Plans halted for national holding firm

Plans halted for national holding firm

Acquiescing to public outcry over draft law

The government has backed off a plan to set up a national holding company after a public outcry against a draft act on state-owned enterprise governance.

To push the draft act through lawmakers' deliberation process, the State Enterprise Policy Office (Sepo) has agreed to call off the plan to incorporate the national holding company, aiming to tamp down criticism even as the office tried to explain that the national holding company would not privatise state enterprises, said director-general Prapas Kong-Ied.

The draft law will play a pivotal role in supervising state enterprises, he said, and is expected to win approval from the National Legislative Assembly (NLA) before the general election takes place.

While the cabinet approved the draft legislation in August 2016, the bill has been blocked by the NLA.

Under the original bill, a national holding company would be established to oversee 12 corporatised state enterprises. Assets belonging to the 12 corporatised state enterprises would be transferred to the national holding firm within 180 days of the bill coming into force.

The 11 corporatised state enterprises are PTT Plc, TOT, CAT Telecom, MCOT Plc, Thai Airways International Plc, Airports of Thailand Plc, Transport Co, Dhanarak Asset Development Co, Thailand Post Co, the Syndicate of Thai Hotels & Tourists Enterprises Ltd and Bangkok Dock Co. These 11 state enterprises have combined assets worth 6 trillion baht.

The bill was drafted with the aim of improving governance, enabling public participation and imposing guidelines for choosing members for the board of directors at each state enterprise, based on qualifications rather than politics.

Mr Prapas said the draft PPP Promotion Act is another law Sepo aims to push.

The new act, which will replace the Private Investment in State Undertakings Act, will shorten the PPP process to less than six months from two years in practice. Under the draft bill, only infrastructure projects and public services will fall under PPP, while state land rental will not be covered.

The draft bill is expected to be forwarded to the NLA in November.

In another development, Mr Prapas said Sepo will this week discuss outline plans for the Thailand Future Fund's second sales batch with the Highways Department and related agencies.

The discussion will focus on amending a law governing the Highways Department that enables the use of toll revenues as underlying assets for the TFFIF's second batch, he said.

The amendment will not face as many obstacles as the first batch did, Mr Prapas said, because the Highways Department is a state agency and does not have a labour union.

Sales of the TFFIF's second batch have not been set, as it depends on the Highways Department's spending plan, he said.

Mr Prapas said proceeds worth 44.7 billion raised from the IPO of the TFFIF's first tranche could be used from the middle of next year. The money is kept in the treasury reserves.

The TFFIF will initially invest in a 30-year right to earn 45% of future revenue from the Chalong Rat Expressway and the Burapha Withi Expressway, both owned by the Expressway Authority of Thailand.

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