Embed Size (px)
Citation preview
CDP-Infrastructure Annexes Page
1
THAILAND
COUNTRY DEVELOPMENT PARTNERSHIP
– INFRASTRUCTURE –
Concept Paper March 2007
Pub
lic D
iscl
osur
e A
utho
rized
Pub
lic D
iscl
osur
e A
utho
rized
Pub
lic D
iscl
osur
e A
utho
rized
Pub
lic D
iscl
osur
e A
utho
rized
Pub
lic D
iscl
osur
e A
utho
rized
Pub
lic D
iscl
osur
e A
utho
rized
Pub
lic D
iscl
osur
e A
utho
rized
Pub
lic D
iscl
osur
e A
utho
rized
THAILAND
COUNTRY DEVELOPMENT PARTNERSHIP:
INFRASTRUCTURE (CDP-INFRA)
CONCEPT PAPER
MARCH 2007
CURRENCY EQUIVALENTS:
Currency Unit – Thai Baht (THB)
Exchange Rate (as of 30 March 2007):
THB 1,000 = US$ 28.6
US$ 1.00 = THB 35.0
GOVERNMENT FISCAL YEAR:
October 1 – September 30
ABBREVIATIONS AND ACRONYMS
AAA Analytical and Advisory Activities
ADB Asian Development Bank
ASTAE Asia Sustainable and Alternative Energy Program
BOB Bureau of Budget
CAT Communications Authority of Thailand
CDM Clean Development Mechanism
CDP Country Development Partnership
CDP-INFRA Country Development Partnership for Infrastructure
CISC Canadian Interconnection Steering Committee
COC Chamber of Commerce
DEDE Department of Alternative Energy Development and Efficiency
DGR Department of Groundwater Resources
EAPIRF East Asia and Pacific Infrastructure Regulatory Forum
EE Energy Efficiency
ENCON Energy Conservation Program
EPPO Energy Policy and Planning Office
ESMAP Energy Sector Management Assistance Program
FEC Final Energy Consumption
FTA Free-Trade Area
GDP Gross Domestic Product
IFI International Financial Institution
JBIC Japan Bank for International Cooperation
KPI Key Performance Index
kW Kilowatt
kWh Kilowatt-Hour
LAO Local Administration Organization
LSP Logistics Service Provider
MEA Municipal Electricity Authority
MOE Ministry of Energy
MOF Ministry of Finance
MONRE Ministry of Natural Resources and Environment
MOT Ministry of Transport
MRT Mass Rail Transit
MW Megawatt
MWe Megawatts electric
NEDA Neighboring Countries Economic Development Cooperation Agency
NESDB National Economic and Social Development Board
NGO Non-Governmental Organization
NGV Natural Gas Vehicle
NTB Non-tariff barriers
NTC National Telecommunication Commission
OTP Office of Transport and Traffic Policy and Planning
PDA Population and Community Development Association
PDMO Public Debt Management Office, Ministry of Finance
PEA Provincial Electricity Authority
PEC Primary Energy Consumption
PPI Private Participation in Infrastructure
PPIAF Public-Private Infrastructure Advisory Facility
PPP Public-Private Partnership
QoS Quality of Service
R&D Research & Development
RE Renewable Energy
SOE State-Owned Enterprise
SPP Small Power Producer
TA Technical Assistance
TAO Tambon Administration Organization
TFL Thai Federation of Logistics
TOR Terms of Reference
TOT Telephone Organization of Thailand
USF Universal Service Fund
USO Universal Service Obligation
UTDP Urban Transport Development Partnership
VPWS Village Piped Water System
VSPP Very Small Power Producer
WBI World Bank Institute
ACKNOWLEDGEMENTS
This document was prepared by a World Bank team based on extensive discussions with
the National Economic and Social Development Board of Thailand (NESDB) and other
relevant agencies, and under the general guidance of Arkhom Termpittayapaisith (Deputy
Secretary General, NESDB), Ian Porter (Country Director for Thailand, World Bank),
and Christian Delvoie (Director, Sustainable Development Department, East Asia and
Pacific Region, World Bank).
The World Bank team is led by Zhi Liu and comprises Kirida Bhaopitripr, Antonie de
Wilde, Mohinder Gulati, Baher El-Hifnawi, Michel Kerf, Chanin Manopiniwes,
Rachadawan Pasugswad, Nat Pinnoi, Apurva Sanghi, Ashok Sarkar, Kalpana Seethepalli,
Peter Smith, Manida Unkulvasapaul, Douglas Webster, Chaohua Zhang, and Samuel
Zimmerman.
The NESDB team is led by Chanvit Amatamatucharti (Director, Infrastructure Project
Office) and comprises Poomjai Attanun, Suriyon Thunkijjanukij, Thida Pattatham,
Anuwan Vongpichet, Apirada Chinprateep, Danucha Pichayanan, Manutsawee Sookaree,
Nuanprae Patramai, Nitchasil Tantivejkul, Noppajit Luangchosiri, Supree Tientamnoon,
and Visnu Tivatansakul.
Peer reviewers include Paul Amos (Transport Adviser, World Bank), and Anil Cabraal
(Lead Energy Specialist, World Bank), Jose A. Gomez-Ibanez (Professor of Public Policy
and Urban Planning, Harvard University), and Shahid Yusuf (Research Manager,
Development Economics Research Group, World Bank).
Useful advice was received from Jitendra Bajpai (Transport Sector Director, East Asia
and Pacific Region, World Bank), Somkid Buapeng (Deputy Director General,
Department of Groundwater Resources, Ministry of Natural Resources and
Environment), Utis Kaothien (Deputy Secretary General, NESDB), Jim Lynch (Deputy
Head, Thailand Resident Mission, ADB), Kazi Martin (Lead Economist, World Bank),
Taisuke Miyao (Senior Representative, JBIC Bangkok), Richard Pyvis (Director, Credit
Lyonnais Securities Asia B.V.), Denis Robitaille (Operations Manager, Southeast Asia
Country Department, World Bank), Maitree Srinarawat (Director General, Office of
Transport and Traffic Policy and Planning, Ministry of Transport), Keshav Varma (Urban
Sector Director, East Asia and Pacific Region, World Bank), Jean-Pierre Verbiest
(Country Director, Thailand Resident Mission, ADB), Mechai Viravaidya (Chairman,
Population & Community Development Association), Sun Vithespongse (Deputy
Director General, Public Debt Management Office, Ministry of Finance), Suranan
Wongvithayakamjorn (Secretary General, National Telecommunication Commission),
and Junhui Wu (Energy Sector Manager, East Asia and Pacific Region, World Bank).
THAILAND
COUNTRY DEVELOPMENT PARTNERSHIP:
INFRASTRUCTURE (CDP-INFRA)
CONCEPT PAPER
MARCH 2007
TABLE OF CONTENT
I. Introduction ......................................................................................................................1
II. An Overview of Sector Issues .........................................................................................2
III. Approach ........................................................................................................................4
IV. Components and Actions ...............................................................................................5
V. Results Measurement and Management .........................................................................9
VI. Partnership Arrangement .............................................................................................10
VII. Budget and Resource Mobilization (Indicative) ........................................................11
VIII. Risks and Mitigation Measures .................................................................................11
ANNEX 1: Background and scope of work for Component 1: Technical support
for the formulation and implementation of infrastructure strategies ................................... I
ANNEX 2: Background and scope of work for Component 2: Technical support
for renewable energy development and energy efficiency ............................................... VI
ANNEX 3: Background and scope of work for Component 3: Urban Transport
Development Partnership (UTDP) jointly supported by ADB, AFD, JBIC, and
World Bank Group ......................................................................................................... XVI
ANNEX 4: Background and scope of work for Component 4: Technical
assistance for capacity building of the National Telecommunication Commission ....XXIV
ANNEX 5: Background and scope of work for Component 5: Implementation
support for pilot demonstration project for rural water supply and income
generation ............................................................................................................... XXVII
ANNEX 6: World Bank Press Release—National Launch of the Country
Development Partnership for Infrastructure ............................................................. XXXIV
CDP-Infrastructure
1
Thailand
Country Development Partnership for Infrastructure
(CDP-INFRA)
I. Introduction
This concept paper defines a Country Development Partnership for Infrastructure (CDP-INFRA)
between the Government of Thailand and the World Bank Group. The CDP-INFRA will be a
knowledge-based partnership for analytical works and implementation support actions in key
areas of the country‘s infrastructure development agenda. The overall objective of the CDP-
INFRA is to help the country improve the national competitiveness and the well-being of the
population, by supporting the development and implementation of infrastructure strategy,
policies, regulatory and institutional actions, and investment programs. The framework of CDP-
INFRA is defined on the basis of the on-going Thailand-World Bank Group Partnership for
Development (see Box 1). The CDP-INFRA will be led by the Government with support from
the World Bank and other international development agencies. The National Economic and
Social Development Board (NESDB) is the lead agency from the Government for the Thailand-
World Bank Group Partnership for Development as well as the CDP-INFRA.
Box 1: The Country Development Partnership (CDP)
What is the CDP?
The Country Development Partnership (CDP), launched in 2000, is a knowledge-based partnership between the
World Bank and the Thai Government. The CDP is a three-year integrated framework for actions in key areas of
the country‘s development agenda. Each CDP is led by the Government with support from other stakeholders,
including the World Bank and other international financial institutions (IFI). The CDP also serves as a vehicle
for engaging civil society, the private sector, and other partners in the policy design, implementation, and
monitoring process. Depending on where support is needed, the Bank‘s engagement in a CDP can take the form
of analytical and advisory activities, technical assistance, IFI coordination, and/or partnerships. In addition, as
appropriate, investment projects can selectively support implementation.
How does CDP work?
Step One
The Government selects key priority areas for the CDP.
An outcomes-oriented action plan with a clear timeline, milestones, and accountabilities is formulated,
based on strong analytic work—as laid out in a development matrix which describes the CDP objectives,
output benchmarks, and capacity building inputs.
Division of labor and support from other partners is agreed—as laid out in the partnership arrangement
section, which details the inputs of partners and identifies potential resources to be tapped as well as any
funding gap.
Arrangements for specific analytic and advisory activities (AAA), technical assistance (TA), and
capacity building support are determined.
Step Two
Progress is monitored through public workshops with stakeholders annually or biannually.
Specific action plans are fine-tuned and adjusted based on the progress review meeting.
Interim implementation reports are completed and disseminated to stakeholders.
Step Three
Specific CDP progress is integrated in a comprehensive progress review on the national agenda.
Thailand
2
The main text of this concept paper defines the components and activities of the CDP-INFRA for
the next three years. It provides the background, justification and scope of work for the proposed
activities, and highlights the approach, a time-bound work program, implementation
arrangements, indicative budget and means of resource mobilization, and matrices of specific
objectives, inputs, outputs, and expected outcomes for each component. The background and
more detailed scope of work for each of the proposed components are included in the annexes.
This concept paper will be a guiding document for the implementation of the proposed activities.
Additional activities that respond to the emerging needs of the country‘s infrastructure
development agenda may be supported under the CDP-INFRA, depending on the availability of
resources.
The CDP-INFRA was officially launched on January 31, 2007 (see Annex 6 for a press release
which also provides web links to relevant speeches and presentations made in the CDP-INFRA
launching workshop).
II. An Overview of Sector Issues
Over the last few decades, economic infrastructure—energy, transport, water and sanitation, and
telecommunications—has played an important role in supporting Thailand‘s economic growth
and meeting the growing demand of the population for various infrastructure services. The
achievements are significant but there are also business areas that remain underserved (see Box
2). The electricity supply, intercity highway transport, inland water transport, ocean shipping,
urban water supply, and telecommunication services are generally adequate, despite the
existence of minor or moderate deficiencies. Air transport can be considered world-class.
However, subsectors such as urban transport in Bangkok and Chiang Mai, water supply in many
rural areas, and the nationwide waste water treatment systems have long been underserved.
Box 2: Key Sector Performance Indicators, 2004/5
Population with access to improved water source: 91% (rural), 95% (urban), and 93% (all)
More than 25,000 villages (12.5 million people or 20% of the population) without piped water system, and
about 15,000 of these villages with inadequate water supply
Population with access to improved sanitation: 97%
Population with access to electricity: 91%
Average electricity tariff (nominal US$/kWh): 0.063 (residential), and 0.059 (industrial)
Transmission and distribution losses: 7.3%
Total energy expenditures over GDP: 15% of GDP
Share of renewable energy over total commercial energy usage: 0.5%
Total logistics costs over GDP: 16%
Percent of roads paved: 97%
Number of fatalities from road accidents (2004): 13,982
Households with a telephone mainline (2006): 23.4%
Population (over 6 years old) with a cellular phone (2006): 41.6%
Population who use internet (2005): 11.4%
Source: World Bank (2006), Selected Indicators of Infrastructure Performance: How Do East Asia and Pacific Countries Compare?, East Asia
and Pacific Infrastructure Department; National Statistical Office Website.
CDP-Infrastructure
3
Under usual circumstances, improved quality and affordability of infrastructure services across
all infrastructure subsectors is a constant requirement for responding to growing demand. But
Thailand is also facing some new challenges. Since the Asian financial crisis that erupted in
1997, demand for both infrastructure services as well as infrastructure investment in Thailand
had sharply declined. Today, with the economy back on track, demand is growing rapidly. For
example, demand for electric power is growing at eight percent per year. Traffic growth on
many national highways approaches 10 percent a year. Capacity shortages and bottlenecks are
emerging in almost all subsectors, constraining economic growth. This is compounded by the
increases in international oil prices. The Government is seriously concerned with the relatively
high logistics costs, heavy traffic congestion in Bangkok, high energy intensity, and low level of
renewable energy development. These problems directly reduce national competitiveness and
weaken the foundation for long-term economic growth and sustainability.
Some of the issues, such as the emerging bottlenecks, are short term in nature and can be
overcome with capacity investment and various measures for improved efficiency. Others, such
as relieving the high energy intensity and developing renewable energy, are long term and
require persistent effort to be initiated now.
Infrastructure financing remains to be a challenge. Government budget allocations will be under
constant pressure from competing social services such as education and public health. Due to the
policy emphasis on maintaining macroeconomic and fiscal stability, the Government will have to
increasingly rely on off-budget financing for infrastructure. However, the private sector, whose
participation in infrastructure financing has suffered from a number of financial and contractual
problems brought on by the Asian financial crisis, may not be fully ready to re-enter the market.
Local infrastructure service delivery is another challenge. Under fiscal decentralization, local
governments, especially those at the Tambon level, increasingly assume responsibility for the
delivery and management of local infrastructure services. However, service delivery is seriously
constrained by the weak implementation capacity in most localities.
