Is privatisation a dirty word? only time - and more cash - will tell

Since the privatisation of Electricity Generating Authority of Thailand (Egat) was cancelled, the Samak Sundaravej government has made it clear it will not touch the issue, though the capital market is crying for the process to take place so that new products can be listed to lure more investment. MCOT was the last state enterprise to list, in 2004.

Veteran investment banker Banyong recalled that he had been involved in the privatisation of 10 state enterprises, starting with North East Jute Mill, which is now NEP Realty and Industry, in 1987 - exactly 21 years ago.

Despite this long span of time, there have been less than 20 state enterprises listed on the bourse, including Airports of Thailand, Thai Airways International, PTT and MCOT. Phatra was the adviser for all these listings and was one of Egat's six advisers.

To opponents of privatisation, Banyong represents the evil of the capitalist world. Likewise, privatisation itself is also an act of evil, breaking up national assets for the benefit of individual parties.

Banyong is not blind to this.

On the panel, before revealing what he planned to speak about, he mentioned the invitation letters from Chulalongkorn University.

"I remembered the first two letters," he said. "The discussion topic was meant to be the privatisation of state enterprises and Thai capital-market development." Banyong turned round to face the seminar's title at the back of the stage. "But I don't see the word 'privatisation' here. Replacing it is 'state enterprise development direction'. Is privatisation a dirty word?"

The audience's silence spoke volumes.

"Then I'm pure evil under this standard," he said. "Though I'm certain that I'm not evil. On the contrary, I have done some good."

At the end of the seminar, as if to clear his name with his opponents, Banyong revealed that during the previous government's term, he had submitted a proposal to increase the efficiency of state enterprises without listing them on the stock market.

In the proposal, he suggested all state enterprises - or at least the ones most ready - should adopt new accounting standards if none is destined for privatisation or listing. He also advised the introduction of new auditors. State enterprises must disclose information just like listed companies to allow public scrutiny, if not scrutiny by all stakeholders as in the case of listed enterprises.

Too bad that the progress in implementing these reform measures is too slow. Though KPI (key performance indicators) is now being applied, years will tell whether poor agencies can improve their efficiency.

It seems that only when even more public money is allocated to poor agencies will the public see the purity of this investment banker's mind.