Egat asks for delay of instalment

The Electricity Generating Authority of Thailand has asked the Finance Ministry if it may hang on to over Bt7 billion of earnings due the state because of cash-flow problems.

Egat governor Sombat Sarntiharee said yesterday that the state agency had made the request. Egat pays 30 per cent of its annual net profit to the ministry in two instalments, the second of which, Bt7 billion, is due at the end of this year.

Sombat said Egat had cash-flow problems due to the subsidy on electricity prices dictated by government policy.

"The government has not yet reimbursed us for the subsidy, and we need to make sure that we have sufficient funds to cover operating costs, which amount to Bt24 billion a year," Sombat said.

Under the six measures launched in August to lower the cost of living, Egat must subsidise power bills for households consuming less than 80 units a month, with a 50-per-cent subsidy for consumption between 80 and 150 units. This costs it Bt12 billion.

The agency has also had to shoulder the extra cost of power, as power prices could not be adjusted to match higher fuel prices.

Sombat said Egat had urged the Energy Regulatory Commission, which has the final say on electricity prices, to fully factor in fuel costs to ensure that Egat did not shoulder any subsidy that could affect its cash flow.

Egat needs cash flow of around Bt24 billion a year to cover plant maintenance, staff salaries and administration.

Egat plans a Bt10-billion bond issue by year-end to invest in 2008-2009 in a power plant in Wang Noi and in moving its power plant in Bang Pakong to the South to make up the expected power shortage there in 2013. The bonds are not yet on offer.

Egat is one of the top 10 money-making state enterprises. Not having its income could mean deeper deficit for the government during a global economic recession.

The ministry has been considering cutting corporate income tax and value-added tax to spur the domestic economy.