The government is confident parliament will pass its 2-trillion-baht infrastructure loan bill. But the ride might not be quite as smooth as its lawmakers hope.
A group of senators and Democrat MPs have petitioned the Constitution Court to block a bill which the government needs to pass into law if the infrastructure projects are to go ahead.
They have asked the court to overturn the controversial Public-Private Partnership Bill, which is currently awaiting royal endorsement.
If the court rules in their favour, the government would have far greater difficulty pushing through the infrastructure loan bill.
That bill will be considered in parliament Thursday and Friday. The government and opposition MPs will have 25 hours to debate the issue.
According to procedure, the bill will be accepted for its first reading tomorrow. A House committee will be set up to work on the details before submitting it for its second and third readings, which will take place in May after the budget bill is passed.
Korn Chatikavanij, deputy leader of the Democrat Party and a former finance minister, says the loan bill might violate Section 169 of the constitution.
This stipulates that the use of state money must be in line with financial legislation, which comprises the four laws of budget expenditure, state budgeting, budget transfer and treasury reserves.
In addition, the loan bill could also violate Section 170, which says all transactions involving funds handled directly by a ministry, rather than through the state coffers, must be fully detailed under the financial requirements of the charter.
In the same vein, Bangkok MP Atthawit Suwannapakdi said the proposed 2-trillion-baht loan is four times the size of the International Monetary Fund loans agreed during the Chavalit Yongchaiyudh administration. The government says it will take 50 years to repay the loan.
The Finance Ministry has argued the lengthy repayment term is no cause for concern as public debt will not exceed 50% of GDP. Many economists disagree, however, arguing the public debt will not only exceed the safety level, but it will also prevent Thailand from being able to seek more loans in the future.
The opposition knows full well that the bill will sail comfortably through parliament, thanks to the number of MPs and senators who support the government. And so they have turned to the court in a last-ditch bid to derail it.
MP Somchai Sawaengkarn supports the move, saying the execution of the borrowing bill must be backed by the public-private joint venture investment law. He hopes the court will agree with the argument that the Public-Private Partnership Bill is unconstitutional.
At present, the private sector is prohibited from holding more than a 49% share in any public infrastructure investment deals. The bill, however, will raise that cap to 51%. Such a move would pave the way for more private ownership and reduce the government's decision-making powers.
"The Constitution Court has never ruled against financial laws because they are considered part of the executive powers. But anything can happen," Mr Somchai said. "If the joint investment bill is unconstitutional, it cannot be implemented."
If that is the case, the government will face a major legal hurdle, which will delay the execution of the loans.
"We have to try every which way to stop this loan," Mr Somchai said. "If not, the younger generations will blame us for failing to protect the national interest and for leaving them a heavy debt burden."
The government remains unperturbed, however, saying Thailand needs an infrastructure overhaul to be competitive and prepare itself for the Asean Economic Community. While it presses ahead with the loan bill to support its infrastructure projects, both supporters and opponents are waiting on tenterhooks for the court's ruling.
Nattaya Chetchotiros is Assistant News Editor, Bangkok Post.
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Source: http://www.news.thethailandlinks.com/2013/03/29/democrats-plot-to-thwart-loan-bill-passage/
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