Ministry wants bigger stake in pipelines

Economy August 22, 2014 01:00

By The Nation

The Ministry of Finance said it is ready to increase its investment in PTT's gas pipelines business before it enters the capital market and has instructed the State Enterprise Policy Office (SEPO) to gather information on the performance of PTT's subsid

 Rungson Sriworasat, permanent secretary of the Finance Ministry, revealed that PTT Plc long ago  transferred control of their on-land gas pipelines to the ministry as ordered by the Administrative Court and the ministry is the majority shareholder (51 per cent) of the PTT Public Company while the Vayupak Fund,  another investment unit of the ministry, has control of another 14 per cent - which puts  ministry  in control of 65 per cent of PTT’s shares.
 “The Ministry of Finance is ready to increase investment in the gas pipelines business of PTT before entering it to the Stock Exchange of Thailand (SET) by looking into the possibility of increasing the share of the Vayupak fund from 14 per cent to 25 per cent,” he said.
 He explained that since the ministry is a separation between the gas pipelines and other businesses there should be a board to manage the use of gas pipelines to get rid of disparity in term of leverage and since PTT is owner of the gas pipelines, the firm should think of a price that is reasonable for rival companies.
 Meanwhile, Rungson insisted that PTT has transferred all control over the gas pipelines to the ministry since 2008 while other land assets that PTT acquired through public authority which include pipelines in the sea are not part of a state-owned asset and they do not have to transfer them over to the ministry.
 Assets under PTT’s gas pipelines business include 106 plots of land that were expropriated worth Bt1 billion and the pipelines which are worth Bt14 that are under the control of the Treasury Department and the department receives Bt500 million from the rental of  pipelines   every year as part of the Revenue Sharing system.
 The permanent secretary also added that the reason why the ministry has taken control of the investments of all state enterprises’ subsidiaries was because many of the subsidiary firms were  losing money and a long-term plan has to be considered in order to manage the performance of the companies.
 “We are not blocking the investments of state enterprises’ subsidiary firms because some businesses have to expand but it has to be managed properly, especially  investments in other countries,” he said.