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THAILAND: Court Ruling Hits Privatisation Plans

by Marwaan Macan-MarkarInter Press Service
March 27th, 2006

Fresh from a landmark court victory that stopped the privatisation of the country's state-owned power utility, Saree Ongsamwong is setting her sights on stalling privatisation of other state enterprises that the government wants traded on the Thai stock exchange.

''The court ruling strengthens our campaign. This will make it difficult for the government to privatise profitable state enterprises,'' Saree, head of the non-governmental ‘Foundation for Consumers', told IPS. ''We will study the court's decision to block sale of other state enterprises.''

On Thursday, the supreme administrative court ruled that the planned sale of the Electricity Generating Authority of Thailand (EGAT), to raise an estimated 892.5 million US dollars, was illegal.

Judge Charan Hattakam held that the sale was mired in conflict-of-interest issues, would create an unfair monopoly for the new owners, that limited time was made available for a public hearing on the sale and that regulatory mechanisms were weak to prevent abuse, including expropriation of land and assets.

''The judgement strengthens the importance of people's participation in such a transaction, which the government ignored,'' Kraisak Choonhavan, chairman of the Thai senate's foreign affairs committee, said in an interview. ''And the conflict-of-interest will be another stain on this government.''

Such rebuke has significance on two fronts: the quest for privatisation has been a key pillar of Prime Minister Thaksin Shinawatra's policies since his government was first elected to power in January 2001. And privatising EGAT was symbolic of this policy, since the shares on offer were to be the country's largest initial public offering (IPO).

Saree was among a coalition of eleven anti-privatisation activists who filed the case on the eve of the IPO last November. Rosanna Tositrakul, director of the Confederation of Thai Consumers Organisations and one of the plaintiffs, told IPS at that time that the administrative court was their last hope to ''safeguard public benefits for the people.''

The recourse to judicial action was the final piece in the anti-privatisation drive that began in February 2004, when thousands of EGAT trade union members, backed by unionists and labour activists from other state enterprises, took to the streets to stall the sale of EGAT. During the height of that campaign, there were close to 50,000 protesters displaying their opposition outside EGAT's offices on the northern fringes of Bangkok.

During that period, Thai environmentalists also expressed concern over the ownership of EGAT, given the commitments it had made to back the construction of large dams in neighbouring countries, Laos and Burma.

Last week's ruling could not have come at a worse time for Thaksin, who has been facing anti-government protests since the beginning of February. His detractors accuse him of alleged nepotism, corruption and an abuse of the institutions created in Thailand's young democracy to check the powers of government.

Thaksin responded on Feb. 28 by calling snap polls, slated to take place on Sunday, but his political opponents want him to resign as caretaker prime minister first and have announced an election boycott.

The court's reference to a conflict-of-interest in the EGAT deal will, no doubt, bolster Thaksin's critics. They have been making conflict-of-interest charges against Thaksin ever since he began his first term as prime minister five years ago.

''The court decision dealt yet another blow to Thaksin, who is already under tremendous pressure from the middle class and civic groups to end his political career because of alleged large-scale corruption, which has stripped him of his legitimacy to rule,'' commented 'The Nation', an English-language daily, in an editorial on Friday.

In his first reaction to the verdict, Thaksin was quoted in the local media as having said: ''We need to look into what the court feels uneasy about. And we need to measure consumers' understanding of the privatisation.''

Part of the unease that the public had over EGAT's privatisation stemmed from the manner in which the equally profitable state-owned Petroleum Authority was privatised soon after the Thaksin administration first came to power. The lucrative shares were sold in an estimated 70 seconds, mostly to a privileged few.

The two-year public outcry against selling EGAT has put on hold plans to sell five other state enterprises. The Metropolitan Electricity Authority and the Metropolitan Waterworks Authority were to be sold in 2004, while the Port Authority of Thailand, the Provincial Waterworks Authority and the Express and Rapid Transit Authority were to follow in 2005.

The country's state-owned telephone operator was one of Thailand's 59 state enterprises destined for sale to private hands.

The sale of these state enterprises were among the conditions imposed by the International Monetary Fund as part of the package it offered Bangkok to help a bail out, following the 1997 financial crisis.

For Saree, the anti-privatisation activist, it is a policy that will bring little benefit to the Thai public. ''Concerns of the consumers and the public suffer and the people who profit from such sales are a few. Public interest should come first.''





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