FINANCE experts have expressed concern that an opportunity to extract more value from the country’s state enterprises will be lost if the National Legislative Assembly (NLA) fails to pass a bill aimed at reforming them.
The bill is designed to improve the management of state enterprises, which have combined assets worth Bt15 trillion - equivalent to 110 per cent of Thailand’s gross domestic product (GDP). The legislation, whose backers say it would also increase transparency in state firms’ operations, is pending in the NLA.
“Greater opportunities for the improving the management of state enterprises would be lost should the bill not become law,” said Prasarn Trairatvorakul, a former governor of the Bank of Thailand.
Prasarn who is also member of the State Enterprise Policy Committee, said the bill would not only improve transparency but also pave the way for more effective administration of the 56 state enterprises. He acknowledged that opinions about the bill’s merits are diverse.
In response to criticism that the bill would not address weak governance at the state firms, he said the draft law is designed to be flexible, not stricter.
The legislation, if passed, would divide the state enterprises into two groups. They would be supervised by a state enterprise policy committee, which would also be known as a super board .
The 11 entities that operate commercial businesses would be under the supervision of a national holding company, similar to the structure at Singapore government investment fund Temasek Holdings. These firms are Thai Airways International, PTT, AOT, TOT, CAT Telecom, Thailand Post Co, Transport Co, MCOT, Bangkok Dock Co, Dhanarak Asset Development Co and the Syndicate of Hotels & Tourists Enterprises.
Trade unions oppose the bill on fears that they it would lead to more privatisations.
Rapee Sucharitakul, a board member of the State Enterprise Policy Committee, said the bill would not override the current regulations that require Cabinet approval for any privatisations. The bill requires more information disclosure at state enterprises, he said. The super board would act as stewards who are there to protect the interests of the country, added Rapee, who is also secretary-general of the Securities and Exchange Commission.
Banyong Pongpanich, a former board member of the State Enterprise Policy Committee, said the new law would make it even harder to proceed with any privatisations.
However, he described privatisation as not a bad thing, citing the experience of 120 countries.
He said the legislation would help make it easier for state enterprises to raise funds from the capital markets and this capability would reduce the burden on the public purse. He pointed out that since privatisation began in 1993, 16 state enterprises and their subsidiaries have raised a combined Bt380.9 billion from the market.
“The money is huge. I don’t think the government would have such a large amount of funds spare to support them, had they not listed on the stock market,” Banyong said.
The three men, who are among the key people that drafted the bill, yesterday expressed their views at a seminar hosted by the Federation of Thai Capital Market Organizations.