State agencies are expected to draw down just 70% of this fiscal year’s annual investment budget, well below the target of 87%, says the head of the Comptroller-General’s Department.

“The investment budget disbursement target of 87% for this fiscal year is relatively high,” said director-general Suttirat Rattanachot. “The disbursement rate has never hit 80%, with 70% the record high.”

For October to May, a mere 37.1% of the annual investment budget was taken out, but the ratio will rise to 63.9% if the value of the signed contracts is taken into account, Ms Suttirat said.

But even that 63.9% ratio would still be lower than the 66% achieved over the same period last year, she said.

The government has an annual spending target of 2.9 trillion baht, of which 577 billion is for investment in fiscal 2018.

Public investment has been a mainstay for economic growth in recent years amid still-tepid domestic consumption and private investment.

The private sector recently raised concerns that the stricter Government Procurement and Supplies Management Act, effective from last August, would delay public investment, as many provincial governors could baulk at signing contracts.

Ms Suttirat said the law, effective from last August, was not an obstacle for budget disbursement despite the private sector’s concerns. Rather, a new regulation that requires civil engineers or architects to certify construction work has stalled projects for local administrative organisations.

Regarding Finance Minister Apisak Tantivorawong’s order to lower reference prices used in bidding, she said the Comptroller-General’s Department will try to reach a conclusion this month.

Mr Apisak recently said the department should consider lowering reference prices to better reflect market value after auctions over the past few years saw winning bids averaging 17-18% below benchmark levels.

Ms Suttirat said some components for reference prices will be revised, but not the overall prices.

PATIPAT JANTHONG An official carries out an inspection at Thung Song Hong station, part of the Red Line electric rail system owned by the State Railway of Thailand. The private sector has raised concerns about the pace of public investment.