These issues all require appropriate attention, through effective implementation of clearly
defined medium-term development plans and investment programs, which are guided by long-
term development strategy. A number of associated policy, regulatory, institutional, and
financing issues should also be addressed progressively to improve the competition, efficiency
and affordability of infrastructure services, and to lay a foundation for sustainable infrastructure
development.
Over the last two years, government agencies have been preparing strategies and programs to
respond to the infrastructure challenges. The NESDB has drafted a national logistics
development master plan and is in the process of formulating the ten-year implementation plan.
The Energy Policy and Planning Office (EPPO) prepared an energy strategy for competitiveness,
and set targets for renewable energy development. The line agencies have also prepared or are
preparing investment programs to meet the rising demand for infrastructure services. The Tenth
Five-Year Plan formulated by the NESDB gives strong emphasis on infrastructure, logistics and
cluster development. The National Telecommunication Commission (NTC), the first
independent regulatory body in the infrastructure sector, has recently become functional, and its
Thailand
4
regulations are producing impacts on improved market competition, access expansion, and cost
reduction.
More work lies ahead for the Government. There is a need for broad strategic directions for
more sustainable infrastructure development. There is an urgent need for the Government to
investigate the renewable energy development options and for actions to jump-start the
development at scale. There is also a need for better policy environment for the private sector
participation in the provision and management of infrastructure services. At the implementation
level, there are needs for capacity building for the newly established regulatory agencies, for
improved clarity in infrastructure financing policy, and for improvement of the infrastructure
prioritization and delivery process so that good projects are implemented in a timely and efficient
manner.
III. Approach
The CDP-INFRA follows the partnership approach set out by the Thailand-World Bank Group
Partnership for Development, which was approved by the Bank‘s Board in December 2002 and
has since been the umbrella program for the Bank‘s activities in Thailand. The approach is
based on an recognition that the relationship between Thailand and the Bank has progressed from
primarily a borrower-lender relationship to one of a true development partnership. While
financial support remains an important part of this partnership, the Bank‘s role has evolved more
towards facilitating knowledge sharing and providing policy advice on medium-term structural
issues. Building on this evolving approach, the Thailand-World Bank Group partnership focuses
on diagnostic and monitoring work and implementation support for select critical issues in
Thailand‘s overall national development agenda. So far, a few thematic or sectoral CDPs have
been or are being supported under the Thailand-World Bank Group partnership. These include
CDPs for Governance, Financial and Corporate Sector, Social Protection, Poverty, Environment,
Education, and Health.
For the concept development of the CDP-INFRA, a series of preparatory discussions have been
carried out between the World Bank and the NESDB and other government agencies. Other
international financial institutions including ADB, AFD, and JBIC have also been consulted.
From this preliminary work, five focus areas were identified. Accordingly, five components are
defined as follows:
1. Technical support to the formulation and implementation of infrastructure and logistics
development strategies;
2. Technical support to renewable energy development and energy efficiency;
3. Technical support to urban transport development in the Bangkok metropolitan area,
under the Urban Transport Development Partnership (UTDP) jointly supported by ADB,
AFD, JBIC, and World Bank Group;
4. Technical support to the capacity building program of the National Telecommunication
Commission (NTC);
5. Implementation support to a pilot demonstration project for rural water supply and
income generation.
CDP-Infrastructure
5
All five components are considered to be highly relevant to the national development agenda.
These are also business areas where the Bank possesses international experience, knowledge and
expertise.
The components and actions are summarized in the next section. Their expected outputs and
outcomes are explained in the development partnership matrices. The details of each component
are provided in annexes one through five.
IV. Components and Actions
Component 1: Technical support for the formulation and implementation of infrastructure
strategies
The objective of this component is to provide an analytical underpinning and support to the
Government‘s ongoing effort to develop and implement sustainable infrastructure and logistics
strategies. The component will include analytical and advisory activities (AAA), to help the
Government better define its long-term infrastructure strategic directions, prioritize the medium-
term development programs, and enhance the legal, institutional, and managerial frameworks to
support sustainable infrastructure development.
The need for new strategic thinking arises from a high level of consensus within the country that
Thailand should develop a more resilient and sustainable economy that is able to deal with
shocks. Facing high oil prices, the Government‘s long term concern is how to achieve a better
energy mix, better energy efficiency, and less oil-dependent transport modal splits. The
Government has done a great deal of thinking on these subjects in recent years, and has come up
with strategic ideas to address the concerns. The key challenge is how to articulate them in a
more coherent manner and put them into operation.
The scope of work for this component is envisaged to cover the following activities: (i) a critical
assessment of Thailand‘s infrastructure development and performance in each sub-sector; (ii)
analysis of the key drivers influencing Thailand‘s socio-economic future and their implication to
the future infrastructure and logistics needs; (iii) analysis of the linkages between public and
private investment and between infrastructure and investment climate; (iv) policies to promote
sustainability and efficiency of infrastructure services; (v) infrastructure financing including
fiscal space, private sector financing, and public private partnership modalities; (vi) legal and
regulatory framework; (vii) planning and policy making process; (viii) environmental and social
issues and citizen participation; (ix) subsidy and pricing policies; and (x) local infrastructure
service delivery, including sub-national financing of infrastructure.
The main deliveries will include two major analytical studies, supplemented by just-in-time
advisory and capacity building activities (including training and seminars), where appropriate:
1. Thailand infrastructure sector study. This is expected to be a comprehensive sector study
that builds on current knowledge, focuses on the improvement of analytical basis for
strategic thinking and formulation, and provide a critical assessment of sector
Thailand
6
performance, issues, and options to meet the existing and anticipated challenges. It will
be undertaken during 2007/08.
2. A study on public-private partnership (PPP) strategies for infrastructure. This proposed
study will review Thailand‘s experiences with private sector participation in
infrastructure financing; examine contributing factors to the success and failure; and
identify feasible PPP strategies, especially the key elements required for a conducive
policy environment where private financing of infrastructure could yield significant and
sustainable benefits. The study may be undertaken in the second year of the CDP-
INFRA.
3. A series of knowledge sharing seminars on international experiences and practices. The
topics would be determined on an as-needed basis, and may include the following: global
trends in logistics development, infrastructure financing, environmental and social
safeguards, stakeholder involvement in infrastructure, and sub-national government
financing. The seminars will be arranged on the basis of availability of expert speakers.
In recent months, the NESDB has initiated some ground work in setting infrastructure and
logistics strategy. The NESDB also plans to publish the Thailand Infrastructure Annual Reports.
The first annual report is currently being prepared by NESDB staff, assisted in a limited way by
the World Bank. It is agreed that the studies defined under this component may be disseminated
through the annual reports.
Component 2: Technical support to renewable energy development and energy efficiency
This component includes collaborative activities with the energy sector agencies to explore
technological and policy options in support of long-term, secure and sustainable renewable
energy. The objective is to support the Government to achieve the renewable energy and energy
efficiency targets. The activities involve analytical works and knowledge sharing, especially in
the form of international experience sharing.
1. A study on Thailand‘s alternative energy and energy policy. Specifically, this item
entails setting energy targets in the work agenda of the NESDB. The study will assess
the natural endowment of renewable energy including biofuels in Thailand, and explore
economically feasible options for renewable energy development. This study will also
provide input into the long-term infrastructure development strategy. The Asia
Sustainable and Alternative Energy Program (ASTAE) has provided funding for the
study, and consultants will be engaged. The consultancy is expected to be completed by
end of June 2007.
2. Workshops. The first workshop was successfully conducted in late August 2006, and
focused on international knowledge dissemination. The second workshop was held in
March 2007, and it focused on sustainable energy project financing and its challenges.
Additional workshops are planned for the dissemination of the Thailand‘s alternative
energy and energy policy study, approximately in the second half of 2007.
CDP-Infrastructure
7
3. Development of a coherent energy efficiency database for Thailand. While the energy
efficiency data are largely available, they are scattered throughout different agencies.
Consolidation and collection of data are necessary. While NESDB is in the process of
hiring a consultant to build an energy-sector database for Thailand, the Bank will provide
guidance on best practices on the activity.
4. Carbon finance knowledge sharing. Thailand is yet to participate in carbon finance.
More systematic information on carbon finance and the benefits to Thailand from selling
carbon credits under the Kyoto Protocol is needed to raise public awareness and gain
public support. It is proposed that a paper be produced focused on the process for Thai
companies and banks to register for and obtain carbon credit agreements. This will be
followed by one or more workshops and other activities to catalyze Thailand‘s
involvement in the clean development mechanism (CDM), as defined under the Kyoto
Protocol.
5. Exploration of commercially financed renewable energy and energy efficiency projects.
Bankability of energy-related investment projects is a topic of great interest to the
Government. Activities under this sub-component will involve a survey of financial
sector regulations, which might prevent commercial banks from increasing their exposure
in this sector. As not many commercial banks have knowledge and understanding of the
opportunities that the sector offers, proposed initiatives will enhance the foundation for
private participation in financing renewable energy projects, with understanding and
support from the national policy authority.
6. Field study tours. NESDB wishes to expand its knowledge base to include
comprehensive understanding of the energy sector, and requests the Bank to assist with a
field program for NESDB staff to visit a number of countries and to learn from their
experiences in the development of the energy sector. Under this activity, two NESDB
staff will take part in the workshop on International Best Practices in Institutional
Frameworks for Energy Efficiency Implementation in South Korea being held on
September 28 and 29, 2006. In addition, NESDB finances one staff member‘s on-the-job
training at the Bank‘s headquarters for three months.
Component 3: Technical support to urban transport development
This component is defined as an Urban Transport Development Partnership (UTDP) and is
supported by several international financial institutions (IFIs), including ADB, AFD, JBIC and
the World Bank Group. The UTDP is a knowledge-based partnership, providing technical
advisory support in a fully coordinated manner to the Government‘s development and
implementation of urban transport strategy, policy, plans, programs, projects and related
regulatory and institutional capacity building activities. The ultimate goal of the UTDP is to help
improve the effectiveness, efficiency, and sustainability of the Bangkok metropolitan region‘s
multi-modal transport system.
Over the last 12 months, ADB has provided technical assistance (TA) to the Government on
options of public transport integration, advice on the development of an MRT concession model,
analysis of options and implications of integrated fares and ticketing, and development of an
Thailand
8
MRT financial model. JBIC has been in discussion with the Government on financing priority
MRT projects. The World Bank has provided advisory services to the Government regarding
procurement methods and private sector financing modalities.
The key inputs of the World Bank Group during 2007/08 under the UTDP include:
1. Strategic urban transport policy directions for Bangkok. The primary objective of the
study is to advise government policy makers on specifically, the existing problems that
undermine performance of the mass rail transit investment, and, generally, the breadth,
depth and causes of urban transport problems in Bangkok metropolitan, the potential
options, and a practical sequence of actions to address these problems.
2. A technical workshop. Planned for mid-2007, the workshop will disseminate the
completed and on-going works under the UTDP and continue discussions on various
issues relating to MRT and urban transport development.
3. Proposed IFC advisory services for private financing transaction. This is proposed as a
supportive effort to the Government‘s search for private financing for the mass rail transit
projects. IFC could serve as a multilateral advisor for the Government throughout the
private financing transaction process, and provide complete advisory services from
technical due diligence, legal services, financial structuring, and bidding, to transaction
and post-transaction services, depending on the needs and the preparation status.
Component 4: Technical support to the capacity building program of the national
telecommunication commission (NTC)
The objective of this component is for the Bank to continue advising the NTC on various
regulation issues, building on the successful collaboration between the NTC and the Bank over
the past year. Funded by PPIAF, the Bank has mobilized international experts to work with NTC
on the following priorities: the telecom master plan, interconnection and costing, public
consultation, licensing, universal service and training. NTC has agreed to continue the
collaboration into the second phase with its own funding. The component will include the
following activities:
1. The second phase of NTC capacity building. It is expected to deliver briefings and
workshops to NTC commissioners and senior staff on a range of regulatory topics, which
will be determined soon.
2. Possible capacity building for other regulatory agencies. Built on the experience of
collaboration with NTC, the Bank could mobilize the resources to support other
regulatory agencies. Skills and the regulatory decision making process could be
enhanced through information exchange, experience sharing, and training programs
available from the East Asia and Pacific Infrastructure Regulatory Forum.
CDP-Infrastructure
9
Component 5: Implementation support to a pilot demonstration project for rural water supply
and income generation
Through support to a pilot demonstration project for rural water supply and income generation,
this component will help to demonstrate an innovative approach that speeds up the provision of
rural water infrastructure services. Unlike the conventional approach that relies entirely on the
public sector for rural water provision, this alternative approach possesses the following key
features: (i) provision of piped water systems on a commercial basis through private sector
financing; (ii) community participation in the management of the systems including operations
and maintenance and service management; and (iii) introduction of cash-earning farming
practices that are made possible through the available water, to improve the affordability and,
hence, the commercial viability.
The pilot demonstration project will support the provision of sustainable village piped water
systems in 20 to 40 selected poor villages through private sector financing, community
participation and an income-generation mechanism. The project is expected to build a strong
case for the Government to fund the scaling-up of the innovative model. The project will
accomplish both the quick expansion of rural access to clean water, as well as demonstrate a
working model applicable to neighboring countries. It is also expected to facilitate private-sector
financiers‘ participation and commitment in financing rural piped water systems. Trust fund
financing will be sought by the World Bank to support the implementation of village capacity-
building activities that assist villages to run the systems built by the private sector. The main
deliveries include the following elements:
1. Implementation support to the pilot demonstration project in 40 selected poor villages.
The main scope of implementation work includes the design of an overall work program,
negotiation with commercial banks on the financing terms for the construction of the
water works, village capacity building for water system operations, maintenance and
management, and income-generation farming practices. The pilot project will be
implemented in two stages, with the first stage covering 15 villages, and the second stage
covering 25 villages.
2. Preparation of an operational manual. The manual will summarize the experience gained
from the pilot project in a user-friendly manner to provide clear guidance to the
Government and other organizations.
3. A dissemination study tour. This will be designed for relevant central and local
government officials from Thailand, Thai mass media, and government officials from
each of the neighboring countries (Cambodia, Lao PDR, and Vietnam).
V. Results Measurement and Management
Results measurement of the CDP-INFRA will be crucial but challenging as the outcomes and
impact of the knowledge partnership will depend on contributions from many partners and
stakeholders. The results measurement should focus on the actual outcomes of the CDP-INFRA
activities. Two matrices are designed as tools for results measurement and management.
