Duty-free changes irk mandarins

The Finance Ministry is considering summoning Airports of Thailand (AoT) executives to explain the agency’s decision to alter its duty free concession contracts, which it feared could hurt the AoT’s projected revenue, says a source at the State Enterprise Policy Office (Sepo).

The AoT is poised to announce the amended duty free concession contracts, citing an ongoing heavy slump in air travel caused by the Covid-19 pandemic and the need to help ease financial burdens facing the concessionaires, the source said.

As a shareholder in AoT, the ministry has a role to assess the agency’s investment plan.

The source said the ministry will also find out to what extent the AoT’s changes to the duty free contracts with concessionaires will affect revenue to be generated from the business.

According to the source, the ministry felt the AoT should have consulted its board and shareholders before amending the contracts with existing concessionaires. The ministry was eager to listen first-hand to the AoT’s reasons behind the contractual changes, the source added.

Although state enterprises which also operate as public companies listed on the Stock Exchange of Thailand (SET) normally have more freedom in their business management than the nonpublic company state enterprises, the ministry as a shareholder has to protect its interests, said the source.

State enterprises have the authority to sign a contract or perform a legal transaction as long as these juristic acts do not cause damage to the other parties, the source said.