Thai privatization plans revived
Thai privatization plans revived
BANGKOK (Reuter): Thailand's severe economic problems have
nudged its politicians into reviving the sluggish privatization
of state enterprises as the government seeks funds to tackle a
growing fiscal deficit.
Former prime minister and current chairman of the government
advisory board Chatichai Choonhavan has called on the government
to speed up plans for licensing private participation in
profitable state enterprises.
Chatichai said the injection of private capital would earn
more revenue for the cash-strapped government and spare it the
need to finance expansion of state enterprises.
Thailand is expecting heavy fiscal deficits, its first in 10
years, in the current and 1997/98 (October-September) fiscal
years.
Analysts said on Wednesday Chatichai's Chart Pattana Party, a
senior partner in Prime Minister Chavalit Yongchaiyudh's six-
party coalition, was the prime mover of government plans to
liberalize and divest assets of state-owned utilities.
Chart Pattana controls the transport and communications
ministry that supervises phone, telecommunications, rail and
highway agencies as well as national carrier Thai Airways
International Plc.
Officials at the state-owned Telephone Organization of
Thailand (TOT) said the government was finalizing a plan to
restructure the highly profitable phone monopoly that would lead
to a public offer of up to a quarter of its equity.
"We do not oppose privatization in principle but the
government still has not clarified how it would allow private
participation in our operation," said Karvee Chitkaew, vice
president of TOT Labor Union.
He said TOT, with assets estimated at 200-300 billion baht
($6.67-10.0 billion), earned about 20 billion baht in revenue a
year -- of which about half was contributed to government
coffers.
Karvee, however, told Reuters that his union would resist
attempts by politicians with business connections to exploit
privatization for their personal interests.
"Eighty percent of past phone concessions were awarded through
questionable process," he said.
Thailand has since 1992 granted a two-million-phone concession
in Bangkok to TelecomAsia Plc and a one-million-line rural phone
project to Thai Telephone and Telecommunications Plc.
Analysts said TOT and Communications Authority of Thailand
(CAT), which operates overseas phone and postal services, were
two state enterprises whose privatization had been eagerly
awaited by private investors, especially foreign telecom firms.
They said CAT operated a lucrative business that earned an
estimated 18 billion baht in revenue a year from 50 billion baht
in assets.
Thai Airways, which went public in 1992 with a seven percent
initial share offer, announced last week it planned to publicly
offer another 250 million shares late this year. The move would
further trim government ownership in the carrier to 76 percent.
Thai Airways chairman Mahidol Chantrangkun said his firm would
further cut state equity holdings to 47 percent by 2000, with
foreign investors being allowed to take a combined maximum 25
percent in the airline.