MAHANAKORN PARTNERS GROUP

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OverviewoftheThailandPublic-PrivatePartnershipActB.E.2562(2019)(PPPAct)

Chapter1–GeneralTermsThePublic-PrivatePartnershipAct(PPPAct)cameintoforceonMarch11,2019,governingPPPprojectsexceedingavalueofTHB5billion,asoutlined inSection8of theAct,andcertainprojects thatmeetprescribedcriteriathatarevaluedatlessthanTHB5billion.Section7itemizes12categoriesofinfrastructureprojectsandpublicservices,namely:

§ Roads,highways,specialwaysandland-transportation;§ Trains,electrictrainsandotherrail-transportation;§ Airportsandair-transportation;§ Portsandwater-transportation;§ Watermanagement,irrigation,waterworksandwastewatertreatment;§ Energyworks;§ Telecommunicationsandgeneralcommunications;§ Hospitalsandpublichealth;§ Schoolsandeducation;§ Housingandfacilitiesforlowormediumwageearners,theelderly,underprivilegedordisabled;§ Exhibitioncentersandconferencecenters;and§ OtherprojectsastobeannouncedbyRoyalDecree.

ThePPPActisbaseduponfourfoundationalprinciples,acronymizedas‘F.A.S.T.’:

§ Facilitation – the Act aims at facilitating domestic investment by having applicant-friendlyproceduresandaddingmoreincentives.

§ Alignment–PPPprojectsinThailandmustalignwithinternationalstandardsandbestpractices.§ Streamline – the Act aims to simplify and curtail processes, with more flexibility including

enhancementofcollaborationbetweentheprojectstakeholders.§ Transparency–PPPprojectsunderthisActshallbetransparentandeachstepoftheprocesses

canbescrutinizedthoroughly.

ThePPPActsubdividesPrivateParticipationinInfrastructure(PPI),definedasJointInvestmentProjects,intotwocategories,basedontheproject’srequiredinvestmentamount:Section8–Projectsexceedingfive(5)BillionThaiBahtJointinvestmentprojectswhosevalueexceedsTHB5billionareregulatedbytherules,proceduresandconditionsspecifiedinthePPPAct.ThecriteriaandmethodsforcalculatingthevalueofJointInvestmentProjectsshallbeprescribedbythePublic-PrivatePartnershipPolicyCommittee(theCommittee)whosefunctionsareoutlinedinSection20.Section13stipulatesthattheCommitteeconsistsof:

1. PrimeMinister(ChairmanoftheBoard)2. MinisterofFinance(ViceChairmanoftheBoard)


MPG OverviewofthePPPActB.E.2562,Page2of5


3. PermanentSecretaryoftheMinistryofFinance4. BudgetBureauChief5. Secretary-GeneraloftheCouncilofState6. Secretary-GeneralNationalEconomicandSocialDevelopmentBoard7. SecretaryGeneraloftheThailandBoardofInvestment(BOI)8. AttorneyGeneral9. ChairmanoftheThaiChamberofCommerce10. ChairmanoftheFederationofThaiIndustries(FTI)11. ChairmanoftheThaiBankersAssociation12. Five(5)Professorswhoareappointedbythecabinet

Section9–Projectsnotexceedingfive(5)BillionThaiBahtJointInvestmentProjectsvaluedatnotmorethanTHB5billionareregulatedbytherulesandproceduresspecifiedbytheCommittee.Nevertheless,wheretheCommitteedeemsaJointInvestmentProjectvaluedat less than 5 billion baht to be an “important project”, or a project that is aligned with the JointInvestmentProjectPlanning,asoutlinedinSection12,theCommitteecandirecttheProjectOwner(i.e.thePublicPartnerinthePPParrangement1)toproceedwiththeprojectaccordingtotherules,proceduresandconditionsprescribedintheAct.Once the set of rules and procedures has been determined, the responsible government sector shallprovideafeasibilitystudyandaprojectanalysisreporttotheCommitteeandtheCabinetfortheirfurtherconsideration. If both governing bodies grant their approval, the responsible government entity shallinitiatetheprocessofselectingthePrivatePartneraccordingly.Normally,theabovementionedprocessmaytakeupto25months;however,suchtimelinecouldbeeffectivelyshortenedbytheCommitteeonacase-by-casebasis.Chapter2–JointInvestmentProjectPlanSection12:TheStateEnterprisePolicyOffice (SEPO) is responsible for formulatinga Joint InvestmentProjectPlan,inalignmentwiththemasterplanforthedevelopmentofinfrastructure,fortheeconomicand social development of the Kingdom, prepared by theOffice of theNational Economic and SocialDevelopmentCouncil.SEPOwillthensubmitthePlantotheCommitteeforapproval.OncethePlanhasbeen approved by the Committee, it shall be disseminated through the SEPO’s information networksystem.Thus,thestateagencyshallproceedwithsuchPlanfortheJointInvestmentProject.Chapter3–Public-PrivatePartnershipPolicyCommitteeSection 20 clarifies the duties and responsibilities of the Public-Private Partnership Policy Committee,including:

i. Providing opinions to the Minister of Finance, prior to the enactment of Royal Decrees orMinisterialRegulations;

ii. EvaluatingandapprovingplansfortheimplementationofJointInvestmentProjects;

1ProjectOwner(Thai:หน่วยงานเจา้ของโครงการ)referstotheGovernmentagencythatwillpartnerwiththeprivatesectorinthePPPproject.




iii. DeterminingthecriteriaandproceduresforthepreparationandexecutionofJointInvestmentProjectsvaluedunderTHB5billion;

iv. ApprovingtherevisionofJointInvestmentcontracts;andv. Advisingonhowtosolve issuesandproposebest-casetimelinesofprojects totheCabinet, in

ordertoexecuteprojectsinlinewiththePPPAct.

Chapter4–PreparationandImplementationofProjectPart1:ProjectProposalWhile formulating a Joint Investment Project, the ProjectOwner shall prepare a feasibility study andprojectanalysisreportthatincludeallofthedetailsrequiredbytheCommittee.Tothisend,theProjectOwnershallengageaconsultanttojointlypreparethereport.TheProjectOwnershallsubmittheJointInvestmentProjectproposal,togetherwiththefeasibilitystudyandanalysisreport(overview),totheresponsibleMinisteraswellastheCommittee,forconsiderationandapproval.Onceapproved,theresponsibleMinisterwillproposetheJointInvestmentProjectproposaltotheCabinetforapprovalandaction.Part2:SelectionofPrivatePartyTheselectionofthePrivatePartyshallbemadebycompetitivebidding,unlesstheCabinethasapprovedotherselectionmethods,whichareoutlinedinSection25andSection34.Anunsolicitedproposalcanbeacceptedifboththefollowingconditionsoccur:

§ ThefeasibilitystudyandprojectanalysisdemonstratethatcompetitivebiddingisnotasuitablemethodforselectionofthePrivatePartner(Section25);hencetheProjectOwnermustelaborateon:theneedforaspecificpublicasset,itsadvantagesanddisadvantages,andthebenefitsthatthegeneralpublicandsocietywillderivefromthepublicasset.

§ BothProjectOwnerandCommitteeagreeonnotutilizingcompetitivebidding(Section34).

TheProjectOwnerpreparesthedraftinvitationtotender,draftdocumentforselectionofPrivatePartneranddraftPPPcontract,andpresentsthemtoaSelectionCommitteeforapproval(Section35).UponCabinetapprovalofthePPPProject,theProjectOwneragencywillappointa‘SelectionCommittee’(Section36),consistingof:

§ RepresentativeoftheProjectOwner(ChairmanofCommittee)§ Representativeoftheresponsibleministry(MemberofCommittee)§ RepresentativeofAttorneyGeneral(MemberofCommittee)§ RepresentativeofSEPO2(MemberofCommittee)§ Two(2)ExpertswhoarespecialistsinthatPPPProject(MemberofCommittee)

2ThePPPActreferstothePPPUnitoftheStateEnterprisePolicyOffice(SEPO).




§ Representativeoftheprojectowneragency(MemberofCommittee&Secretary)

UponSelectionCommitteeapprovalofthedraftoftheinvitation,thedraftdocumentsforPrivatePartyselection,andthedraftofPPPprojectagreement;theProjectOwnerandtheSelectionCommitteethenproceedwiththeselectionofthePrivateParty(Section39).IntheeventthatthereisonlyonePrivatePartysubmittingabid—orseveralbidsaresubmittedbutonlyonefitsthecriteriafortheselectionofthePrivateParty—theawardcanbemadeinaccordancewiththePPPAct,iftheSelectionCommitteeconsiderstheprojecttobebeneficialforthecommunity(Section40).UpontheawardbeingmadeandadraftPPPcontractbeingnegotiatedwiththePrivateParty,theProjectOwner submits the draft contract to the Office of the Attorney-General for review (Section 41).Furthermore,theProjectOwnersubmitstheaforementioneddocumentstotheresponsibleMinisterand,finally,theCabinet.UponCabinetapproval,theProjectOwnerisabletoenterintothePPPcontractwiththeselectedprivateentity(Section42).Part3:SupervisionofJointVentureProjectUponsigningthePPPcontract,theresponsibleministershallappointaSupervisoryCommittee,whichistaskedwiththedutyandresponsibilityofsupervisingandmonitoringtheJointInvestmentProject,aswellasrenderingopinionswithregardtoanyrevisionofthePPPcontract.TheSupervisoryCommitteeconsistsof:

