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Published on November 8, 2007

"Most state-owned enterprises responded slowly to a previous request from the ministry," Pongpanu Svetarundra, director-general of the Public Debt Management Office, told executives of 60 state firms yesterday at a seminar organised by the State Enterprise Policy Office of the Finance Ministry.

The ministry previously targeted that state enterprises should repay foreign debts ahead of schedule or swap foreign currencies into baht debt worth US$3.18 billion (Bt108.4 billion), aiming to lessen baht appreciation against the US dollar.

Pongpanu said they could however only achieve $1 billion. For example, the Mass Rapid Transit Authority has not yet done anything with its $1.27-billion debts. He praised Airports of Thailand and Thai Airways International, which have made quicker moves.

The Finance Ministry has raised a new target for debt management worth $3.39 billion for state enterprises, he added.

He urged them to cooperate closely with the Finance Ministry and the Bank of Thailand on refinancing or debt repayment ahead of schedule.

Capital inflows still create pressure on the baht and the authorities are concerned about a rising currency that could hurt the export sector if other regional units appreciate against at a slower pace.

State enterprises that borrowed at a higher cost in the past should take this opportunity to refinance their debts and then swap them into baht, according to Finance Ministry officials. Debt management would reduce risks from volatile exchange rates for state enterprises and at the same time reduce the risk of loan maturity mismatch.

Meanwhile, Areepong Bhoocha-oom, director-general of the State Enterprise Policy Office, said executives should be very careful when they raise the salaries of employees. The Cabinet recently agreed to let them increase the pay of workers by no more than 4 per cent, the same rate as the pay rise Cabinet approved for government officials, starting in October.

Areepong said a survey indicated the average state-enterprise worker gets higher pay than his counterparts working in private companies or government offices.

Part of the problem is strong labour unions, he said. Employees of state enterprises also get lifetime employment..

Wichit Chaitrong

The Nation