Whether or not Thaksin Shinawatra comes back as prime minister, the country's programme of privatising state assets will certainly come under closer scrutiny.

Opposition to the attempt to sell Egat Plc has in part led to the premier's present predicament. The growing alliance against the sale of Egat indicates that the public feels that they are also owners of these assets and therefore they cannot let them fall into the hands of people whose motives may be uncertain.

Over the past five years, full-blown privatisation has been at the heart of Thaksin's economic policy. The government hopes to use the foreign money attracted through the sales to boost the country's capital market. Moreover, privatisation is said to enable the government to reduce subsidies to some inefficient agencies, the result being a reduction of public debt.

However, the privatisation programme under the Thaksin administration was a source of public suspicion with the opposition questioning the fairness of the allocation of initial-public-offering shares. These doubts overshadow any benefits that privatisation might produce.

In theory, an effective privatisation programme should leave the government with more capital to invest, and less need to subsidise uncompetitive agencies. In addition, by listing state agencies on the stock market, market mechanisms and investor monitoring is said to make them run more efficiently with lower operating costs. The listing should ease public debt.

From the taxpayers' perspective, privatisation should create more efficient agencies, which should provide them with better infrastructure services and utility supplies. That's the theory, but in practice there are drawbacks. The public always faces higher public-utility prices because with high returns demanded by new shareholders - normally at least 10-15 per cent per annum - privatised state agencies need to increase net profits.

Newly privatised firms also face a higher cost of borrowing - generally 0.25 to 1 percentage points more - because they are no longer guaranteed by a government.

In fact, the Chuan Leekpai administration started an ambitious power-sector reform programme, starting with the Electricity Generating Authority of Thailand - now Egat Plc - which is the country's first state enterprise, established in 1968. Under the original plan, Egat was to be broken into eight mutually competitive electricity-generating companies. Transmission and system operations were to be unbundled. A new independent regulatory commission would have the muscle and authority to guard against price collusion. This maintains a monopoly, but one in private hands rather than one under government control.

The plan however faced rejection by the public and the Chuan government was accused of trying to sell off the country's assets for profit.

With a stronger mandate and better marketing, the present government has sold a number of state agencies. They are PTT Plc, Airports of Thailand Plc, MCOT Plc, and Internet Thailand Plc.