Divestment of power facility stuck

Published: Thursday 15 December 2005

Out of depth The privatisation of Thailand's Electricity Generating Authority (egat) has been a bone of contention for the Thai government. Recently, the Supreme Administrative Court (sac) of Thailand ordered a temporary halt to egat's initial public offer (ipo) while deliberating a suit filed by a federation of consumers. The suit called for the abolition of two decrees concerning the privatisation of egat.

At first, egat's labour union opposed the government's attempt to privatise the utility and was successful for a while. But later, egat, under government instructions, gave egat workers a chance to buy shares at par value, winning over the union.

Despite opposition, the government pushed for an egat ipo in November. Environment groups and some opposition Democrat Party mp s demanded to know if listing egat would give private agencies control over the assets of the public utility -- of particular concern was the issue of control over water. egat' s monopoly being abused for the benefit of investors was also an issue.

The government failed to clarify if egat's privatisation would benefit only certain groups, or whether the transfer to private hands would lead to higher electricity fees. It also failed to address concerns regarding regulation of egat. Critics have demanded the government invite the private sector to build and operate power plants and keep egat and its national assets under the supervision of an electricity authority.

The government has claimed that the privatisation is a way to increase efficiency of service and lower the taxpayers' burden in supporting non-profitable state enterprises. Yet the government doesn't seem to be in a hurry to privatise loss-making state enterprises but is in a hurry to sell off profitable and efficient public enterprises like egat.

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