State firms plan investment spree to boost the economy

“Investment by the government and state enterprises is necessary to boost the economy while exports are down and the private sector has delayed decision-making on investment,” Ekniti Nitithanprapas, director-general of the State Enterprise Policy Office (SEPO), told a seminar over the weekend.

SEPO will revise the three- and five-year investment plans of 55 state enterprises this week to consider which project can be speeded up next year. 

“This year, the state enterprises’ investment plans total Bt300 billion, but they might actually invest about Bt230 billion. 

“However, I hope next year’s plan will increase investment by state enterprises to Bt400 billion,” he said 

This depends on the business plans of the state enterprises, which will be finalised next month.

“SEPO has four priorities to do. The first is driving the economy by pushing state enterprises to expand investment. Next is fiscal stabilisation. 

“The third is developing and rehabilitating state enterprises to be sustainable businesses for the long term, and developing their human resources to support the country’s economic growth,” he said. 

SEPO is considering the business rehabilitation plans of the two state enterprises that still face losses and cannot operate according to their debt-restructuring plans approved last year. 

On September 7, the State Enterprise Policy Committee will consider the rehabilitation plan of the State Railway of Thailand, which focuses on how to manage its greenfield assets consisting of 36,000 rai of land nationwide. 

This will be the way to turn around the business from showing losses to showing profits by revising all of its rental contracts.

The Islamic Bank of Thailand is proposing to set up an asset management company to buy debt worth Bt53 billion from the bank.

It will then consider increasing its registered capital toBt10 billion to reduce its Bank for International Settlements ratio.

Next it will complete the deal to bring on board a new partner to help develop the bank.

“We have two or three banks that are interested in investing in Islamic Bank but the deal cannot be done because they are concerned about the bank’s BIS ratio, which is still higher than the normal rate, “As a result, we have to restructure the bank’s financial results before finalising the deal with the new partner,” he said. 

The next five state enterprises under rehabilitation have succeeded in restructuring their business and improving their financial results.

They are Thai Airways International Plc, the Small and Medium Enterprise Development Bank of Thailand, TOT Plc, CAT Telecom and the Bangkok Mass Transit Authority. After the Cabinet approved the State Enterprise Bill last Tuesday, SEPO is ready to prepare the process to set up the organisation and the operation under the new act, which may be effective next year after the National Legislative Assembly passes it.