The proposed privatisation law will attempt to plug loopholes in the Corporatisation Act by setting guidelines on how the government should proceed with initial public offerings and establish clear procedures for listing state enterprises on the stock exchange.

The Corporatisation Act of 1999 does not address the issue of selling shares or listing state enterprises on the stock market, so it is open to legal interpretation, such as in the cases of Egat and PTT,  said Somkiat Tangkitvanich, chairman of the committee drafting the new law.

Finance Minister Chalongphob Sussangkarn has assigned the drafting committee to come up with a privatisation law that ensures transparency, protects the public interest and supports efficient management of the new entity.

"The committee hasn't got much time. We plan to complete a first draft within a month," Somkiat said.

He said the current Cor-

poratisation Act had many loopholes and could easily be mani-pulated by politicians. The law

was enacted by former finance minister Tarrin Nimmana-haeminda under International Monetary Fund (IMF) guidelines and was aimed at improving the efficiency of state enterprises.

The IMF required the Thai government to proceed with privatisation as a condition for obtaining a rescue package during the 1997Asian financial crisis.

The Corporatisation Act gives politicians greater discretion and does not require the government to set up a regulatory body to supervise the business after privatisation, Somkiat said. Nor does it require the government to separate commercial units from either public property or power monopolies.

The new law will address these issues and also outline what types of state enterprises should be

privatised, he said.

Some state enterprises, including the Petroleum Authority of Thailand (PTT) and the Mass Communication Organisation of Thailand were privatised during the Thaksin administration.

The Electricity Generating Authority of Thailand was also privatised by the Thaksin government, but the Supreme Administrative Court later annulled the privatisation due to procedures having lacked transparency, resulting in conflicts of interest.

Civic groups have also petitioned the Court asking for a similar annulment of PTT's privatisation. The case is pending in the court.

Somkiat said the Corporatisation Act failed to set guidelines by which the government must sell shares to the public, resulting in cheaper shares and shares allotted to politicians and their cronies. The ousted Thaksin government has been accused of offering shares to friends and politicians in the Thai Rak Thai Party.

Somkiat said the new law would ensure fair prices and fair shares of stocks for the public. Its clear rules will also help the Administrative Court and other parties deal with privatisation problems when they arise.

A subcommittee of the National Legislative Assembly (NLA), led by Sophon Supapong, has also proposed a separate bill on privatisation, and Somkiat said he shared many of the views of its proponents.

However, the NLA subcommittee's bill wants a new government to issue a specific law for each state enterprise if and when it proceeds towards privatisation.

Somkiat said the new privatisation law did not infer that the current government wished to privatise any state enterprises. It is unlikely that this interim government will proceed to privatisation during its term, but rather will simply set new rules for the new government to follow.

Wichit Chaitrong

The Nation