The government has finally ordered the termination of the 5-billion-baht national submarine cable construction project after clearly proving that it violates the Budget Bureau's procurement rules.
Both the Information and Communication Technology Ministry and the Budget Bureau, under the Finance Ministry, reached a consensus to scrap the project, arguing that the international consortium model is in violation of the Budget Bureau's procurement rules, said Surapan Meknavin, a director of CAT Telecom's board.
The procurement rules stipulate that any state agency in a public-private partnership must be the sole owner of the assets in the investment project.
The decision could have adverse effects on the development of the hard digital infrastructure to serve the government's digital economy and Thailand 4.0 polices, a high-ranking source at CAT Telecom told the Bangkok Post.
The government initially projected construction of the national submarine cable infrastructure would be a global development through an international consortium business model, which requires highly skilled foreign workers.
The government had assigned CAT Telecom to take responsibility for the national submarine cable construction project.
Mr Surapan said he was informed by the ICT Minister two weeks ago that the project would definitely be scrapped.
The submarine project is part of the government's hard infrastructure development to promote Thailand as an Asean digital gateway.
Mr Surapan said CAT had previously tried to resolve the deadlock in the procurement rules by proposing two alternative models to the government.
First, the government might directly allocate the 5-billion-baht budget to CAT to construct the domestic submarine cables, adding to its existing six routes, without the need for a foreign partnership.
The second entails the government potentially amending the existing procurement rules in order to end the current restrictions.
However, the government rejected CAT's proposals and decided to scrap the project instead.
In March, the government approved the allocation of 20 billion baht from its fiscal budget to the ICT Ministry to construct hard infrastructure under the digital economy policy.
Of the total, 15 billion baht is slated to be invested in broadband internet networks for 39,000 villages nationwide. The remaining 5 billion is for the construction of submarine cables.
Mr Surapan said additional submarine cable routes could reduce IP transit costs to internet service providers in order to lower the cost of internet services.
This could in turn promote broadband internet access throughout the country, thus narrowing the digital divide, he said.
Currently, CAT owns six submarine cables, while TOT Plc has two.
Mr Surapan said increasing capacity via submarine cables and links is essential to handling greater internet traffic.
Teerarat Pantarasutra, president of SET-listed Symphony Communication, a private international submarine cable company, said the scrapping of the national submarine project threatens Thailand's potential to become Asean's digital hub.
Having international submarine cable will enable Thailand to attract global content providers such as Google or Facebook to shift some of their server capacity to the country, instead of hosting their servers in Singapore as they do now.
Mr Teerarat said Thailand needs at least three new international submarine cable lines to accommodate surging internet traffic demand.
There are only 10 submarine cables in Thailand, compared with over 15 in Singapore and Malaysia, he said.
Also, submarine cables offer 30% lower investment and maintenance costs than terrestrial cables, said Mr Teerarat.
