State enterprise bill snagged by tweaks
The transfer of 11 corporatised state enterprises’ shares owned by the Finance Ministry to a national holding firm as stipulated in a draft bill on reforming state-owned enterprises may have hit a wall after meeting strong opposition, says the State Enterprise Policy Office (Sepo).
The National Legislative Assembly (NLA) standing committee has proposed to set up a subcommittee to tweak the functions of the national holding firm to only regulate policy of the 11 state enterprises and prevent private ownership, said Sepo director-general Prapas Kong-Ied.
The bill, which is being deliberated by the NLA, calls for the establishment of the national holding company to oversee state enterprises, improve governance and information disclosure to the public, and seek greater clarity in choosing members of the board of directors at each state enterprise, which should be based on qualifications and expertise and setting out tasks of the State Enterprise Policy Commission.
State enterprise reform is high on the government’s agenda, and the hope is that the law will comprehensively prevent politicians from using state enterprises as instruments to seek benefits, while encouraging state enterprises to be economically viable and improve their services.
Sepo earlier dismissed criticism from former senator and activist Rosana Tositrakul that the incorporation of the national holding company to own 11 corporatised state enterprises would pave the way for the private sector to take control of them. Sepo has said that the bill stipulates that the holding firm must be the wholly owned subsidiary of the Finance Ministry and that every share it owns in the national holding company will be non-transferable.
The 11 corporatised state enterprises are PTT Plc, TOT, CAT Telecom, MCOT Plc, Thai Airways International Plc, Airports of Thailand Plc, The Transport Co, Dhanarak Asset Development Co (a state enterprise under the Treasury Department), 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.
Mr Prapas said making the national holding firm a regulator only is to tone down people’s opposition. Related state agencies will try to maintain state enterprises’ management efficiency, he said.
Apart from supervising the 11 corporatised state enterprises’ policy, the national holding firm, under the rejigged bill, will play a role in appointing board members and overseeing management and investment, he said.
The radical change in the national holding firm’s role from the original draft will need to be considered, including whether cabinet re-approval is necessary.
The idea to transfer shares of the 11 corporatised state enterprises to the national holding firm is aimed at boosting their efficiency in the same manner as Singapore’s Temasek Holdings, Mr Prapas said, adding that there is no concern that the private sector will take over these companies.