Infrastructure Outlook Still In Flux
BMI View: Recent developments in Thailand support our long-held view that a change in regime could lead to a review of infrastructure projects approved by the previous incumbent. This review has already resulted in major delays and revisions to the country's infrastructure plans, and could further limit the country's infrastructure growth potential.
Recent developments in Thailand support our long-held view that a change in regime could lead to a review of infrastructure projects approved by the previous incumbent ( see 'Political Crisis Weighing On Infrastructure', April 15 2014). A change in government typically results in new feasibility studies and financial schemes being conducted and crafted respectively, which could lead to project delays, revisions, or worse, cancellations.
Such a scenario has already taken place in Thailand. A coup by Thai military leaders in late-May resulted in a military junta being installed to run the country, with the junta announcing in June that it would review all of the country's infrastructure programmes made by the former Pheu Thai Party (PTP) government to ensure their transparency, cost-effectiveness and necessity (cited from the Bangkok Post). This was reiterated on June 22, when the military junta ordered state-owned companies to seek its approval before undertaking any project worth more than THB100mn (USD3.1mn).
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