Thailand
10
The development matrix summarizes the objectives, inputs, outputs, and outcomes. It is part of a
results-based monitoring system that allows the progress in each component to be monitored by
all stakeholders. The deliverables, responsibility and contribution matrices identify the type of
deliverables, activities, responsible parties, and committed contribution under each component.
The deliverables correspond to outputs in the development matrices. This allows all stakeholders
to clearly identify the linkages between the inputs, the deliverables, the outputs, and the
objectives in each component and across components of the CDP-INFRA.
The monitoring activities help ensure appropriate inputs and processes to achieve satisfactory
outputs and outcomes. The NESDB and the World Bank will take a lead to oversee the progress
and ensure the delivery of results according to the development matrix. Annual workshops, to be
led by the NESDB, will also be conducted to review the progress, identify problems, and
brainstorm for solutions. Consequently, the matrices will be updated as necessary and as the
program progresses.
VI. Partnership Arrangement
The NESDB—Thailand‘s principal planning agency—is a long time counterpart of the World
Bank operations in Thailand, and is the lead Government agency for the umbrella CDP with the
World Bank Group. The NESDB will also be the lead agency for the CDP-INFRA.
Other government agencies involved include the Ministry of Finance (MOF), the Bureau of
Budget (BOB), the Ministry of Transport (MOT) and its Office of Transport and Traffic Policy
and Planning (OTP), the Ministry of Energy (MOE) and its Energy Policy and Planning Office
(EPPO), and the Ministry of Natural Resources and Environment (MONRE). The other partners
include the national Telecommunications Commission (NTC), Chamber of Commerce, Thai
Federation of Logistics (TFL), state enterprises, and private sector.
The UTDP, of which the works supported by the World Bank Group are included in component
three, is a program jointly supported by ADB, AFD, JBIC and the World Bank, and will be
managed jointly by the four agencies.
Other relevant international development agencies will be consulted throughout the CDP-INFRA
implementation period. The CDP-INFRA is intended to be an open platform for all interested
organizations to participate. Therefore, collaboration with other international development
agencies will be defined, where appropriate. The arrangement is summarized in the following
table.
Component Lead Agency Collaborating Agencies
Infrastructure Strategies NESDB MOF, BOB, MONRE, MOT,
MOE, COC, TFL
Renewable Energy and Energy Efficiency NESDB MOE (DEDE), EPPO
Urban Transport Development Partnership
jointly supported by ADB, AFD, JBIC and
World Bank Group
MOF (PDMO), MOT (OTP) BMA, MRTA, BMTA
Regulatory Capacity Building NTC
Rural Water Supply MONRE PDA, TAOs
CDP-Infrastructure
11
VII. Budget and Resource Mobilization (Indicative)
The resources available to the CDP-INFRA for FY07 and FY08 are shown below. These are
indicative only and subject to modification. The resources for FY09 are not shown here but will
be provided when available and during the annual progress review of the CDP-INFRA.
Resources from the Government for the CDP-INFRA include both budget support and in-kind
contributions such as staff time. Due to the annual nature of the government budgeting process,
the budget for FY07 is relatively firm, and the budget for FY08 is indicative only. Throughout
the CDP-INFRA, effort will be made to mobilize more resources that accommodate emerging
work to be undertaken under the CDP-INFRA.
COMPONENT Funding
Source
FY07 FY08
THB
(000,000)
US$ (000)
THB
(000,000)
US$
(000)
1. Support to the development and
implementation of infrastructure strategy
NESDB 6.0 70.0 12.0 70.0
WBI 35.0 35.0
PPIAF 75.0
2. Renewable energy and energy
efficiency
NESDB 4.0 18.0
ASTAE 200.0 200.0
ESMAP TBA TBA
3. Urban Transport Development
Partnership (UTDP) jointly supported by
ADB, AFD, JBIC, and World Bank
World Bank 100.0 60.0
ADB 400.0 TBA
AFD TBA TBA
IFC TBA TBA
PDMO and
OTP
In-kind In-kind
4. Capacity building for the national
telecommunication commission (NTC)
NTC 8.0 TBA
World Bank 30.0 30.0
5. Pilot demonstration project for rural
water supply and income generation
PPIAF 160.0 250.0
DGR In-kind In-kind
Participating
Villages
In-kind In-kind
TOTAL (excluding in-kind and TBA) 18.0 995.0 30.0 520.0
Note: NESDB and NTC financial inputs are additional to in-kind inputs (staff, facility, etc).
VIII. Risks and Mitigation Measures
The implementation of the CDP-INFRA will inevitably face potential risks. These risks need to
be clearly identified so that mitigation measures can be put in place. The first risk, and perhaps
the most important one, is the commitment of all participating agencies to CDP-INFRA in terms
of financial resources, time, staff, and prioritization. Lack of commitment may result in delayed
progress and lower effectiveness in achieving outcomes. The second risk lies in the coordination
among all participating ministries and agencies. The third risk is the degree of influence of
CDP-INFRA activities to the government policies, which often depend to a great extent on
political climate and situation.
Thailand
12
The mitigating measures regarding the first risk involve close and consistent dialogue, not only
through the steering committee and at the management level, but also with the implementing
staff. This is to ensure full and continuing commitment from participating agencies. Close
monitoring and supervision from both the NESDB and the Bank will also ensure timely progress
of the CDP-INFRA. For the second risk, the Bank can facilitate the coordination through regular
consultation and dialogue with NESDB and other agencies. The Bank can also support NESDB
to reach out to the ministries and other agencies to promote the harmonized implementation of
priority policies. The third risk should be addressed with a certain level of flexibility. The CDP-
INFRA can be adjusted in terms of scope, scale, and resources. Regular monitoring of the
progress and constant dialogue with relevant government agencies are required as the key
elements of the risk mitigation measures.
CDP-Infrastructure
13
MATRICES
Matrix 1: CDP-INFRA Development Matrix
Component #1: Analytical advisory activities to support the development and implementation of
sustainable infrastructure strategies
Objectives Inputs Outputs Expected Outcome Partners
To provide
analytical
underpinning to
support the
development
and
implementation
of sustainable
infrastructure
strategy
International
consultant services
Domestic
consultant services
IFI expertise and
staff inputs
Government agency
staff inputs
Seminars and
workshops
Training
Thailand infrastructure
sector study report
(including a background
report on cluster
development and an
infrastructure database)
A study report on
Thailand‘s infrastructure
public-private
partnership financing
strategies
A report on Cluster
Development as an input
for the 10th
Five-year
Plan
Training of NESDB
staff
Strategic direction and
recommendations
adopted by the
Government for more
sustainable
infrastructure
development that
better facilitates
economic growth,
enhances national
competitiveness and
improves the well-
being of the population
NESDB
Component #2: Technical assistance for renewable energy and energy efficiency
Objectives Inputs Outputs Expected Outcome Partners
To provide
technical
support to
explore
technological
and policy
options for the
development of
renewable
energy and
improvement of
energy
efficiency
International
consultant services
Domestic consultant
services
IFI expertise and
staff inputs
Government agency
staff inputs
Seminars and
workshops
Training
A study on Thailand‘s
alternative energy and
energy policy
Workshops on
alternative energy and
policies
Knowledge sharing on
Carbon Financing and
CDM processes
Government staff
training
Energy efficiency
database
Institutional capacity
enhanced and effective
policies adopted in
improving energy mix,
reducing oil and gas
dependency, and
achieving better long-
term energy security
NESDB,
MOEN, EPPO,
private
developers and
investors
Thailand
14
Component #3: Urban transport development partnership jointly supported by ADB, AFD, JBIC and
World Bank Group
Objectives WBG Inputs Output Expected Outcome Partners
To provide technical
advisory support in a
fully coordinated
manner to the
Government‘s
development and
implementation of
urban transport
strategy, policies,
plans, projects and
related regulatory
and institutional
capacity building
International
consultant services
WBG expertise
and staff inputs
Technical
workshops
Transaction-based
advisory services
A study report on the
Bangkok urban
transport
development
strategic roadmap
Technical workshops
Complete advisory
services for the
private financing
transaction
Strategic roadmap for
sustainable urban
transport
development adopted
Actions adopted to
maximize the benefits
of heavy mass rail
transit investments
Priority mass rail
transit projects
financed with private
sector participation
MOF, BOB,
MOT, OTP,
MRTA, BMTA,
BMA and other
relevant
agencies and
service operators
Component #4: Technical assistance for capacity building of the National Telecommunication Commission
Objectives WBG Inputs Output Expected Outcome Partners
To provide
information on
international best
practice experience
and expertise to the
NTC in carrying out
its responsibilities
2nd
Phase of World
Bank‘s technical
assistance to NTC
Selection and
supervision of
consultants in
capacity-building
activities
Enhanced NTC
capacity to carry out
its responsibilities
NTC regulatory
capacity improved
NTC
Component #5: Implementation support for a pilot demonstration project for rural water supply and
income generation
Objectives Inputs Outputs Expected Outcomes Partners
To demonstrate that
rural water supply
services can be
provided in a more
efficient and
sustainable manner,
through a pilot
demonstration project
on the basis of
commercial and
community
participation
PPIAF funding
support
WB expertise and
staff inputs
Government, NGO
and community
participation
Commercial bank
loans
Consultant services
Water systems built
for and managed by
about 40 villages
An operational
manual prepared
Study tour organized
for government
agencies and
neighboring countries
A convincing
alternative model of
rural water supply
available for scaling
up
Rural access to clean
water improved
More incomes earned
by the beneficiary
households
DGR, PDA,
selected villages,
relevant
provincial
government and
Tambon
Administrative
Offices
CDP-Infrastructure
15
Matrix 2: Deliverables – Actions/Contribution Matrix
Deliverables Responsibility Contribution
Component 1: Analytical advisory activities to the development and implementation of infrastructure strategies
Infrastructure Annual
Reports
- NESDB prepares draft reports in Thai
- Bank summarizes in English and provides
comments
- Each contributes staff time
- Bank finances the publication of the
1st Report; NESDB finances the 2nd
and 3rd report
Thailand Infrastructure
Sector Study
- Bank and NESDB jointly conduct the study - Each agency contributes staff time
A Study on the
Infrastructure Public-
Private Partnership (PPP)
Strategies
- Bank, MOF and NESDB jointly conduct the
study
- Each agency contributes staff time
Consultant Report on
Cluster Development
- Bank funds an international consultancy to
support the NESDB
- Bank finances the study
Seminars, workshops,
training courses
- Bank provides expertise through seminars,
workshops, and training courses, which may
include global trends in logistics development,
stakeholder‘s involvement in infrastructure, sub-
national government financing, etc.
- NESDB indicates needs, organizes workshops
and training, and reaches out to related
stakeholders
- Each contributes staff time
- NESDB provides some
seminars/workshops arrangement
- Bank supports video conference,
travel, and arrangement of speakers
costs where appropriate
Component 2: Technical assistance for renewable energy development and energy efficiency
A study on Thailand‘s
alternative energy and
energy policy
- Bank funds an international consultancy to
explore renewable energy potentials and
financing of renewable energy projects
- NESDB works with the consultants
- Each contributes staff time
- ASTAE supports the consultancy
Workshops - Workshops co-arranged jointly by the Bank and
NESDB, EPPO, DEDE, and other related
agencies
- Agencies provide financial, in-kind or
logistics contributions to the
workshops (ASTAE from the Bank‘s
side)
Energy Efficiency
Database
- Consultant hired by NESDB
- Bank provides guidance/comment
- NESDB budget
- Bank provides staff time & expertise
Carbon Finance
Knowledge Sharing,
including CDM
processes
- NESDB prepares paper
- Bank provides relevant information and
guidance, or also can hold knowledge-based
sessions on the issue
- Each contributes staff time
Field Study Tours - NESDB participates in field study tours
- ASTAE finances the study tours
- NESDB finances on-the-job training‘s
travel & accommodation expenses
- Bank provides mentoring & matches
the staffs‘ work program
Component 3: Technical assistance to urban transport development
Bangkok Urban
Transport Development
Strategic Roadmap
- Bank hires a consultant to conduct the study - Bank‘s budget
A technical workshop - IFIs, OTP and PDMO jointly arrange a technical
workshop to disseminate findings in related TA
and studies
- ADB, AFD, JBIC, and World Bank
jointly support the workshop
- OTP and related agencies contribute
in-kinds
Proposed IFC advisory
services for private
financing transaction
- IFC serves as a multilateral adviser to the
government. The complete advisory services
include technical due diligence, legal service,
financial structuring, bidding, and post
transaction service
(Tentative)
Thailand
16
Deliverables Responsibility Contribution
Component 4: Technical assistance for capacity building of the National Telecommunication Commission (NTC)
NTC Capacity Building - NTC hires consultant(s) for capacity building
activities with Bank‘s expert support
- NTC Budget
- Bank staff‘s time
Possible Capacity
Building for other
regulatory agencies
- Build on the experience of collaboration with
NTC, the Bank can mobilize resources to support
other regulatory agencies
(Tentative)
Component 5: Implementation support for pilot demonstration project for rural water supply and income generation
A pilot demonstration
project for rural water
supply system
- PDA & consultants implement the project
- Community participates in the pilot
- Bank supervises the pilot project
- PPIAF Fund
- Commercial financing
- Community in-kind
Operational manual - Consultants will prepare an operational manual,
summarizing the experience gained in the pilot,
for the purpose of possible scale-up by the
government and other organizations
- PPIAF Fund
A dissemination study
tour
- Upon the completion of the pilot, relevant central
and local government officials from Thailand,
Thai mass media, and government officials from
neighboring countries are invited to observe the
program.
- PPIAF Fund
CDP-Infrastructure Annexes Page
I
ANNEX 1: Background and scope of work for Component 1: Technical
support for the formulation and implementation of infrastructure strategies
Background
Historical context. The infrastructure development priorities in Thailand have evolved over the
last several decades. The priority accorded to infrastructure in the National Socioeconomic
Development First and Second Five-Year Plans (1961-1971) was to support emerging industries.
Transportation and communications were given the top priority, followed by energy. The
emphasis shifted to infrastructure for agriculture in the Third and Fourth Plans (1972-1981).
Energy development dominated the budget during the Fifth and Sixth Plans (1984-1997),
because there was high energy demand from the manufacturing industry, which was a key sector
in the export-oriented strategies. In the period of the Seventh and Eighth Plans (1992-2001),
infrastructure development was characterized first by an increase in private sector financing and
then a significant drop in both public and private financing due to the Asian financial crisis in
1997, which put enormous pressure on the budget and capital expenditures. However, there was
sizable transport investment during the Eighth Plan, mostly on expressways to alleviate
congestion.
