Kittiratt 'not in a hurry' to sell govt stake in PTT and THAI

The urgent job for the government is to set up a flood management system, in case the country is flooded again, he said.
A source on the strategy committee of the ruling Pheu Thai Party said after its meeting that the party opposes the idea of the government selling its stakes in the state-owned enterprises.
On his first day as finance minister, Kittiratt said reorganising the shareholding structures of state enterprises is a good idea, but there’s no rush if people still don’t understand.
The idea had been put into practice by governments in the past by selling the government’s stakes in the enterprises to a third party, which is the Vayupak Fund.
“We can’t deny that securities management under the Vayupak Fund in the past has benefited the fund’s unit holders in the government sector,” he said.
This does not mean that the government sells state enterprise shares to others not involved with the government.
This idea is also not an attempt to hide the country’s public debt, as the whole process would be open to public witnesses.
“If asked whether it should be an urgent task, I can answer that it’s not. We can wait until it is the best solution. If the idea is not pleasant, we don’t need to hurry to do it,” he said.
“I insist that this idea is good and the government has the right to do it. Debts incurred by state-owned enterprises are also defined as public debts,” he said.
Kittiratt also said he would continue the existing work at the Finance Ministry and has no need to initiate more projects, as the priority is water management.
This is the most important focus for the country and the government would not let the country be flooded again like in the past, he said.
When the law is passed, the government would immediately proceed with the Bt350-billion loan for development of the water management system. Of that, about Bt5 billion to Bt10 billion would be bank loans and the rest would be raised by issuing bonds.
Kittiratt also said he would take into account any advice from ex-finance minister Thirachai Phuvanatnaranubala as well as other suggestions that are useful to the country.
Teerana Bhongmakapat, dean of economics at Chulalongkorn University, said the plan to reduce the government’s public debt by selling its stake in PTT to the Vayupak Fund is just window dressing.
“This is not worth it. This is considered as transferring the government’s assets and income in the future, including natural resources, to the private sector,” he said.
Once PTT, which is a monopoly, is transformed into a private company, its management and shareholders might have management control over the state, he said.
The government should refrain from creating more public debt rather than using a change in liabilities on its books.
The government has doubled public debts from almost Bt1 trillion to Bt1.9 trillion in just three to four years. Most of the increased debts were from expenditures related to populist policies, he added.
Pailin Chuchottaworn, president and CEO of PTT, said PTT would like the Finance Ministry to draw up a clear plan about reducing its holding to under 50 per cent by transferring shares to the Vayupak Fund.
The unclear plan has hurt PTT’s image and investor confidence.
As far as he was concerned, the share transfer from the Finance Ministry to the Vayupak Fund might not affect PTT significantly, as the ministry had diluted its ownership by 15 percentage points from abound 65 per cent back in 2002-03.
Tevin Vongvanich, chief financial officer of PTT, said the management would seek an opportunity to talk with PTT’s labour union about this matter soon after there was a report that the labour union does not agree with the share transfer.
Charamporn Jotikasthira, president of the Stock Exchange of Thailand, said the government’s idea of reducing its interest in PTT and Thai Airways International would not impact overall trading or investor confidence.
This would also not increase trading liquidity in the two stocks, as there will be just change of hands in the shareholding structure.