Photographer: Dario Pignatelli/Bloomberg

Thailand's $3.2 Billion Future Fund Delayed by Spat Over Costs

  • Official heading infrastructure fund says IPO date now unclear
  • Labor union claims government financing is the cheaper option

Thailand’s planned 100 billion baht ($3.2 billion) infrastructure fund is embroiled in a court dispute over costs, threatening to further delay its listing.

A labor union claims it would be cheaper to use borrowings by Expressway Authority of Thailand, a state entity, to pay for road projects due to be financed via the Future Fund, according to Ekniti Nitithanprapas, director general of the State Enterprise Policy Office.

"We can’t say when the fund will be launched as it depends on the court’s decision,” Ekniti said in an interview Thursday, adding he still hopes it will start in time to finance two expressway projects by September. Ekniti has been overseeing the fund’s development.

The long-delayed Future Fund was due for an initial public offering by March last year under an earlier timeline. The project is one element of the Thai military government’s ambitious infrastructure agenda to bolster slowing economic expansion. The pace of project implementation is the key challenge.

The Supreme Administrative Court is deciding whether to accept the case, Ekniti said. The government’s argument is that the fund is a key plank of policy to tap private-sector financing, and so can’t be compared directly with the highway authority, whose debts are guaranteed by the government, he added.

Thailand’s Cabinet approved the fund last year, and said it would initially finance two expressways linking Bangkok to areas in the west and east, worth a combined 45 billion baht. Finance Minister Apisak Tantivorawong has said the fund will offer a yearly return of 7 percent to 8 percent.

There might be a significantly longer wait to get road projects underway if the country relies only on the expressway authority, according to Ekniti.

— With assistance by Joyce Koh

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