Army signs deal to let Finance manage welfare assets
Revenue to go to state coffers, with portion for army welfare programme
published : 17 Feb 2020 at 16:24
writer: Wassana Nanuam
The army has signed a memorandum of understanding that will pave the way for the transfer of state land and commercial businesses to the Finance Ministry and to allow most of their revenue to go to state coffers.
Among the assets under the MoU signed at the army headquarters in Bangkok on Monday were 1 million rai of state land, petrol refilling stations, shops, flea markets, leisure clubs, boxing stadiums, golf courses, horse race tracks, hotels and resorts. Most of them are for soldiers and their families but the public are welcomed to use them and the income goes to welfare programmes for soldiers.
Army chief Apirat Kongsompong stressed the existing welfare of army personnel would not be affected by the move, and people using the services would not have to pay more.
The objective of the commercial welfare management project is to comply with related regulations on welfare and commercial businesses for welfare purposes.
Last year, Future Forward Party Thanathorn Juangroongruangkit, while on the House budget panel, questioned the army’s off-budget incomes and urged more transparency.
Gen Apirat claimed it had been his intention for quite some time, since when he was the assistant army chief. He pledged to proceed with it by seeking the help of the Treasury Department, which specialises in managing state assets.
Army chief of staff Gen Teerawat Boonyawat said on Monday the MoU would pave the way for discussions how these properties and businesses should be managed. After an agreement, they will be transferred to the Treasury Department.
He cited as an example the US army which he claimed had 160 golf courses and hotels.
Most of the revenue from the assets will go to state coffers, with a portion set aside for the army’s welfare programme.
Finance permanent secretary Prasong Poontanate said the rates the army would get would be in compliance with the Treasury Department’s regulations. They might vary depending on the types of businesses, as well as their profitability and locations.
Citing as an example, he said for some 100 army-run refilling stations, the department will give the army between 2.5% and 5% of the profits while for some businesses the rate could be 7.5%.
The department would also take delivery of and manage the 1 million rai of state land in the army’s care, half of all state land in the country, as well as the land it rented to people or used as boxing rings, golf courses and hotels.
He said for the state land, the army asked the department to help solve the problem of encroachment on 700,000 rai of it.
The department was asked to rent the land to people for no more than three years per plot to discourage further encroachment and for transparency.
According to the Treasury Department data, of 12.5 million rai of state land in the country, 90% is under the supervision of government agencies and 7.5 million of it is used by the armed forces for security purposes and welfare.
Mr Prasong applauded the army’s move and said other armed forces started to contact the department to have it handle their properties.
He insisted for some businesses, the profit will not be shared with the army.
For others, like golf courses, soldiers would get discounts and if a profit is made, some of it would be given to the army’s welfare programme, which inlcudes scholarships for soldiers’ children, soft loans and life insurance.
He added it would take at least a year to estimate the profit.
Gen Teerawat added the army’s commercial operations were divided into two types. Commercial welfare assets such as hotels and boxing rings — defined as those where civilians make up 50% or more of customers — are to come under the department. Other internal welfare operations such as the army club will remain with and run by the army.
For another small group of assets, such as 7-Eleven convenience stores inside army bases, the operators have rented the land directly with the department while army personnel get a 5% discount.
He said initially 40 commercial welfare businesses would come under the programme.
Asked about revenue from these businesses, Gen Teerawat said it could be less than 1 billion baht but admitted they have potential.
“We currently operate them as internal welfare. If they become commercial welfare businesses, improvements must be made to them. After all, we’re not a professional [in these businesses].”
Apart from these assets, the army owns frequencies for security reasons which they run by themselves or give concessions to private operators. They are in the form of two TV stations, MUX for rent, and hundreds of radio stations.
After the Nakhon Ratchasima mass shooting on Feb 8, the motive of which is believed to be over a housing loan, part of the army's welfare programme, Gen Apirat pledged reform and more transparency.