Cement & Steel: Mega Projects

The Thai government has implemented a strategy for developing the country’s infrastructure to support Thailand’s comparative advantages and to sustain growth. During the government budget period for 2005 - 2008, the government and state enterprises plan infrastructure projects totaling Bt2,702 trillion. Of this, mega projects total Bt1,508 trillion. At the October 19 cabinet meeting, the government passed a resolution to spend an additional Bt827bn over the next five years.  

According to the Fiscal Policy office and the Fiscal Policy research institute, there are two case studies of government and state enterprise Mega projects. The base case assumes that only part of the projects be invested. This will result in GDP growth of 5.7 - 5.9 per cent during the period 2005 - 2008. In case 2 with full mega project investment, the result is a GDP growth rate of 5.9 - 6.1 per cent.  

The national Economic and Social Development Board (NESDB) has estimated the damage to assets in the southern Tsunami are around Bt35,600m, while government and private spending on rehabilitation will be Bt30,000m and spending for new house replacements will be Bt1,600m.   If compared to spending for construction and building houses normally around Bt31,600mn, the Mega projects this year will be around Bt231,000 - 345,000m or a rather small portion. Spending on rehabilitation after the Tsunami will be just a smaller addition to Mega project needs.