The draft new privatisation law would be forwarded to the National Legislative Assembly within 60 days, said Finance Minister Chalongphob Sussangkarn.

Speaking at the first hearing of the draft, Chalongphob said the ministry considered its enactment urgent because it should replace the Corporatisation Act BE 2542 (1999) that will soon be revoked according to the proposal by the National Legislative Assembly (NLA).

The planned act would bar any single private investor from holding more than 5 per cent of a state enterprise after its privatisation, Chalongphob said.

However, he said the bill does not set a limit on foreign ownership, as each industry has different regulations on foreign holdings.

The draft should replace the corporatisation law by setting the terms and conditions for privatisation including the sales of shares on the stock exchange.

Somkiat Tangkitvanich, research director of Thailand Development Research Institute which came up with the draft two months ago, said the bill should limit the loopholes witnessed under the corporatisation law during the attempt to privatise the Electricity Generating Authority of Thailand (Egat), as there were issues relating to the monopolistic rights and certain public utility services.

Bowornsak Uwanno, a legal expert, however, thought the draft law needed further amendment as it did not require the existence of regulators to ensure a fair privatisation process.

He suggested the draft should include the list of state enterprises subject to privatisation in the same fashion as French law.

The drafted law should also stipulate the prohibited characteristics of those who should not be entitled to the share allotment to prevent scandals arising from unfair share allotment.

Korn Chatikavanij, an executive member of the Democrat Party, said it was not necessary for the draft law to ensure the share allotment to small shareholders because there would be no more than 200,000 minor shareholders to receive the share allotment from the privatisation process of each state enterprises. 

In fact, the draft law should have a set of requirements for fair prices to ensure everyone has access to the shares.

He said not many state enterprises would attract the attention of investors - with the exception of Egat.

He said the public was against the privatisation of Egat not because they were against privatisation, but feared possible higher electricity costs as a result of the minimum investment return guarantee stipulated in the Egat privatisation.

Savit Kaewwan, a member of the railway labour union, said the draft law was not much different from the old one, as it would still promote privatisation.

Chuanchom Sa-ngaraseek-reesen, an energy expert, said an independent financial advisor should be asked to appraise the value of the state enterprises to ensure there would be no conflict of interest.

Wichit Chaitrong

The Nation