§ Representativeoftheresponsibleministry(mustnotbelowerthantheexecutivelevel)(ChairmanofCommittee)

§ RepresentativeofAttorneyGeneral(MemberofCommittee)§ RepresentativeofSEPO(MemberofCommittee)§ Representativeoftheprojectowneragency(MemberofCommittee&Secretary)

Part4:AmendmentoftheJointInvestmentContractandMakingaNewContractWhereamendmentstothePPPcontractarenecessary,theProjectOwnershouldprovidethereasonsforsuch amendments, as well as other prescribed information, to the Supervisory Committee forconsiderationtogetherwiththedraftamendedJointInvestmentcontracttotheOfficeoftheAttorney-Generalforreview.Finally,theProjectOwnershouldsubmittheamendmentproposaltotheresponsibleMinister.Uponapproval,theProjectOwnerisabletosigntheamendedJointInvestmentcontract.Chapter5–ExerciseofPowerforPublicBenefitSection50:Thissectionintroducesanovelconcept.Whereitisdeterminedthataprojectcouldadverselyaffectthecitizenry,economyorsociety,theProjectOwner,withtheCabinet’sapproval,isempoweredto:

(i) Engage in the Joint Investment Project or assign another person to engage in such JointInvestmentProjecttemporarily;

(ii) AmendtheJointInvestmentcontract;and




(iii) TerminatetheJointInvestmentcontract.

Chapter6–Public-PrivatePartnershipPromotionFundSection51:ThePublic-PrivatePartnershipPromotionFundisestablishedundertheMinistryofFinance,withtheaimofsupportingtheimplementationofthePPPAct.Thepurposeofthefundistocoverretainerfeesofconsultants.Section52:TheFundconsistsofthefollowingmoneyandassets:

(1) MoneyandfinancialassetswhicharetransferredunderSection66;(2) Governmentsubsidies;(3) Proceeds derived from the Private Party selection process and fees for the evaluation of

proposals;(4) MoneyandfinancialassetsderivedfromthemanagementoftheFund;(5) Moneyandfinancialassetsthatdonors(anyone)givetotheFund(non-taxdeductible);(6) InterestaccruedfromtheFund’scashandsecurities.

Section54:Where theProjectOwnerdoesnothaveabudgetprovisionspecifically reservedto retainconsultants,itcansubmitafundappropriationrequestwiththePPPPromotionFund.Section56:TheFundCommitteeconsistsof:

§ PermanentSecretaryoftheMinistryofFinance(ChairmanoftheBoard);§ Secretary-GeneralNationalEconomicandSocialDevelopmentBoard;§ BudgetBureauChief;§ Director-GeneraloftheComptrollerGeneral'sDepartment.

Chapter7–MiscellaneousWithin 30 days from the date of execution of the Joint Investment contract, the ProjectOwner shalldiscloseasummaryoftheJointInvestmentProject’sdetailstothepublic.Chapter8–PenaltiesAmemberoftheSelectionCommitteewhoactscontrarytoSection37ofthePPPActshallbesubjecttoimprisonmentnotexceedingthreeyearsand/orafinenotexceedingTHB600,000.Section37makesitanoffencefortheSelectionCommitteemembertoconductthefollowingactsduringhisorhertenureasmemberandwithintwoyearsfromthedateonwhichtheProjectOwnerenteredintoaJointInvestmentcontractwiththeselectedprivateentity:

(1) Becomingaboardmember,personhavingmanagementauthorityoradvisorinaprivateentitythathasbeenselectedforinvestmentinaJointInvestmentProjectforwhichheorsheactedasamemberoftheSelectionCommittee;and

(2) Holdingsharesinaprivateentityunder(1)inanamountexceedingZeroPointFivePercent(0.5%)ofthepaid-upsharecapital,whetherbyhimselforherselforbyhisorherspouseoranonsuijurischild.

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