Five 'superstructures' in the pipeline to increase productivity of state enterprises

“State enterprises have witnessed serious structural problems and we need a mechanism to tackle the problems at the structural level in the long term,” Banyong Pongpanich, a member of the State Enterprise Policy Committee or “superboard”, said in a recent interview.
“This is the heart of the reform agenda.”
Within three months, it will become clearer what the superstructure will look like.
The 56 state-owned enterprises have suffered low productivity and low profit of only Bt100 billion annually. They employ more than 300,000.
Ten years ago their costs amounted to only Bt1.5 trillion per year. Now they exceed Bt5 trillion.
They need to be restructured, as most are involved in infrastructure, which is crucial for economic development. Massive funds are injected into them in the hope they will drive the economy, but the benefits are mostly short-term, Banyong said.
The five options to oversee or manage state enterprises are as follows:
lUpgrade the superboard;
lSet up a government agency under the Prime Minister’s Office;
lEstablish a new ministry;
lCreate an autonomous public agency, like the Bank of Thailand or the Securities and Exchange Commission, with special laws to limit political intervention;
·Form a holding company like Temasek in Singapore.
The superstructure would strip state enterprises of their regulatory power, but the government would retain policy-making authority over them, as it subsidises social-welfare services.
It remains uncertain which state enterprises would fall under the superstructure’s control.
Each of the 56 state enterprises has its own characteristics. Some of them are profitable, but as they operate as a monopoly, efficiency cannot be measured.
This includes Airports of Thailand, the operator of six international airports.
AOT in the first nine months of last year showed a net profit of Bt12 billion. This might have been due to the passenger fee of Bt700, which is the highest in Asia except Japan. However, the Skytrax rating for Suvarnabhumi, one of the six airports, has continued sliding.
The restructuring of state enterprises will hurt many parties, especially politicians who will lose some sway over the enterprises, Banyong said. Next are officials, executives, employees and suppliers of the state enterprises.
“The committee has limited time to solve the problems of state enterprises, and they cannot be solved within a year. However, the superstructure will be a crucial factor in restoring the value of state enterprises for the country’s sake,” he said.