The past infrastructure development patterns appear to have been pragmatically oriented to
support the economy, respond to growing demand, and attend to specific emerging needs arising
from broad economic development strategies. Thailand has now started to adopt a more
forward-looking approach and take more assertive steps in infrastructure development. The new
expectation for infrastructure involves several dimensions, including support to the production
sector, and the enhancement of overall economic efficiency, competitiveness, long-term
development prospects, and environmental sustainability.
Recent emphasis on infrastructure development. The Government is formulating the tenth Five-
Year National Development Plan, and is preparing to implement major infrastructure investment
programs proposed by line agencies for the next five years to meet the growing demand for
services and improve Thailand‘s competitiveness and the well-being of the population. Further
investment will be needed in the longer term to maintain a high-level of national competitiveness
and improve the energy mix and efficiency. Given the extent of the expenditure envisaged (in
the order of magnitude of trillion Baht), and the increasing competitiveness of the East Asian and
global economies, it is recognized that infrastructure investment should be aligned with and
prioritized to support the future economy, demographics, and energy security of Thailand.
Moreover, the proposed large-scale infrastructure investment requires monitoring of both macro
economic implications (especially on the current account), as well as environmental and social
(distributional) impacts.
Logistics. Thailand is considered an open economy, therefore, a major concern related to
national competitiveness is the cost of logistics. The results of an evaluation of port efficiency,
customs environment, regulatory environment and e-business usage in Thailand appear to be on
average or below compared to other Asian countries. Compared to Japan, Thailand‘s cost of
logistics as a ratio to sales revenue is higher in every key industry. There are deficiencies in both
software and hardware parts of the logistics sector. The Government‘s required procedures on
Annexes Page Thailand
II
import and export are complicated and time consuming, adding non-value added cost to many
exporters and importers. Moreover, the main port-of-entries have become bottlenecked (e.g. the
Lam-Chabang Port). Traffic congestion around factories and ports and on intercity highways
increases logistics costs.
The Government is determined to improve logistics competitiveness. Following the logistics
roadmap drafted in 2004, the NESDB drafted the Five-year Logistic Development Master Plan in
2005. NESDB addressed three critical issues, as follows: (i) how logistics development can
support the key strategic sectors so that Thailand can be competitive in the world arena; (ii) how
logistics development can capture economic value from FTAs, and to support a key strategy for
Thailand to become the hub of Asia; and (iii) how logistics development can grow along with
economic opportunities. Five strategies have been proposed, as follows: (i) business logistics
improvement for efficient logistics and a traceable supply chain; (ii) new trade lanes and logistics
network optimization to improve and place Thailand as a logistics hub in the region; (iii)
logistics business internationalization to raise Thai logistics to international competitive
standards; (iv) trade facilitation enhancement to reduce costs of export-import activities; and (v)
capacity building to develop skilled laborers and a monitoring mechanism for the growing
logistics industry. The implementation of the above strategies will be supervised by Thailand‘s
Competitiveness Development Commission, and carried out by respective line ministries.
NESDB and the Thai Federation of Logistics will be in charge of the monitoring and evaluation,
and report to the Commission.
Cluster development. The Government also intends to strengthen sub-national development
performance through significant infrastructure investment that builds on strong geographic
clusters. The four key clusters are: (i) northern Thailand, linking to the greater Mekong sub-
region, (ii) Phuket – Pang Nga, related to rehabilitation and revitalization of the regional
economy post-tsunami, (iii) the eastern seaboard, focusing on a competitive clean industrial base,
and (iv) the upper south, focusing on amenity based development. The cluster development
concept needs to be further developed and put into operation.
Infrastructure financing. The demand for infrastructure investment is obvious, as the level of
investment dropped significantly since the Southeast Asian financial crisis of 1997. The recent
recovery of the economy is creating new demand for infrastructure services. The challenge
facing the country is the efficiency of the infrastructure financing and implementation—how to
select good projects, and how to finance and implement the projects quickly and appropriately.
This is not a small challenge. Since the financial crisis, private sector investment in
infrastructure has diminished. It is unclear how soon they will return. A survey undertaken for
the recently published East Asia infrastructure study shows that private sector sentiment is
contingent on policy improvements and reduced risks.1
Private sector involvement in the provision of infrastructure in Thailand has an irregular record.
A few areas such as expressways, electricity generation, water supply, telecommunications, and
affordable housing, have performed remarkably well. However, there was little private interest
shown in other sectors such as waste water. Much of the framework in which private sector is
1 ADB, JBIC, and World Bank (2005), Connecting East Asia: A New Framework for Infrastructure.
CDP-Infrastructure Annexes Page
III
currently working was set in 1992. A major problem is an unclear regulatory environment or
specific subsector guidelines at both national and local levels. Recently, a remodeling of the
legal framework, particularly in defining clear guidelines for public-private partnerships (PPP),
has been undertaken. Other areas such as the evaluation of projects and guidelines for feasibility
studies are also under a much needed reform. With updates in the law, new regulatory bodies,
and improved monitoring processes, scope exists for considerably increased private sector
participation in infrastructure delivery in Thailand.
Sub-national governments could presumably play a significant role in delivering local
infrastructure. The 1997 Constitution set a target that 35 percent of public expenditure be made
at the sub-national level by 2005. While the actual achievement—about 25 percent in 2005—
falls short of the target, it is more alarming that the process to date has reduced the efficiency of
infrastructure delivery in Thailand. Much of the problem is related to the structure of
decentralization—the process focused too much on very lower levels of government, particularly
at the sub-district Tambon Administration Organizations (TAOs) whose implementation capacity
is very weak. The Government is trying to rectify this problem by focusing on the provincial
scale, as well as by attempts to consolidate TAOs (through the TAO consolidation legislation).
Objective
The objective of this component is to provide an analytical underpinning and support to the
Government‘s on-going effort to develop and implement sustainable infrastructure and logistics
strategy. The component will include analytical and advisory activities (AAA), to help the
Government better define its long-term infrastructure strategic directions, prioritize the medium-
term development programs, and enhance the legal, institutional, and managerial frameworks to
support sustainable infrastructure development.
Scope of work
1. Thailand infrastructure sector study
This study will build on the current international and domestic knowledge, support a critical
assessment of the strategic issues facing Thailand, and articulate and put into operation the
strategic thinking on sustainable infrastructure development. The scope of work is envisaged to
cover the following topics: (i) a critical assessment of Thailand‘s infrastructure development and
performance in each sub-sector; (ii) analysis of the key drivers influencing Thailand‘s socio-
economic future and their implication to the future infrastructure and logistics needs; (iii)
analysis of the linkages between public and private investment and between infrastructure and
the investment climate; (iv) policies to promote sustainability and efficiency of infrastructure
services; (v) infrastructure financing including fiscal space, private sector financing, and public
private partnership modalities; (vi) legal and regulatory framework; (vii) planning and policy
making process; (viii) environmental and social issues and people‘s participation; (ix) subsidy
and pricing policies; and (x) local infrastructure service delivery, including sub national
financing of infrastructure.
Annexes Page Thailand
IV
An infrastructure database will be developed as part of the exercise for the long-term
infrastructure strategy. This will also include the development of key sector performance
indicators.
A background report will also be prepared on the cluster development concept and will include
the following analytical tasks:
Assess, at a strategic level, policies and initiatives currently being put forward regarding
implementation of a geographic cluster approach to development in Thailand, identifying
key issues requiring attention.
Working backwards from identified geographic clusters, undertake an initial assessment
of the strength of regional economies (and economic clusters in particular) to support
future development in these key geographic areas, identify possible means to deepen
and/or broaden existing clusters, and facilitate emergence of new clusters in each of the
four geographic areas.
Identify, for consideration, priority types of strategic thrusts or policy frameworks
(national and/or sub-national) that leverage rapid realization of the development potential
of the key geographic clusters.
Identify, at a meso scale, infrastructure implications (transportation, logistics,
communications) of proposed geographic cluster development, taking into account both
intra and inter cluster spatial dynamics.
Related to the above task, indicate major national spatial planning implications (including
cross-border development) of the proposed geographic cluster developments. For
example, to determine to what extent is the past spatial development framework still
relevant.2
2. Study on infrastructure public-private partnership (PPP) strategies
This activity is an integral part of the CDP-INFRA, given that significant gains from PPP could
be realized contingent upon improvements in the enabling environment and risk mitigating
measures that benefit both private investors as well as the users of Thai infrastructure. The
critical choice facing Thailand in infrastructure provision is whether to build on past experience
in private infrastructure projects, or to return to public procurement and risk losing the progress
achieved. Private delivery of infrastructure can yield significant benefits in conducive policy
environments; as a corollary, reliance upon private finance can result in disappointment if
expectations are unrealistic or if individual PPP transactions are not structured correctly.
A pertinent question to ask is what constitutes a conducive policy environment? The concerns
surrounding private infrastructure projects in Thailand rest partly on the region-wide contagion
effect and deficiencies in the enabling environment. But this is only a starting point to
understand the challenges facing private infrastructure projects in Thailand. A detailed study is
2 In 1996, with the assistance of Norconsult, the NESDB developed a Spatial Development Framework for Thailand.
CDP-Infrastructure Annexes Page
V
called for to fully appreciate the nature and extent to which specific policies contributed to the
triumphs and pitfalls of private provision of infrastructure. Insights into what private investors
look for in potential investments/projects is critical; among other things, it is important to
understand instruments such as guarantees, hedging products and other incentives that serve as
risk mitigating provisions for investors, and enhance the attractiveness of Thailand as a site for
investment. A related study is to look at infrastructure financing and conduct sensitivity analyses
of scenarios with various shares of public and private funding for infrastructure with
corresponding costs and benefits. These studies would form the basis of a PPP strategy within
which specific PPP transactions with risk mitigation provisions for all parties will be designed.
A PPP strategy devised on the basis of a sound understanding of the Government‘s and private
investors‘ preferences will address squarely the oft-neglected issues of risk allocation and
accountability.
The proposed study will focus on the issues raised above. It will review the experience of
Thailand in private participation in infrastructure financing, examine the contributing factors to
the success and failure, and identify the feasible PPP strategies—especially key elements
required for a conducive policy environment where private financing of infrastructure could
yield significant and sustainable benefits. The study process would include diagnostic analysis,
capacity building activities, and consultative and dissemination workshops with key stakeholders
(including users, government, private investors, and development partners). The study may be
undertaken in the second year of the CDP-INFRA.
3. Knowledge sharing seminars on international best practices
The topics would be determined on the need basis, and may include the following: project cycle,
infrastructure financing, environmental and social safeguard, stakeholder involvement in
infrastructure, and sub-national government financing. The seminars would be arranged on the
basis of the availability of expert speakers.
Annexes Page Thailand
VI
ANNEX 2: Background and scope of work for Component 2: Technical
support for renewable energy development and energy efficiency
Background
In the wake of increasing oil prices, Thailand faces a new challenge to improving its energy
development strategy. Like many other countries, Thailand is a net oil importer, but has started
to feel the need to shift away from oil dependency and achieve a more efficient utilization of
energy. Thailand will have to carefully plan and strategize its next move to achieve better
energy security.
Thai energy consumption relies mostly on fossil fuels. Biomass takes up about 16-17 percent of
the total energy consumption in 2004, and both fossil fuels and biomass together take up more
than 98 percent of primary energy consumption (PEC). In terms of final energy consumption
(FEC), fossil fuels are still the main component followed by biomass (17.1 percent) and
electricity (16.1 percent).
The trend of the FEC by sector has been steady in both its increases as well as its proportion.
Transportation and industrial sectors are the main consumers (37.1 percent and 36.6 percent
respectively in 2004). In terms of electricity generation, natural gas has become the main source
followed by coal and lignite. Hydro source and fuel oil has played a smaller role than before.
There are several critical energy problems for Thailand. First, Thailand has limited indigenous
fossil fuel reserves. The main fossil fuel resources are natural gas and lignite. Natural gas will
last approximately another 25-30 years at the current utilization rate, and lignite approximately
60-100 years. The second problem is that Thailand has been unable to add more indigenous
energy resources to satisfy demand. This includes hydropower and lignite sources. The main
obstacle to these resource-related projects is public resistance. Third, renewable energy‘s
contribution to commercial demand is not significant. Due to its low-capacity nature, biomass,
solar power, and wind turbine systems cannot significantly support the commercial and industrial
demands. Last, but not least, rising oil prices have put more and more pressure on the Thai
energy sector in terms of not only production costs, but also on the country‘s current account
deficit.
With energy security as the ultimate goal, there are two main targets, as follows: (1)
improvement of the energy mix (to depend less on crude oil imports) and (2) improved energy
efficiency.
(1) Improving energy mix. Two key questions should be answered. Firstly, what energy sources
should be selected to replace crude oil and/or any other energy imports? Secondly, how should
the introduction of new energy sources and decommission of the imported sources (crude oil) be
carried out?
(2) Improving energy efficiency. Thailand‘s energy intensity, that is, the ratio of energy
consumption to GDP, is approximately 1.4, which is quite high. Thailand‘s target is to make this
CDP-Infrastructure Annexes Page
VII
ratio one-to-one with the GDP. The important question is ―how?‖ in terms of behavior,
regulation, and technology adoption.
Although some energy efficiency improvement activities can be encouraged and implemented
quickly, the improvement of the energy mix requires careful planning based on careful analytical
work. It would take substantial time and resource inputs to achieve the desirable changes in the
energy mix. It is unadvisable to go through the trial-and-error process often. In addition,
Thailand has not compiled any solid energy strategy other than the use of demand management
and energy efficiency programs.
The National Economics and Social Development Board (NESDB), the country‘s planning
agency, is trying to answer these important questions through analytical work in order to set forth
the energy strategic plan for Thailand‘s sustainable development in the longer run. The World
Bank is requested to provide technical support on the basis of a NESDB-World Bank knowledge
partnership.
Main issues
This section aims to elaborate more on the two targets mentioned earlier. The main issues
involve the following elements:
(1) The selection of alternative energy sources. It is an important task to determine which
energy resources should be selected to replace crude oil. The selection criteria can be
based on resource availability, production potentials, extraction and utilization costs, and
the long-term sustainability of the resources themselves.
(2) Policies for achieving targeted energy mix and energy efficiency. There are many options
in terms of policy choices, as well as some innovative and new ideas. But it is important
to be able to identify policies that have a potential of success. The factors surrounding
the policy issues are, as follows:
a. Determination of targets
b. Policy choices
c. Monitoring and evaluation mechanism
d. An ability to replicate and expand successful programs
(3) Cost and feasibility of introducing alternative energy. Success is eventually determined
by an increased share of domestic, perhaps renewable, energy sources and lower energy
intensity; that is, higher efficiency. These goals cannot happen if the energy producers
and consumers think it is not cost-efficient or feasible for them to adopt new energy
sources or purchase more energy-efficient products. This will certainly add cost to the
government, who will have to determine the feasibility at the macro-level.
Thailand has been promoting energy efficiency through demand management, and on a
voluntary basis, which has not been really successful. The demand and behavioral approach
alone cannot sufficiently tackle the aforementioned issues. Supply management and
enforcement are also required to a certain extent. Being relatively inexperienced in the approach,
Annexes Page Thailand
VIII
Thailand requires international experience and expertise in order to ensure good initial planning
and, consequently, smooth implementation.
Government initiatives
A few initiatives have been taken regarding the energy issues. Here are recent governmental
policies and programs put in place related to renewable energy:
- Energy Conservation (ENCON) program in 1994. The program promoted renewable
energy through funding support, such as a subsidy to biomass projects and pig farm
biogas projects.
- Ministry of Energy’s Strategy for Competitiveness in 2003. The Ministry aimed to
promote more efficient use of energy in the transport sector and conservation in
industrial sector. The goal was also to increase the share of renewable energy from 0.5
percent in 2002 to eight percent in 2011 of commercial primary energy by enforcing the
Renewable Portfolio Standard (RPS, which basically requires power plants to have four
to five percent of their generating capacity come from renewable sources) and other
fiscal incentive measures.
- New Energy Strategic Plan in 2005. The cabinet approved the new plan with aggressive
targets for renewable energy. About 25 percent of oil for the transportation sector
should be replaced with the use of natural gas, gasohol, and biodiesel by 2009. In
particular, biodiesel should replace ten percent of diesel consumption by 2012. And, the
agricultural sector will increasingly play an important role in energy supply.
Although actions have been taken, more is needed. It is crucial for Thailand in the longer term to
have well-defined energy strategies in term of both appropriate energy mix and energy
efficiency.
Biomass: Current situation, potential, and challenges
The main biomass resources in Thailand consist of residue from forest plantations, agricultural
sectors, and wood industries, as well as biomass for ethanol and biodiesel production (e.g.
cassava, sugarcane, and palm oil). Agro-industry biomass waste and municipal waste can also be
used for energy production.
The current biomass situation can be viewed from three perspectives: traditional use, power
generation, and biofuel for transport.
(1) Traditional use. Although biomass currently accounts for 16 percent of Thailand‘s energy
use, most biomass is used in the form of traditional energy, that is, cooking and
residential heating. About 65 percent of residential energy use is from wood and
charcoal. So, significant improvement can be made to overall efficiency in this area.
(2) Power generation. The government has been promoting biomass in power generation
through small power producers (SPP) and very-small power producers (VSPP) programs.
For example, bagasse has been used to generate electricity for sugar mills.
CDP-Infrastructure Annexes Page
IX
(3) Biofuel for transport. Both gasohol (E10: mixing 90 percent gasoline with 10 percent
ethanol) and biodiesel (B3: three percent of biodiesel in diesel) has been promoted using
policies such as excise tax exemption and pricing policy. About 25 percent of ULG95 has
already been replaced by gasohol.
One of Thailand‘s opportunities for biomass as an energy source lies in the supplies. Thailand, as
an agricultural country, is well-endowed with biomass resources. The potential in this aspect
includes better land management, genetic improvement of crops, and regulated crop growing
areas.
For power generation, several methods have been analyzed for their potential; the methods are
biogas (365 MWe), biomass residues (4400 MWe), short-rotation trees (1400-12000 MWe), and
municipal solid waste (400 MWe).
In terms of the potential in the transportation sector, ethanol can be produced up to 2,800,000
liter/day from cassava and molasses. Up to 400,000 liter/day of biodiesel can be produced based
on surplus palm oil. More can be produced if there is an increase in oil palm production.
The items above are so-called technical potential or opportunities. The real potential can be
much lower due to several barriers and obstacles. Some challenges to overcome are the
following:
(1) Feedstock problems. It is difficult to collect large quantities of biomass residue, and it is
also costly to transport them. There is also fluctuation of crops‘ annual yields, which
depend on climate and many other factors. The fluctuation will be reflected in the energy
price.
(2) Competing uses. Biomass residues are widely used for many other purposes. Therefore,
the cost of biomass energy will be affected by those industries. Some examples of
competing uses are wood used for particle board, palm oil used in the food and cosmetic
industry, and cassava, which is used as a starch and in animal feeds.
(3) Institutional barriers. Institutional barriers exist because of poor coordination and
conflicting policies among government agencies, implementation difficulties, and the
lack of a well-defined regulatory body.
(4) Improvement of promotional mechanisms. Incentive schemes such as tax incentives and
subsidies can be improved, also in need of improvement are supporting measures for
pricing decisions and creation of public awareness.
Other renewable energy sources
Although biomass has been the major renewable energy contributor, other renewable energy
sources are also consistently contributing to the energy pool. The development of these energy
Annexes Page Thailand
X
sources has not been significant due to economic and social reasons, but their potential should
not be neglected.
- Solar energy. Due to climate and location, Thailand is a promising place for solar
energy. The installation of solar energy systems started in residential areas, not in the
commercial sector. The prospect for solar energy lies mostly in remote areas with
small-scale power demand. The aim for solar energy development is to satisfy the
consumption demand; for example, hospitals, homes, and buildings, rather than to
support production. EGAT and EPPO are responsible entities for solar energy
development.
- Mini- and micro-hydropower. There are several small hydropower plants in the
northern part of Thailand. Twenty-five of these were built by the Department of
Alternative Energy Development and Efficiency or DEDE with total capacity of 132
MW. The Provincial Electricity Authority (PEA) is also involved with 3.8-MW small
hydropower plants. Recently, hydropower energy has been unpopular due to negative
environmental and community impact.
- Wind energy. Thailand‘s wind velocity is very low. A feasibility study has been done,
to determine whether Thailand can utilize wind energy for power generation in a
serious manner.
- Geothermal. There is only one geothermal power plant in Thailand (located in Chiang
Mai with 300-kW capacity).
Thailand has abundant renewable energy sources, particularly biomass. But there is much to be
done in order to fully utilize the potential. The Government has taken several initiatives with few
significant results. Careful planning and results-based actions are needed for Thailand to improve
its energy mix and energy efficiency.
Approach and strategy
Renewable energy is included in the CDP-INFRA, the country development partnership program
between NESDB and the Bank for the infrastructure sector. While NESDB has committed to
include energy policy in the national plan, the Bank will support NESDB with analytical
expertise and international experiences. This will assist NESDB to determine the direction and
approach of the national energy policy, which is expected to kick-start renewable energy and
energy efficiency programs and projects for Thailand.
World Bank support under the CDP-INFRA
The objective of this is to collaborate with NESDB and other sector agencies in exploring
technological and policy options for the development of renewable energy sources in order to
ensure long-term energy security and sustainability. The activities involve analytical works and
knowledge sharing, particularly in the form of studying international experience.
CDP-Infrastructure Annexes Page
XI
Starting with the Renewable Energy and Energy Efficiency Workshop held in late August 2006,
NESDB and the Bank had follow-up dialogue to decide on the action plan and the way forward.
There are four areas of focus as follows:
1. Development and maintenance of energy efficiency database in Thailand. While the data
are largely available, they are scattered throughout different agencies. Consolidation and
collection of data is necessary. NESDB will engage a consultant to build an energy-
sector database for Thailand, and the Bank primarily will provide advisory support. In
addition, the Bank facilitated and partially financed NESDB to send three staff to
participate in the international workshop on Best Practices in Institutional Frameworks
for Energy Efficiency Implementation.
2. Carbon finance. NESDB is interested in more information on carbon finance and the
possibility of Thailand benefiting by selling carbon credits under the Kyoto Protocol. It is
proposed to produce an exploratory paper focusing on the process for Thai companies
and banks to register for and obtain carbon credit agreements. Workshops and other
activities can follow as a catalyst for Thailand‘s further involvement in the clean
development mechanism (CDM) and carbon financing.
3. Bankability aspects of energy-related investment projects. Commercial banks in Thailand
do not have much knowledge and understanding of energy-sector investment.
Furthermore, there may be a number of strict financial sector regulations preventing more
exposure for banks in this sector. Possible activities to encourage the financial sector
involvement includes a workshop or training sessions for Thai banks to become familiar
with energy-sector financing, related risks, and risk mitigating measures.
4. In-depth analysis of energy efficiency and renewable energy targets. NESDB is
concerned with how existing renewable energy targets can be achieved or whether the
current targets are achievable. An analysis of proper targets and potential is anticipated.
In addition, the Bank has been supporting NESDB in exploring the experience in other countries
with the formulation of energy policy. This is to widen the perspective on what has been done
globally and which strategy can be adapted for implementation in Thailand.
The overall outcome will be the enrichment of NESDB and its staff with increased knowledge
and a clearer picture of Thailand‘s energy potential, and more importantly, various options and
approaches for energy sector development.
Draft terms of reference for consultant study on the Government’s energy policies and
private financing on renewable energy projects
Background
While Thailand has instituted important policies to encourage financial sector participation in
the financing of renewable energy and energy efficiency projects, the level of investment is
not enough to achieve a target of eight percent electricity generated from renewable
resources. The WB, as part of its infrastructure country dialogue with Thailand, is in
discussion with NESDB to develop an integrated strategy, which will require initiatives on a
number of fronts, including utility regulation, economic analysis of the costs and/or benefits
Annexes Page Thailand
XII
of enhanced RE and EE investments. Based on such an analysis a possible incentive structure
can be accomplished. One of the possible incentives will most likely come from the
enhancement of financing for EE and RE investments. To analyze the current financial
incentives and recommend improvements, the WB requires short term consultants, working
in a team of two, with local WB Bangkok office support as needed, to interact with the
financial sector on financing issues related to renewable sources, energy efficiency, and
carbon. The purpose of this assignment is to address the current lack or minimal level of
private sector involvement in the area of sustainable energy in Thailand. The team will
review policy, including current subsidies and any guarantees offered by the Government, for
example, the Thailand Energy Efficiency Revolving Fund, and the regulatory framework, to
identify specific barriers to private sector investment, and propose changes as needed. The
team will consult with policy makers and local banks and will also organize a series of
workshops. These workshops will present the business case for sustainable energy finance in
Thailand and the involvement of the private sector and private project financing banks. The
workshops will also be used to gain valuable feedback from the participants. This feedback
will be used in recommendations to the Thai Government.
Tasks
The STC‘s tasks comprise a review of policy documentation; discussions with WB/IFC staff,
local FIs, key officials in the Energy Policy and Planning Office (EPPO), EGAT, Thai
Bankers Association, ASEAN Banks Association, Central Bank of Thailand; consultation
with other IFIs where appropriate; preparation and delivery of briefing sessions/workshops;
and reporting:
(1) Objective 1: Assess current energy policy and other documents to identify specific
barriers to private sector financing of sustainable energy.
(2) Objective 2: Discussions with Thai Government, utility officials and others to gain a
clearer understanding of the current market
(3) Objective 3: Preparation and delivery of a draft report presenting findings and
recommendations
(4) Objective 4: Preparation and delivery of a series of up to five two-day seminars or
workshops on sustainable energy financing and potential options, and seeking
feedback from the market.
(5) Objective 5: Production of the draft final report containing succinct and practical
recommendations to address any gaps in energy policy or practice.
Deliverables The deliverables for this assignment are:
1. Draft paper for WB and NESDB following meetings and policy review assessment.
2. Series of up to five briefing seminars/workshops in Bangkok for local FIs, central bank,
policy makers.
3. Final report after comments received containing concise recommendations as needed on
policy and investment conditions required to support and encourage more private sector
investment in sustainable energy.
Location
The assignment will be undertaken in Bangkok, and the consultant‘s office base as needed.
Schedule The term of the STC contract is a maximum of 45 days to be undertaken between January
10th and March 31st, 2007.
Time allocation:
CDP-Infrastructure Annexes Page
XIII
Objective 1: 5 days
Objective 2: 5 days
Objective 3: 5 days
Objective 4: Preparation of materials 5 days, Organization prep. 4 days, Delivery 5x2 – 10
days
Objective 5: 7 days
Travel: 4 days inclusive of travel, meetings and reporting.
Draft terms of reference for consultant study on strategic road-mapping exercise for
promoting energy efficiency and renewable energy
Background
Thailand continues to suffer from relatively high energy intensity across sectors, high energy-
GDP elasticity, a low share of renewable energy sources in its energy mix, and very high
dependence on oil. Various initiatives of the Government since the 1990‘s have envisaged the
importance of these issues, such as the Energy Conservation Program (ENCON) of 1994,
Ministry of Energy Strategy for Competitiveness in 2003, and the New Energy Strategic Plan
of 2005. While several initiatives and policies, especially in the area of promoting demand
side energy efficiency measures (e.g., the refrigerator labeling program, Energy Efficiency
Revolving Fund, and the Thai DSM Program) and Renewable Portfolio Standards are
innovative, their actual success in catalyzing overall improvements in the share of renewable
energy and energy efficiency or in transforming these markets in a sustainable manner has
been quite limited. Commercially financed investments in the sustainable energy sector
remains low as institutional, regulatory, financial barriers and lack of capacity, particularly in
the financial sector, continue to prevail.
The targets set up by the Government of Thailand under its National Energy Policy are
ambitious: Reduce total energy consumption by 20 percent by 2009; increase the share of
renewable energy to eight percent of total energy consumption; reduce energy-GDP elasticity
from 1.4 to 1.0 by 2011; reduce oil use in transportation by 25 percent by 2009; reduce oil
consumption in industrial sector by 25 percent by 2008; reduce energy consumption in
household sector by 10 percent, starting June 2005; and reduce energy consumption in public
offices and buildings by ten to 15 percent immediately. It is unclear how these targets will be
achieved, therefore it is necessary to develop an integrated energy sector policy for promoting
renewable energy and energy efficiency in a strategic and systematic manner.
The World Bank, through its dialogue with the Government of Thailand under the country
development partnership on infrastructure, is in discussions with the National Economic and
Social Development Board (NESDB) to carry out a strategic road-mapping exercise for
promoting energy efficiency and renewable energy. This exercise would lead to a
blueprint of a comprehensive initiative that relies on a number of fronts: (i) regulatory
policies and programs; (ii) financial incentives, including leveraging carbon finance; (iii)
institutional framework, (iv) legislations; and (v) capacity building. The approach will be to
look at the issues in a holistic manner with a view to scale up in both size and scope the
programs and policy practices that have been successful, and to introduce measures for new
and innovative policy and market-based mechanisms to further increase energy efficiency
and renewable energy investments.
One of the key areas of focus will be the development of a robust system of tracking
sustainable energy indicators covering both renewable energy and energy efficiency. For
the energy efficiency indicators, the suggested framework will cover various supply
(energy/fuel) sources, consumption sectors and end-use levels. They will move beyond
macro-level analyses to the end-use level such as buildings, industry, and transport, to
Annexes Page Thailand
XIV
promote understanding of the interaction between the drivers of energy use, the energy and
environmental performance of end-use technologies, and structural change. The separation
of impacts on energy use from changes in activity, structure and intensity is critical for policy
analysis as most energy-related policies target energy intensity and efficiency, often
promoting new technologies. Accurately tracking changes in intensity and share of renewable
sources helps measure the effects of these new technologies. Factoral decomposition where
changes in energy use per sector can be analyzed in terms of sectoral activity, sectoral
structure, and the energy intensity of each of the sub-sectors. This analyses can be done using
standard techniques such as the Divisia Index method. Depending upon the context of the
analyses, this decomposition can be applied at national, sectoral, or sub-sectoral level, or at
aggregated energy level or by fuel type. The work done on energy efficiency indicators could
draw upon the World Bank‘s current initiative on energy efficiency indicators in G5 countries
and similar work done in Thailand under the aegis of the APEC Energy Efficiency Indicators
Project in 2000-2001. The Renewable Energy Toolkit (developed by the World Bank) is also
a useful resource for developing the framework for renewable energy indicators.
A harmonized framework of sustainable energy indicators will help the Government in three
aspects: (i) allow comparisons between countries of their relative situations, at national as
well as sub-regional levels and by fuel types and sectors; (ii) prioritize actions to be taken for
energy efficiency and renewable energy policy development; (iii) monitor and evaluate the
impact of sustainable energy policies; and (iv) understand and communicate the impact of
sustainable energy policies, legislation and institutional development, how these are turned
into actions on ground and how they are implemented.
In the above context, the World Bank requires the services of short term consultant(s)
(STCs) with international experience to review and analyze the current policies, programs,
institutional framework, and sectoral targets in place in Thailand, and to recommend actions
required under an integrated and strategic roadmap for scaling up energy efficiency and
renewable energy investments.
The STCs will be working in a team, along with the World Bank Washington and Bangkok
office support as needed, and in close coordination with NESDB and other relevant local
counterparts and experts. The STCs team will review current policies, regulatory framework
and programs pertaining to renewable energy and energy efficiency markets and analyze
barriers to their scale up vis-à-vis the targets established under the National Energy Program,
with the objective of developing a strategy for ensuring long-term energy security and
sustainability. The team will consult with relevant policy making and planning agencies,
EGAT, local financial sector, National Statistics Office, ESCOs and energy practitioners, and
other stakeholders. They may also have to assist in organizing a study tour and provide inputs
to the development and preparation of relevant workshops. The STCs team will coordinate
with the other STC working on the financial sector issues, as and when required.
Tasks
The STCs‘ tasks comprise comprehensive review of documentation and current status,
discussions with key officials in the Energy Policy and Planning Office (EPPO), DEDE,
EGAT, Thai financial sector, ESCO industry, and with local energy experts, bilateral donors,
and other relevant stakeholders where appropriate, to prepare and deliver reports, and inputs
for briefing sessions/workshops, and help organize a study tour. The specific tasks are
described below in detail:
Task 1: Review and analyze current relevant policies, regulatory and programs across
various sectors (electric power, industry, household, commercial and transportation), and
approaches to developing system of indicators related to energy efficiency and renewable
energy and assess and analyze specific barriers to scaling up these investments vis-à-vis the
CDP-Infrastructure Annexes Page
XV
targets specified under the National Energy Policy.
Task 2: Preparation and delivery of a draft report on a strategic roadmap for promoting
energy efficiency and renewable energy building upon successful programs and practices
within Thailand and new approaches based on international best practices and knowledge,
and drawing upon findings and recommendations from Task 1. This document will also
include recommendations on institutional aspects.
Task 3: Preparation and delivery of a robust framework of sustainable energy indicators,
covering both renewable energy and energy efficiency, based on international best practices
using various metrices used across energy or fuel sources, consumption sectors and end uses.
The output from this task would be integrated into the draft report on the Strategic Roadmap
for Energy Efficiency and Renewable Energy, under Task 2.
Task 4: Production of draft final report on Strategic Roadmap for Energy Efficiency and
Renewable Energy (integrating inputs from Task 2 and 3) containing succinct and practical
recommendations, to address any gaps in energy policy or practices, linked to targets at
national/macro, sectoral and end-use levels and pertaining to the objectives of the National
Energy Policy.
Deliverables
The deliverables for this assignment are:
Draft report on a new Strategic Roadmap for Energy Efficiency and Renewable Energy
for the World Bank and NESDB to review, following meetings and review of policies,
programs and targets, and including recommendations on policies and regulations, programs,
and framework for developing and tracking energy indicators (linked to Tasks 1, 2 and 3
above).
Input to preparation of associated study tours and into relevant seminars/workshops in
Bangkok to be held along with local FIs, policy makers, planning organizations, ESCOS, and
other stakeholders.
Final report after comments received containing concise recommendations as needed on
policy and programmatic approaches required to support the scaling up of energy efficiency
and renewable energy, and to developing and maintaining a robust framework of energy
efficiency indicators.
Location
The assignment will be undertaken in Bangkok, and in the consultants‘ respective offices as
needed.
Schedule
The term of the STCs‘ contract will be a maximum of 60 days to be undertaken between
January 15 and April 30, 2007, and expected to be split between two STCs. The estimated
break-down of the level of effort required for the specific tasks are as follows:
Task 1: 10 days
Task 2: 15 days
Task 3: 10 days
Task 4: 10 days
Associated travel: 15 days inclusive of travel and meetings.
Annexes Page Thailand
XVI
ANNEX 3: Background and scope of work for Component 3: Urban
Transport Development Partnership (UTDP) jointly supported by ADB, AFD,
JBIC, and World Bank Group
Background
The Government of Thailand is considering the implementation of three new or extended mass
rail transit (MRT) lines in the Bangkok metropolitan region with a total investment of at least
Baht 160 billion (or about $4 billion) over the next few years.
The objective of the Government in making these investments is to provide an extensive MRT
network covering the entire metropolitan area. This is expected to increase public transport
ridership and reduce the use of private cars with related improvements in mobility, air quality
and congestion. However, a series of technical, administrative, financial, institutional and
regulatory issues remain unresolved, including project prioritization/coordination and integration
with different public transport modes and providers.
In particular, the Government wishes to improve fare integration among existing MRT
concessions, extensions to them and new lines in order to provide fares that are consistent,
understandable, easy to pay, and more affordable; thus, attracting even higher ridership. To
facilitate public transport integration and development, the Government is considering the
creation of a Bangkok integrated transport authority (BITA) as the single agency in charge of
planning, priority-setting, coordination, integration, regulation, and management for all mass
rapid transit systems. However, the exact functions and the structure of the BITA and its
relationships to other, existing institutions remain unresolved.
The Government has expressed interest in working with the international development agencies
(ADB, AFD, JBIC, and World Bank), both technically and financially, for the development and
management of MRT systems. A TA funded by ADB to advise the Government on the options
of public transport integration was completed in January 2006. At the request of the Government,
an extension of the TA covers the following topics: (i) development of an MRT concession
model; (ii) analysis of options and implications of integrated fares and ticketing; and (iii)
development of an MRT financial model. In addition, ADB, AFD, JBIC and World Bank share
the following understanding that:
(i) There is enormous need for improved public transport in general and MRT in
particular in the Bangkok metropolitan region
(ii) The technical advisory and financial support from international development
agencies will yield better results and impact if the agencies collaborate with their
Thai partners;
(iii) An Urban Transport Development Partnership (UTDP), defined in more detail
below, is a desirable means for the external agencies to collaborate with their Thai
partners on dealing with MRT policy, financing, institutional, regulatory,
management and technical issues.
CDP-Infrastructure Annexes Page
XVII
(iv) Due diligence work is required to inform decision making on the financing of
future MRT improvements. The required work could be carried out through the
proposed UTDP.
Goal and objectives of the proposed UTDP
The ultimate goal of the UTDP is to improve the effectiveness, efficiency, and sustainability of
the Bangkok metropolitan Region‘s multi-modal transport system. To this end, the UTDP will
provide support to the Government‘s development and implementation of urban transport
strategies, policies, plans, programs, projects and related regulatory and institution-building
activities. Objectives consistent with this basic goal include the following:
Making Bangkok‘s public transport system more accessible, available, secure and
safer for residents of all income groups through increases in service quality, quantity
and coverage and reductions in costs and fares;
Minimizing the financing costs and implementation risks of planned MRT
improvements;
Making the institutional, integration, coordination and other changes necessary to
guarantee the maximum benefit from currently operating and future MRT lines.
UTDP framework: Basic approach and strategy
The UTDP will be a knowledge-based partnership, providing analytical, advisory, training and
other services related to the Government‘s urban transport development agenda, especially for
public transport. It will be led by the Government with the active cooperation of international
development agencies including ADB, AFD, JBIC and the World Bank as well as other
interested agencies. It will also serve as a vehicle for engaging other direct stakeholders such as
local officials from the Bangkok metropolitan area, civil society, the private sector, and others in
planning, priority-setting, design, implementation, and monitoring.
Potential scope of work
A number of knowledge sharing activities could be included under the UTDP. These activities
will help the Government address both short and longer term issues. The key short-term issues
are mainly related to the implementation of Government‘s MRT projects, and include but are not
limited to the following:
a) Integration and coordination of various public transport modes and providers;
b) Proper allocation of risks among the public and private parties under public-private
partnerships (PPP);
c) Strengthening of the project implementation processes and procedures, to conform to
high technical, economic, project/program/financial management, and other safeguard
standards.
In the longer term, a number of outstanding institutional, planning, priority-setting, financing,
regulatory, and management issues should be addressed in order to achieve more efficient,
Annexes Page Thailand
XVIII
affordable and sustainable urban transport. This requires the development of a long-term urban
transport sector strategy and the formulation of a specific implementation plan for it.
A draft matrix indicating activities, objectives, inputs and expected outcomes is provided below.
The list of issues and related activities can be expanded or consolidated upon further discussions
between the Government and the international development institutions.
CDP-Infrastructure Annexes Page
XIX
T
enta
tiv
e L
ist
of
Pri
ori
ty U
TD
P S
up
port
Act
ivit
ies
Ou
tcom
es
Imp
rov
ed u
rban
pub
lic
tran
spo
rt s
erv
ices
(in
term
s o
f ef
fici
ency
an
d
affo
rdab
ilit
y)
in t
he
Ban
gk
ok
met
ropo
lita
n
area
th
rou
gh
an
inte
gra
ted
urb
an
tran
spo
rt m
anag
emen
t
stru
ctu
re a
nd
a c
lear
reg
ula
tory
an
d p
ub
lic-
pri
vat
e p
artn
ersh
ip
fram
ewo
rk
Mo
re e
ffic
ien
t,
effe
ctiv
e an
d
affo
rdab
le p
ub
lic
tran
spo
rt
Ou
tpu
ts
Rec
om
men
dat
ion
s fo
r
pu
bli
c tr
ansp
ort
/mas
s
rail
tra
nsi
t in
teg
rati
on
acti
vit
ies;
Tra
inin
g (
and
stu
dy
tou
rs)
for
the
BIT
A
and
ass
oci
ated
agen
cies
;
Rec
om
men
ded
tech
nic
al a
nd
adm
inis
trat
ive
pro
cess
es a
nd
pro
cedu
res
for
new
BIT
A;
Rec
om
men
ded
pu
bli
c
tran
spo
rt f
are
stru
ctu
re
and
su
bsi
dy
all
oca
tion
po
licy
and
imp
lem
enta
tio
n
mec
han
ism
s.
Inp
uts
Po
licy
ad
vic
e by
AD
B,
JBIC
an
d W
orl
d B
ank
thro
ugh
TA
s;
Tra
inin
g a
nd
oth
er
kn
ow
led
ge
shar
ing
acti
vit
ies
Ob
ject
ives
To
red
uce
th
e in
stit
uti
on
al
frag
men
tati
on
in
urb
an
tran
spo
rt t
hat
has
bec
om
e th
e
mo
st s
ign
ific
ant
bar
rier
to
th
e
pro
vis
ion
of
sust
ain
able
and
affo
rdab
le u
rban
pu
bli
c
tran
spo
rt s
erv
ices
in
th
e
Ban
gk
ok
met
ropo
lita
n a
rea.
To
en
han
ce M
OT
an
d B
ITA
‘s
inst
itu
tio
nal
cap
acit
y f
or
urb
an
pu
bli
c tr
ansp
ort
pla
nn
ing
,
pri
ori
ty s
etti
ng
, f
inan
cing
,
man
agem
ent
an
d r
egu
lati
on
;
To
ad
vis
e th
e g
ov
ern
men
t o
n
an i
mp
rov
ed p
oli
cy f
ram
ewo
rk
for
pu
bli
c tr
ansp
ort
pri
cing
and
sub
sid
ies
and
pu
bli
c-p
riv
ate
par
tner
ship
s
Act
ivit
y
1.
Kn
ow
led
ge
sha
rin
g
an
d t
ech
nic
al
sup
po
rt
rela
tin
g t
o p
ub
lic
tra
nsp
ort
an
d M
RT
inte
gra
tio
n a
nd
coo
rdin
ati
on
, a
s w
ell
as
cap
aci
ty b
uil
din
g
for
the
po
ssib
le n
ew
Ba
ng
ko
k i
nte
gra
ted
tra
nsi
t a
uth
ori
ty
(BIT
A)
an
d a
sso
cia
ted
ag
enci
es
Annexes Page Thailand
XX
Ou
tcom
es
A m
ore
eff
icie
nt
urb
an
tran
spo
rt i
nfr
astr
uct
ure
pro
ject
del
iver
y p
roce
ss t
hat
foll
ow
s in
tern
atio
nal
go
od
pra
ctic
es f
or
econ
om
ic,
fin
anci
al,
env
iro
nm
enta
l an
d
soci
al s
ust
ain
abil
ity
req
uir
emen
ts
A m
ore
su
stai
nab
le,
effe
ctiv
e an
d
effi
cien
t u
rban
tra
nsp
ort
sy
stem
sup
po
rted
by
:
an i
mp
rov
ed g
ov
ern
ance
stru
ctu
re;
mo
re c
apab
le i
nst
itu
tio
ns;
imp
rov
ed p
lann
ing
, p
rio
rity
sett
ing
, d
evel
op
men
t an
d
imp
lem
enta
tio
n p
roce
sses
and
pro
ced
ure
s;
pre
dic
tab
le,
acce
ssib
le
fin
anci
ng
mec
han
ism
s th
at
pro
vid
e th
e pro
per
ince
nti
ves
fo
r ef
fici
ency
an
d
effe
ctiv
enes
s.
