Language selection

Search

Infrastructure market in Thailand

Industry highlights

Can$870.3 million

Canadian exports to Thailand in 2021.

 

 

Thailand has long benefited from its strategic location at the heart of mainland Southeast Asia to drive its economic development.

The Thai government has recently initiated the Eastern Economic Corridor (EEC), building upon the success of the Eastern Seaboard.

This project follows a vision of creating a next-generation “growth area” to realize the “Thailand 4.0” strategy, which promotes sustainable economic growth based on the “New S-Curve” industries focused on research, innovation and the digital economy.

Key opportunities for Canadian infrastructure companies in Thailand

At the core of these infrastructure plans are three “flagship” infrastructure megaprojects:

  1. High-speed rail linking Bangkok’s international airports at Don Mueang and Suvarnabhumi with the emerging aerospace hub at U-Tapao International Airport. Construction by a consortium of Thai, Chinese and Japanese contractors will soon start. When completed by 2025, this will seamlessly link Bangkok with the future “Aerotropolis” at U-Tapao.
  2. Upgrading the Laem Cha Bang deep sea port (Phase 3) to handle cargo capacity of 18.1 million TEU a year using the automated system and advanced full-scale services.
  3. Development of the U-Tapao International Airport and its “Aerotropolis” promoting investments in aerospace and aviation-related industries. The Thai government has been in discussions with major international aerospace firms to develop aircraft maintenance and related facilities. This US$650 billion upgrade is being undertaken as a public-private partnership and will support the country’s vision of becoming an ASEAN technological, manufacturing and service hub with strong connectivity to its neighbors, the ASEAN region, and beyond.

Notable challenges for Canadian infrastructure companies in Thailand

Thailand business landscape

Thailand currently has in its pipeline a number of public-private partnership (P3) projects (which could be of interest to potential Canadian partners as well as suppliers of goods and services). Given a constrained government budget after the COVID-19 bailout package, P3s will now be an even more important framework to drive these projects.

To attract more foreign direct investment (FDI), the Thai government plans to expand and upgrade its major transportation and logistics facilities, which will support and attract investment opportunities for foreign companies.

Several international firms have profited from diversifying their investment portfolios by allocating some of their time and resources in P3 projects, and progressively more private investors are looking for new opportunities.

In as much as developing countries with a stable political outlook present a higher internal rate of return than those offered by mature economies, an increasing number of P3 projects are attracting foreign direct investment into Thailand.

As one of the most developed ASEAN member states and with an expanding economy, Thailand is reliant on its infrastructure development to maintain regional competitiveness. Many P3s, underpinned by a variety of project finance structures, have been executed in Thailand since the 1992 Act on Private Participation in State Undertaking B.E. 2535 (the PPSU Act). 

As the volume and size of P3 transactions gradually increased, a consequent upgrade of the legislative framework undergirding P3 investments, specifically formulated to attract foreign direct investment, was needed. 

Hence, the existing legislation was amended two decades later with the 2012 PPSU Act, which more thoroughly governs the rights and duties of the public and private sectors.

This year, Thailand’s P3 committee approved revising the public-private joint venture project for 2020-2027. From 92 projects in the pipeline worth a combined $36 billion, the revision reduced the number to 77 projects from nine ministries valued at $33 billion.

This updated plan, the P3 Project Delivery Plan 2020-2027, is an attempt to revive the struggling economy amid the pandemic. The plan will play a significant role in setting out a P3 policy framework, which creates clarification for both public and private sectors, including the prioritization of P3 projects.

The plan also helps draw the attention of private parties and attracts them to jointly invest in P3 projects. The plan can help reduce government budget/debt constraints and increase efficiency of public services provision by leveraging the know-how, capability, expertise and innovation of private parties.

Among the 77 projects, complete particulars of 27 projects worth $22.8 billion are known and 18 of the 27 are ranked as high-priority P3 projects. Four mega-infrastructure development projects, worth a combined $5.3 billion, will be developed this year under the P3 arrangement.

Four mega-infrastructure development projects are considered projects of high priority:

Summary

Thailand is an attractive market for infrastructure and the P3 sector because:

Thailand is committed to and actively working towards improving its infrastructure and is open to doing business with Canadian companies.

For more information on infrastructure in the Thailand market, please contact Ekasit.chunlakittiphan@international.gc.ca.

Date Modified: