The COVID-19 pandemic has been a significant factor hindering the growth of Thailand's economy this year, with the Bank of Thailand (BOT) estimating that GDP will decline by as much as 8.1%, the largest drop on record, even worse than during the Tom Yum Kung crisis, as the main engines driving the economy have been severely damaged.

Particularly affected are the export and tourism sectors, which heavily rely on foreign income. The outbreak forced the government to take drastic measures, announcing a lockdown that closed the country, resulting in significant impacts on international trade and travel.

Meanwhile, domestic consumption has also slumped due to the economic situation, with purchasing power shrinking. Citizens have tightened their belts and become more cautious with spending, as many have faced salary cuts, reduced overtime, and allowances, with some even losing their jobs, leading to hundreds of thousands of unemployed individuals.

In such a crisis, the private sector must remain vigilant as the situation is still unstable. Various investments may need to be postponed, leaving hopes pinned on government spending to help stabilize the economy through investments in large mega-projects that will create jobs and generate income for the public.

Although many projects have been delayed due to the disbursement of the 2020 budget, which was pushed back by five months from October 2019 to late February 2020, and then further complicated by COVID-19, there is now hope that as the pandemic begins to ease, the government will shift into high gear to push forward stalled investment projects in the second half of the year to stimulate the economy.

 

The first project to kick off is the Orange Line Electric Train, Western Section, from the Cultural Center to Min Buri, valued at over 140 billion baht, which opened for bidding last July. It has received an excellent response, with 10 private companies expressing interest in competing, as it is a major route running through the city center, connecting the eastern and western sides of Bangkok, with connections to all existing electric train lines. The Mass Rapid Transit Authority of Thailand (MRTA) will accept bids on September 23, and it is confident that results will be announced and contracts signed by the end of this year.

This looks set to be a showdown between two major investment groups: Bangkok Expressway and Metro Public Company Limited (BEM), along with its parent company, Ch. Karnchang Public Company Limited (CK), which currently holds the concession for the Blue and Purple Line subway systems.

On the other side is BTS Group Holdings Public Company Limited (BTS), which holds the concession for the Green, Pink, and Yellow lines, expected to partner with its construction ally, Sino-Thai Engineering and Construction Public Company Limited (STEC), and Ratch Group Public Company Limited (RATCH).

Both groups have clearly stated their readiness to compete fiercely. Recently, on August 6, CK held a shareholders' meeting where CEO “Pailiw Triwisetwet” announced that they are fully prepared to move forward with new bids expected to emerge in the second half of the year as the COVID situation improves, which will help boost their backlog from 38.5 billion baht.

Meanwhile, BTS has announced its commitment to invest in infrastructure projects across the board, including rail, land, air, and water systems, after recently securing a major project at U-Tapao Airport and the Eastern Aviation City. This year’s projects include the Orange Line Western section for which they have already purchased bidding documents. Additionally, they are interested in bidding for the Nakhon Pathom-Cha-am motorway project valued at 76 billion baht, having previously secured O&M contracts for the Bang Pa-in-Korat and Bang Yai-Kanchanaburi motorways.

Ultimately, it remains to be seen how many new bidding projects the government will roll out. However, from the private sector's perspective, there is confidence that more new projects will emerge, as government investment appears to be the only hope to help stabilize the Thai economy amid the economic storm.

SOURCE : www.bangkokbiznews.com/news/detail/892599?utm_source=slide_recentnews&utm_medium=internal_referral