Ou
tpu
ts
Kn
ow
led
ge
dis
sem
inat
ion
an
d
tran
sfer
to
rel
evan
t
Go
ver
nm
ent
and
lo
cal
agen
cies
, st
ate
ente
rpri
ses,
an
d o
ther
stak
eho
lder
s;
Act
ion
pla
ns
for
imp
rov
ed d
eliv
ery
syst
em
A l
on
g-t
erm
urb
an
tran
spo
rt s
trat
egy
do
cum
ent;
A s
trat
egy
imp
lem
enta
tio
n p
lan
;
Imp
rov
ed u
rban
tran
spo
rt p
lann
ing
an
d
man
agem
ent
cap
abil
itie
s, i
ncl
ud
ing
the
use
of
stat
e-o
f-th
e-
art
pla
nn
ing
to
ols
.
Inp
uts
Tra
inin
g a
nd
cap
acit
y
bu
ild
ing
fo
r p
roje
ct
iden
tifi
cati
on
,
eval
uat
ion
and
pri
ori
tiza
tio
n;
Th
e co
op
erat
ive
asse
ssm
ent
of
coun
try
syst
ems
for
pro
cure
men
t, f
inan
cial
,
man
agem
ent,
pro
gra
m/p
roje
ct a
nd
po
rtfo
lio m
anag
emen
t,
and
en
vir
onm
enta
l
and
so
cial
saf
egu
ard
s
TA
o
Inte
rnat
ion
al
exp
ert
adv
iso
ry
serv
ices
o
Sem
inar
s an
d
wo
rksh
op
s
Stu
dy
to
urs
Tra
inin
g
Ob
ject
ives
To
id
enti
fy m
ajo
r
bo
ttle
nec
ks
and
def
icie
nci
es i
n t
he
pro
gra
m a
nd
pro
ject
del
iver
y
syst
em;
To
su
pp
ort
inst
itu
tio
nal
an
d
leg
al c
han
ges
and
cap
acit
y
enh
ance
men
t fo
r
red
uci
ng
adm
inis
trat
ive
tim
e
and
co
st a
nd
rem
ov
e b
ott
len
eck
s
and
def
icie
nci
es
To
lay
a s
trat
egic
fou
nd
atio
n f
or
the
lon
g-t
erm
sust
ain
able
dev
elo
pm
ent
of
Ban
gk
ok
‘s t
ran
spo
rt
syst
em;
To
pro
vid
e a
det
aile
d r
oad
map
for
the
ph
ased
imp
lem
enta
tio
n o
f
the
stra
teg
y.
Act
ivit
y
2.
Su
pp
ort
th
e im
pro
vem
ent
of
MR
T p
roje
ct
imp
lem
en
tati
on
pro
cess
es
an
d p
roce
du
res
3.
Su
pp
ort
th
e d
evel
op
men
t
of
a l
on
g-t
erm
urb
an
tra
nsp
ort
str
ate
gy
an
d a
n
imp
lem
en
tati
on
pla
n f
or
it
CDP-Infrastructure Annexes Page
XXI
Terms of reference for consultant study on strategic roadmap for urban
transport development in the Bangkok metropolitan area
Background
The Government of Thailand (GOT) plans to implement five new or extended mass rail transit
(MRT) lines in the Bangkok metropolitan area in the next five to six years. The projects, with a
total length of 118 km and an estimated total investment of around US$4.5 billion, aim to
increase public transport ridership and reduce the use of private cars with related improvements
in mobility, air quality, congestion and fuel consumption. To achieve the maximum outcomes
possible from the heavy investment, it is recognized that different transport modes and services
should be fully integrated, and a series of policy, planning, institutional, and regulatory issues
should be resolved progressively to enable the integration and efficiency improvement of all
transport services.
International financial institutions (IFI), including ADB, JBIC, World Bank, and most recently
AFD, have joined effort to support the GOT‘s urban transport development agenda under an
Urban Transport Development Partnership (UTDP). The UTDP is a knowledge-based
partnership, providing technical advisory support to the GOT‘s development and implementation
of urban transport strategies, policies, plans, programs, projects and related regulatory and
institution-building activities. The ultimate goal of the UTDP is to help improve the
effectiveness, efficiency, and sustainability of the Bangkok metropolitan region‘s multi-modal
transport system.
Over the last 12 months, ADB has provided TA to advise the GOT on the following: (i) the
options of public transport integration; (ii) development of an MRT concession model; (iii)
analysis of options and implications of integrated fares and ticketing; and (iv) development of an
MRT financial model. Discussion has been on going between the GOT and JBIC on JBIC
concessional loans to finance the priority MRT projects. The World Bank has also provided
advisory services to the GOT on procurement methods and private sector financing modalities.
In the next step, ADB intends to support a TA on the integrated ticketing system. It is also agreed
among government agencies and IFIs that a study of the strategic urban transport development
roadmap is needed to clarify what other policy, institutional, and investment actions the GOT
should take in the next few years to ensure the high social return of the heavy investment in
MRT and the significant improvement of urban transport performance in the Bangkok
metropolitan area. The World Bank has agreed to support consultant services required for the
study. The following sections specify the terms of reference for the proposed consultant
services.
Objectives of the consultant services
The primary objective of the study is to advise government policy makers specifically on the
existing problems that undermine performance of the MRT investment and generally the breadth,
depth and causes of urban transport problems in the Bangkok metropolitan area, the potential
Annexes Page Thailand
XXII
options, and a practical sequence of actions to address these problems. The specific objectives of
the consultant services are as follows:
(i) update the current situation of urban transport management and performance;
(ii) provide a diagnostic analysis on the key policy, planning, institutional, regulatory and
management issues that would constrain the performance of public transport services
including the heavy investment in MRT system; and
(iii) recommend a strategic urban transport development roadmap, with a menu of
proposed policy and institutional actions, for the government to resolve these issues.
Scope of work
Task 1: Overview of Bangkok transport. This task will provide an updated review of the
multi-modal urban transport situation and trends in the Bangkok metropolitan area, including the
following aspects: general performance of urban transport systems (including both public
transport and street/highway components), institutional set-up, policy and planning, regulation,
management, financing, and on-going policy initiatives. In-depth data analysis is not required,
but the consultants are expected to collect readily available data to the extent possible under the
time provided in the consultant contract.
Task 2: Public transport infrastructure and services. This task will assess the current
performance of the public transport systems including rail, bus, and minibus, and identify and
analyze the key constraints. To the extent possible given data availability, the analysis should be
based on the examination of the operating and financial performance of individual modes, fares
and affordability, accessibility and services, profiles of users, and system performance from the
user (linked trip) perspective.
Task 3. Walkability, bus priority, and private vehicle demand management. This task will
provide a diagnostic analysis how walkability, bus priority, and private vehicle demand
management in the Bangkok metropolitan area affects the performance of public transport
systems.
Task 4: Bus sector modernization and reform issues. This task will summarize progress to
date of bus modernization and reform, identify the key issues, and analyze scenarios for change.
Task 5: Demand growth scenarios. This task will analyze current trends in key factors such as
demographic dynamics, personal income growth, and land use that are known to have an effect
on travel demand, and their implications for the current transport investment plan (including the
MRT system) and management.
Task 6: Options and strategic roadmap. This task will highlight the pros and cons and the
applicability of the technical and policy options to address the urban transport problems in
Bangkok, and synthesize the practical options into a strategic roadmap with menu of proposed
actions.
CDP-Infrastructure Annexes Page
XXIII
Task 7: Role of IFIs and Urban Transport Development Partnership. This task will
describe the role of the IFIs in and the modalities of IFI support to the medium-term urban
transport development under the frameworks of the UTDP.
Methodologies
The study will be based mainly on discussions with relevant government agencies and service
providers, a synthesis of existing studies, and diagnostic analysis of existing data. It is
recommended that the World Bank‘s Thailand—Bangkok Urban Transport Sector Review
(Draft, 1999) be used as a starting point for the sector issues update. Spatial micro-data analysis
and in-depth travel demand modeling are not required. Where appropriate, the World Bank
office will provide necessary technical and logistic assistance to the consultant study activities.
Deliverables
The deliverables include the following: (i) a final report plus necessary annexes; (ii) a power
point presentation of the key findings and messages of the report; and (iii) presentation of the
findings at a technical workshop.
ANNEX 4: Background and scope of work for Component 4: Technical
assistance for capacity building of the National Telecommunication
Commission
Background
The National Telecommunications Commission (NTC) was formally established in October
2004 when the commission members were appointed by His Majesty the King. At about this
time, most of the staff of the former Post and Telegraph Department became the initial staff of
the NTC. Subsequently NTC launched its operations as the regulator of the sector. As a fairly
new organization, the NTC is facing the challenges of initiating a new era of telecommunications
regulation in Thailand that will determine or influence the environment for competition, large
scale private investment, and adoption of new network technologies in the sector. Capacity
building can make valuable contributions to NTC‘s success in meeting the challenges.
NTC-World Bank Knowledge Partnership Program: Phase I
Through funding from the Public-Private Infrastructure Advisory Facility (PPIAF), the World
Bank provided technical support to NTC over the period of 2005-06 on the basis of the Phase 1
Knowledge Partnership Program. The specific activities included the following:
Universal service Consultants provided assistance in assessing different approaches to
advancement of universal service in Thailand.
Interconnection Interconnection is always an important and complex issue in multi-
operator environments, and it is complicated in Thailand because of the concession
arrangements. The consultants suggested alternative ways to address interconnection
issues that NTC could consider, and noted the Canadian Interconnection Steering
Committee that assists in administering the network interconnection.
Competition Competition is a critical way to promote development of the
telecommunications sector and customer interests. Consultants indicated the usefulness
of public consultation on selected topics and indicated that development of the
competition code could be supported by a public consultation process.
Price regulation Consultants reviewed the concept of economically rationale pricing and
discussed the implications of the concept for pricing and regulation in the
telecommunications sector.
Public consultation Consultants noted the usefulness of public consultation on selected
topics and reviewed different mechanisms for public consultations.
Licensing Several sections of the license model from the 2002 PPIAF project were
reviewed, such as licensing fees, emergencies, universal service, licensee‘s obligations to
users, numbering, non-discrimination and fair trading, interconnection, privacy and
CDP-Infrastructure Annexes Page
XXV
confidentiality, cost accounting, access to land and facilities, service interruption, and
compliance.
Training The work on the training program identified several short training classes that
could be considered as part of a broader training program for NTC management and
professional staff.
Other issues include quality of services (QoS), allocating and management of radio
frequency spectrum, and a wide-range of 3G-related issues.
The Phase 1 work has been completed and the second phase of the NTC-World Bank
collaboration is being planned.
NTC-World Bank Knowledge Partnership Program: Phase II
Following the successful progress of the Phase 1 NTC-World Bank Knowledge Partnership
program and further to discussions between the two agencies, it was agreed that they would
continue collaboration into the second phase along the following lines:
The overall focus of the second phase collaboration will be to enable NTC access to
international best practice as the agency addresses important telecom regulatory issues.
The second phase is planned to start on July 1, 2006, and continue until about March or April
2007.
Consultant services required for the second phase will be defined by the NTC in consultation
with the World Bank.
The NTC will entrust the World Bank to manage the consultant services. Subject to NTC
approval of the terms of reference (TOR‘s) for the consultants and the selection of the
consultant, the World Bank will select, engage, contract, pay and supervise the consultants.
NTC will reimburse the World Bank the full cost of these consultants (both fees and
approved travel) according to World Bank payment rates, retroactively. In all consultancies,
the World Bank will finalize the contract with the individual consultant upon the receipt of
NTC letter confirming (a) TOR‘s are agreed, (b) selection of named individual consultant is
agreed, and (c) re-imbursement of fees and approved travel is agreed.
The World Bank will meet the costs of its own staff, both time and travel.
Rationale for inclusion in CDP-INFRA
As the first independent infrastructure regulatory agency in Thailand, the NTC will serve as an
important example for other sectors where reforms are contemplated. The technical support to
the NTC will help provide a positive demonstration effect for other infrastructure sectors.
Moreover, the cost-sharing knowledge partnership model could be applied to newly-established
regulatory bodies.
Annexes Page Thailand
XXVI
The objective is to continue the collaboration with NTC in carrying out its responsibilities by
providing information on international best practice experiences and expertise. This is already
the second phase of the Bank‘s TA to NTC. The activities include the selection and supervision
of consultants in capacity-building activities for the NTC.
In addition, any regulatory agency can tap into the Bank‘s resources. For example, the East Asia
and Pacific Infrastructure Regulatory Forum (EAPIRF), an infrastructure cross-sectoral capacity
building initiative, is a very useful resource for a regulator. Under this initiative, regulators can
enhance their capacity through information exchange and experience sharing.
CDP-Infrastructure Annexes Page
XXVII
ANNEX 5: Background and scope of work for Component 5: Implementation
support for pilot demonstration project for rural water supply and income
generation
Background
Approximately 25,000 Thai villages (consisting of 11.2 million people) do not have a piped
water supply system. In approximately 15,000 of these villages, water supply is considered
inadequate. The Royal Government of Thailand is committed to the provision of village water
supply systems. With public spending of over US$1 billion during the past two decades, about
30,000-40,000 village piped water systems (VPWS) have been installed. Although this is a
major achievement, a significant number of villages will not have a chance to receive a VPWS
within the next five to ten years at the current rate of public spending.
The VPWS program aims to alleviate poverty in the rural villages. However, it is less effective
than expected and largely unsustainable for a number of reasons. The program has been supply-
driven and fully funded by the Government; thus, there is a lack of village ownership of these
water systems. Due to a lack of periodic funding from the Government for maintenance,
maintenance and care of the systems is largely inadequate or lacking. Abandonment often
occurs when the systems fail. The poverty alleviation impact of the public expenditure,
therefore, is unsustainable in many cases.
In recent years, a demand-driven, virtuous circle model for rural water supply systems has been
developed by the Population and Community Development Association (PDA), a well-known
non-governmental organization (NGO) operating in Thailand. The model is designed not only to
meet the village needs for household water, but also to provide agricultural water for income
generation activities, and to assist the villages to build capacity for the management and
maintenance of the systems. The income generation element enables the village households to
pay back the investment needed to create the system. As a result, the private commercial banks
become able to finance the investment on the commercial basis. The capacity building element
ensures the sustainability of the systems through community participation.
Although the virtuous circle approach is viewed as a probable solution, the government does not
appear to be ready to adopt the approach before its effectiveness is proven at scale. Under this
circumstance, the PPIAF funded a consultant study to evaluate the virtuous circle model and
examine its scalability. The report, A Study to Develop a Strategy to Expand Rural Water
Infrastructure within the Restructured Water and Wastewater Sector in Thailand, was completed
in 2004, and provides recommendations to enhance the model and improve its scalability. The
key features of the enhanced model are described below.
The virtuous circle model
The model composes of three key components:
Annexes Page Thailand
XXVIII
1. Hardware The piped water system, to be constructed by contractor selected by the
community, and financed by commercial banks.
2. Financing The construction of the hardware will be financed by loan from private
financial institutions on a commercial/micro-finance basis.
3. Software This includes the community‘s commitment and capability to manage, operate,
and maintain the system. The capability is to be acquired through capacity building
activities supported by the NGO or the Government.
These three components are crucial to the success of the model. The system hardware is
financed by private financiers, and the loan paid back over time by using the majority of the
income generated from the agricultural production activities supported by the water system itself.
The software component is required to help the communities build capacity for the sustainable
management of the water supply system.
The system management activities include the following: (i) managing the financing of the
system; (ii) determining water tariff and collecting fees from households based on the use of
water; (iii) facilitating the agricultural production activities for income generation; (iv) O&M;
and (v) managing the revenue surplus for other community services. The capacity is expected to
be built with the support of NGOs (especially PDA who first piloted the virtuous circle model)
during the pilot demonstration project, and with the support of the government as well at the
scale-up stage.
The features of community participation and income-generation of the virtuous circle model
could be incorporated into the on-going government VPWS program, to improve its
sustainability. The model could also be introduced to other Mekong countries, in rural areas
where the water resources permit.
Pilot demonstration project and its implementation
As the village piped water systems are expected to be financed by the private sector under the
virtuous circle model, the pilot demonstration project will finance the software costs for about 40
selected villages and the dissemination of lessons learned from the project experience for the
purpose of replication and scaling up in both Thailand and other Mekong countries (such as
Cambodia, Lao PDR, and Vietnam).
Key contributors to the project would include the following:
- Communities to build, manage, operate, and maintain the pipe water supply system.
- Private financiers to provide hardware financing.
- Government agencies such as the Department of Groundwater Resources, Ministry of
Natural Resources and Environment, to supervise, oversee and participate in the pilot
demonstration project, to prepare for scale-up by the government. The opportunity of
technical support to the income-generating activities from the Ministry of Agriculture and
Agricultural Cooperatives (MAAC) will also be explored.
CDP-Infrastructure Annexes Page
XXIX
- Implementing organization or a consultant to work on the two following fronts: 1)
facilitate and enhance the community capacity building, and 2) ensure the success of
hardware financing.
- Consultants to design and provide technical supervision to the implementation process,
produce reports to document the findings and blueprints for adoption elsewhere.
- Funding agency such as PPIAF to provide software funding in the pilot project.
- The World Bank to execute the PPIAF funding and supervise the project design,
implementation, monitoring and evaluation, and dissemination.
The overall project concept is illustrated by the following diagram:
Diagram 1: Overall Project Concept
“Water as a Source of Income and Wealth” –
The Virtuous Circle Model
Support
Organisation
• Training
• Education• Supervision
Village Water
Committee
- Oversee/administer
All elements of VPWS
PPAIF
“Software”
Subsidy
Finance
VPWS
Reliable Water Supply
Usage (Allocation)
• Household use
• High value crops• Other projects
Tariffs
Consumption/
Connection
SurplusesHigh value crops
SFIs
ConstructionFinance
MNREPolicy Supervision
InvestmentNew Projects
Loan Servicing
(Principal & Interest)
Maintenance
Administration
VPWS Enhancement
SurplusFrom Consumption,
And High Value
Crops
Project implementation activities
1. Design Consultants will be engaged for the preparation of TORs for the selected
implementing organization. The consultants are also expected to undertake the following
activities: (i) along with the implementing organization, to select pilot villages; (ii)
prepare training plans and materials; (iii) train the trainers from the implementing
organization; and (iv) secure the commitment from private financiers for participation.
During the village selection process, amalgamation possibilities of village water systems
will be explored where the local conditions such as distance for water to be piped and
terrain levels, permit economies of scale for small villages, such as one administrative
entity to serve the merged service area.
Annexes Page Thailand
XXX
2. Implementation at village level The implementation process includes the establishment
of village water committees, training and capacity building for villagers, disbursement of
hardware financing, hardware construction, and the introduction and facilitation of
income earning crop farming activities. Most implementation activities are to be carried
out by the implementing organization, with the supervision from the consultants. The
implementing organization is the key driver of the pilot project, in which the tasks
include the following:
- Selection of the participating villages on the basis of village willingness to
participate, available water resources, management and operating capacity, and
financing potential
- Ensuring the financiers‘ commitment in the pilot project
- Ensuring the community‘s understanding and commitment in the pilot project
- Training and guiding the community in management, operation, and maintenance of
the water supply system
- Holding provincial workshops to create awareness and seek support from local
authorities
- Exploring co-financing possibilities with local and/or national government as well as
the private sector, and if found, facilitating the co-financing operation
3. Monitoring and evaluation, documentation, and dissemination Three reports will be
produced by the consultants: the inception report, interim report, and final report. Short
quarterly progress reports of three to five pages are also expected from the consultants.
The final report is expected to be printed for dissemination. For the purpose of more
effective dissemination, field visits by relevant central and local government officials
from Thailand, three government officials from each of the neighboring countries
(Cambodia, Lao PDR, and Vietnam), and Thai mass media will be planned and carried
out.
The pilot project will be implemented in two stages. The first stage will cover 15 villages. The
second stage will cover the remaining 25 villages, but also allows for co-financing possibilities
with local and/or national government as well as the private sector, in turn providing
opportunities for more villages to benefit from the project. A part of the dissemination cost in
the first stage will be used to contribute toward efforts to explore additional, co-financing
possibilities. The first stage is expected to take about 12 months, with the following key
milestones achieved: for over ten villages out of the 15 financial closure with commercial
banks is reached, contractors hired, training activities substantially carried out, and civil works
to build the water system completed. PPIAF funding would flow into the second stage upon
the successful completion of the sequential milestones of the first stage. It is estimated that the
first stage requires 40 percent of the PPIAF fund and the second stage 60 percent.
Selection of pilot villages
The project will focus on poor villages that are not in the position to receive government funding
support for VPWS in the next five years and are willing to participate in the pilot project. The
selection process will involve consultation with provincial and local governments.
CDP-Infrastructure Annexes Page
XXXI
A few villages that have been selected by the government for the VPWS program could be
selected, in consultation with the Department of Groundwater Resources, for the pilot
demonstration project, to introduce the community participation and income-generation features
on the experimental basis.
Moreover, as indicated earlier, amalgamation possibilities of village water systems will be
explored where the local conditions (distance for water to be piped, terrain levels) permit
economies of scale for small villages. For example, in the case of a few small villages located
nearby, a merged service area could be defined, with just one administrative entity to provide
and manage the service.
Technical feasibility
In most Thai villages a nearby source of reasonable quality (under)groundwater is available,
and proposed consumption volumes are comfortably within most conservative estimates of
sustainable levels.
Financing
A 40-village (about 18,000 people) pilot project in Thailand‘s Northeast and East regions will
require an investment of $240,000 to cover software support costs. It will be complemented by
private sector financing to the extent of $400,000 for system hardware construction, local
community ‗in kind‘ contributions of $160,000, and government ‗in kind‘ contributions of
$40,000. The pilot project is expected to deliver income and wealth creation of $4 million.
Additional local and central government financing could be explored during the first stage, and
if successful, could be mobilized to finance more villages in the second stage of the program.
A part of the dissemination cost in the first stage would contribute to the effort to explore
additional, co-financing possibilities.
For hardware financing, KTB, BAAC, and GSB are the three banks that have the infrastructure,
experience and expertise required to finance activities in rural villages. Terms and conditions
(interest rates, repayment terms, collateral) are at private sector standards, and at arms length
from any of the banks' social obligations. The debt is collateralised by joint and several
guarantees amongst Village obligants, has the tacit support of the Village Management
Committee and Head Man, along classic micro lending lines.
Expected impacts
The primary impact is that the participating (40) villages will have a sustainable water supply
system in place. Other expected impacts are that the Government and local authorities adopt the
successful model for scaling up in other areas, so they will save cost in fulfilling their
development priorities. Knowledge and lessons learned will also be disseminated to and adopted
by neighboring countries, and, thereby, poverty alleviation occurs in a sustainable manner.
Annexes Page Thailand
XXXII
Project’s input-to-impact summary
Inputs training, guidance, facilitation to the participating villages through out the
process of having a sustainable pipe water supply system, and between the
villages and the financiers in hardware financing
Process community participation & commitment (i.e. ―ownership‖ creation);
community capacity enhancement; private financiers‘ participation in public
utility provision
Output (40) self-sustainable village water supply systems; documented reports
Outcome the water supply systems are sustainable (in self-financing and operation) with
their income-generating features; the pilot project demonstrates the scale-up
possibility
Impact poverty alleviation; government & local authorities embrace and adopt the
model for scale-up projects; neighboring countries adopt the model
Scale-up in Thailand and other Mekong countries
It is hoped that the success of the pilot demonstration project will convince the Thai Government
to accomplish the following:
- Allocate budget to support the software costs of the virtuous circle model, in order to
leverage the private sector financing; and
- Introduce, where appropriate, the community participation and income-generation
features into the on-going VPWS program, to improve the likelihood of the
program‘s sustainability.
CDP-Infrastructure Annexes Page
XXXIII
5
SUPPORT ORGANISATION
Training and Supervision
Proposed Scale-Up by the Government
VILLAGE PIPED
WATER SYSTEM
Owned and operated
at the grass-roots
VILLAGE WATER
COMMITTEE
Supervision, Operation,
Management
MINISTRY OF FINANCE
Budget, Standards, Evaluation
ENVIRONMENTALLY SECURE
• Renewable water source
• No erosion or surface
contamination
CONSULTANTS
Planning, Supervision, Evaluation
SFIs
Construction Finance
MOF BUDGET
Implementation Finance
CASH SURPLUS GENERATION
• Recharge Village Fund
• SFI Debt Service
• New Investment
FISCAL BUDGET
Jump-start Finance
BOOST CONSUMPTION &
INVESTMENT
New agricultural and
non-agricultural investments
Where the underground water resources permit, the virtuous circle model could be initiated in
rural areas of Cambodia, Lao PDR, and Vietnam.
Annexes Page Thailand
XXXIV
ANNEX 6: World Bank Press Release—National Launch of the Country
Development Partnership for Infrastructure
Bangkok, January 31, 2007 – The World Bank announced Wednesday a new knowledge sharing
partnership with the Royal Thai Government designed to help improve Thailand‘s infrastructure
in support of economic development and poverty alleviation.
The ―Country Development Partnership for Infrastructure‖ or CDP-INFRA, provides for more
support from the World Bank and other international partners to the Thai Government to develop
and implement a national infrastructure strategy. Through a program of analytical and advisory
activities, the Bank and other partners will help the Government identify new challenges in the
infrastructure sector, define its role in infrastructure service provision and management from that
of the private sector, and improve institutional and regulatory capacities of the National
Telecommunications Commission (NTC).
―Each component of this CDP is designed to support Thailand in enhancing the quality and
sustainability of the nation‘s infrastructure sector development,‖ said Ian C. Porter, the World
Bank Country Director for Thailand. The Bank is confident that better infrastructure will
―contribute to the improvement of national competitiveness, economic growth, and to the well
being of the Thai people,‖ Mr. Porter added.
Thailand‘s systems of electricity supply, intercity transport, sea-freight shipment, urban water
supply, and telecommunication services are modern and notably efficient compared with its
neighbors. In recent years, the country‘s air transport has also reached a world-class standard.
Each of these factors has made a significant contribution to the recent economic expansion in
Thailand.
Still, improvement is required in many sub-sectors, namely urban transport in large cities,
logistics and energy costs, water supply in rural areas, and waste water treatment. Together with
the recent oil price increase, infrastructure bottlenecks have placed real constraints on economic
growth.
―There is a greater demand for a well-balanced infrastructure development strategy that links
economic, social, and environmental dimensions together,‖ said Dr. Panas Simasathien,
Chairman of the National Economic and Social Development Board (NESDB), the World
Bank‘s key partner.
Moreover, high logistics costs, heavy traffic congestion in Bangkok, high energy intensity, and
energy import reliance could all reduce Thailand‘s regional and international competitiveness, if
continued, Dr. Panas said. ―We need to explore technological and policy options for the
development of more energy efficiency and focus on renewable energy in order to ensure long
term energy security and sustainability,‖ he added.
The Thai Government has been taking steps to tackle these challenges, including preparing an
energy strategy to improve competitiveness and designing an investment program in response to
CDP-Infrastructure Annexes Page
XXXV
the issue of energy demand. It also emphasized sustaining infrastructure, logistics, as well as
cluster development in the 10th National Economic and Social Development Plan (2007-2011).
The NTC itself was set up in 2004 to be the first independent regulatory agency for Thailand‘s
infrastructure sector.
―This event will be a valuable opportunity for all development partners…to discuss among
stakeholders on priorities and the way forward for infrastructure development in Thailand,‖ said
Dr. Ampon Kittiampon, the NESDB Secretary-General.
This is the seventh CDP in Thailand since 2000. Previous CDPs have addressed issues of poverty
analysis monitoring, financial and corporate competitiveness, social protection, and governance
and public sector reform in Thailand. CDPs for education and environment are on-going and a
CDP for health will be launched in February 2007.
For more information on the World Bank‘s program in Thailand, please see:
www.worldbank.or.th
For more information on the World Bank‘s infrastructure program, please see:
www.worldbank.org/infra
-###-
CDP-Infrastructure Annexes Page
37
World Bank Office, Bangkok 30th Floor Siam Tower 989 Rama I Road, Pathumwan Bangkok 10330, Thailand Tel. (662) 686 8300 Fax. (662) 686 8301 http://www.worldbank.or.th/
National Economic and Social Development Board 962 Krungkasem Rd., Pomprab Bangkok 10100, Thailand Tel. (662) 280 4085 Fax. (662) 280 1860 http://www.nesdb.go.th/
