It says they can participate only if the Electricity Generating Authority of Thailand (Egat)'s stake in the two companies is diluted to less than 10 per cent.

At a meeting the regulators will also consider the fuel tariff for the period from June to September, and according to a subcommittee's proposal, it could be raised by 9.6 satang per unit.

Regulatory board chairman Yongyuth Vichaidit said yesterday that representatives of both companies and Egat had been invited to join the meeting. Egat, a state utility agency, owns 25 per cent of Egco and 45 per cent of Ratchaburi.

"We will inform them of the bidding conditions," he said, adding that the regulatory board is not trying to block Egco and Ratchaburi from the bidding. "We're adhering to the Securities and Exchange Commission's rules that prohibit listed companies that are more than 10 per cent owned by state enterprises from state bidding."

Yongyuth said both companies would be barred from bidding unless Egat dilutes its stake in them to 10 per cent or lower, to prevent possible collusion and to ensure full competition in the bidding for the sake of power-generating efficiency.

The government plans to call for bids to supply an additional 12,600 megawatts of electricity to consumers in Thailand. Half of it will go to Egat, while the other half will go to bidders that propose the lowest power prices.

The regulatory board's decision to block Egco and Ratchaburi has raised an outcry from energy experts and the companies, who say the decision to block their participation will guarantee a lack of full competition.

However, Yongyuth said private companies were concerned that if Egco and Ratchaburi take part in the bidding they would be left at a disadvantage because both companies own land plots near transmission grids. This will reduce their production costs and discourage other companies from joining the bidding.

"As their land plots are mostly in the central and eastern regions, this is not in line with the regulatory board's objective of ending the concentration of power generating in these regions," Yongyuth said. "Egat would also have to invest more in transmission lines to transmit power to other parts of the country."

He said if Egat remains unable to accept the conditions at today's meeting, the regulatory board would forward the dispute to the Council of State.

Egat governor Kraisi Karnasuta said yesterday there was no sound reason to block the two companies from the bidding.

"If the companies' generating costs are low, that will benefit consumers, who will be offered lower power fees. Without the two, the bidding will be dominated by a few players and there will be no competition. In the end, consumers will need to shoulder a high power rate," he said.

Watcharapong Thongrung, The Nation