Thursday, February 16, 2012

Floodway plan finished, Kittiratt says

Plans to construct a new floodway along eastern Bangkok channelling water from the Central Plains to the Gulf of Thailand are complete, Deputy Prime Minister Kittiratt Na-Ranong says.
Democrat Party and opposition leader Abhisit Vejjajiva and his colleagues leave the Constitution Court yesterday after attending the opening hearingonthe legality of two executive decrees issued by the government. The court will deliver its rulingonFeb22. THITI WANNAMONTHA
"The 350-billion-baht investment plan includes details on all of the infrastructure projects, including where new floodways will be built and where new catchment areas will be located," he said.
"Details cannot be announced yet. We need to build public understanding first. But for eastern Bangkok, the details are complete."
Mr Kittiratt, who is also finance minister, acknowledged that some details about a new floodway protecting western Bangkok along Thon Buri had yet to be finalised.
But he expressed confidence that new catchment areas around the capital would help ward off a repeat of last year's devastating floods, when large parts of Thon Buri were inundated as floodwater from Pathum Thani and Ayutthaya overwhelmed existing flood prevention systems.
Mr Kittiratt, and representatives of the opposition Democrat Party yesterday appeared before the Constitution Court to give testimony in a case questioning the legality of two emergency decrees issued last month by the government to help along its new investments in water management systems.
The decrees will authorise the government to borrow 350 billion baht to finance new investments and shift repayment responsibility for some 1.14 trillion baht in bailout debt from the 1997 economic crisis from the annual budget to the Financial Institutions Development Fund (FIDF).
The court is due to rule on the legality of the decrees on Feb 22.
The government says that if the decrees are ruled to be unconstitutional, it will resubmit the policies as parliamentary bills, which is likely to set back its plans by six to 12 months as it waits for final approval.
But the Democrat Party insists that neither decree satisfies the "urgent need" requirement as set under the constitution.
Korn Chatikavanij, a Democrat deputy leader and former finance minister, told the court that 68.4 billion baht in interest payments to cover the bailout debt had already been set aside in the 2012 budget, negating any urgent need for action to finance the debt.
Arguments by the government that the debt must be shifted from the budget to free up room for new borrowing were similarly specious, given the country's relatively low public debt level.
Mr Korn also argued that the FIDF debt transfer, which will be financed through new surcharges imposed on local banks, would effectively shift the payment burden to the public and also jeopardise an existing limited deposit insurance programme.
Commenting on the 350-billion-baht loan decree, Mr Korn said the issue was not the need to invest in flood prevention programmes, but rather the need to arrange urgent financing through an emergency decree even as details of the investment plans remained uncertain.
The government itself has acknowledged that investment projects will take two to four years to complete, which shows that funds could be easily managed through the normal budget process or a special act.
"If the government is able to proceed with
[the 350-billion-baht borrowing] decree, it will open a loophole for future governments to do the same while escaping parliamentary scrutiny and rendering ineffective the very duty of the legislative branch," Mr Korn said.
Mr Korn wanted three more petitioners to testify, but his request was turned down by the court.
It said the testimony given at the hearing had provided sufficient information.
Mr Kittiratt said the severity of the 2011 floods, estimated to have cost the country over 1.4 trillion baht, made urgent action necessary to revive the economy and lift investor confidence.
He expressed confidence the decrees were in line with the constitution. Action plans for the flood management projects would be ready this year, as soon as the financing plans are complete.
Democrat leader Abhisit Vejjajiva said the government should implement the borrowing and investment programmes through parliament, and insisted the decrees were unnecessary to protect the country's economic security.