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10 Apr 2015

Real Estate and Construction

Public Construction, 1H15: Recovering with Ongoing Investment (Current Issue No. 2619 Full Ed.)

Most public infrastructure projects during 1H15 are ongoing investment projects, both large and small, e.g., the Blue Line electric rail extensions on Hua Lamphong-Bang Khae and Bang Sue-Tha Phra routes, plus repairs of primary and secondary national highways. There are also government investment projects as part of its economic stimuli valued at THB23 billion for 2014-2015, such as repairs of government buildings and national highways across the country. Of that, some THB22 billion has been set aside and disbursed during 1H15.
It has been found that disbursements on the investment budget during the first six months of FY2015 were below target, though gradual increases were seen between January and March. Since some projects are currently undergoing procurement and price reviews, their budgetary disbursements are being delayed. As disbursements involve many steps, those for 1H15 public construction projects may be postponed until 2H15.

However, the government is trying to accelerate investments under an urgent transportation development plan for 2015 valued at THB55.9 billion. As a result, we at KResearch are of the view that public construction investments during 1H15 may grow 4.0-6.5 percent YoY to THB210.1-215.2 billion, given a low 2014 base of comparison.

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