By Erich Parpart
SEPO’s priority is to make sure that state-owned enterprises (SOEs) support their subsidiaries.
All of the seven loss-making SOEs have submitted business-rehabilitation plans and SEPO has promised that it will come up with a tangible reform plan and draft an SOE management bill, which will be presented to the public, the Cabinet and then the National Legislative Assembly over the next two months.
The reform plan will also include the setting-up of a holding company for state enterprises listed on the Stock Exchange of Thailand.
"The total sum that can be raised from the divestment, ranging from 2-5 per cent of shares in each company, may not be as high as Bt100 billion as expected by the Finance Ministry.
"The selling of these shares is only a small part of the plan to restructure the [SOEs’] Bt720-billion public debt," SEPO director-general Kulit Sombatsiri said.
The Bt720 billion accounted for 12.6 per cent of the Bt5.73-trillion total public debt – equivalent to 43.3 per cent of gross domestic product – as of March 30. Of the Bt720 billion, 72 per cent or Bt518.4 billion came from the rice-pledging programme. The remaining 28 per cent or Bt201.6 billion came from two loss-making transport SOEs – the State Railway of Thailand and the Bangkok Mass Transit Authority.
"The issuing of government bonds to cover the debt plays a much bigger role than the selling of these shares," Kulit said.
Most of the shares that the ministry is thinking of selling are from companies that have no interest for the public, such as private hospitals and companies that produce marble or condensed milk.
Kulit said the ministry was not going to sell any of the SOEs’ shares.
SEPO is assessing how much would be generated form the sale of the shares. "But this is not our priority and we do not have a time frame for it," he said.
The SOE reform bill will include the establishment of "owner organisations" that will replace ministries in supervising SOEs. The ministries’ only job will be to make and amend regulations. The new owner organisations will take care of and make sure that SOEs can generate a profit or limit losses. This will add accountability to the management of SOEs.
Public-service obligation, public-service assessment and corporate-governance measures will also be implemented in the new SOE management system.
"There are three phases of the five-year reform strategy to mandate SOEs. The first, involving the reduction of some SOEs’ roles, will be presented between July and August. There will be a much clearer reform plan for state enterprises in September," he said.
Under the new system, non-listed SOEs will be managed by an owner organisation and their leader and directors will be selected from a pool of applicants. A nominating committee will be formed to appoint "only qualified people with extensive experience in the field of the SOE that will come under their management", Kulit stressed.
Listed SOEs will be managed by a holding company that will be set up along the owner-organisation model.
"The board members of SOEs will no longer be changed with every government that comes to power. The management team must have the right qualifications and enough experience or else they will not be selected for the job," he said.