Thailand - proposal from govt to reform telecom operator concessions and recover THB 138 billions

[bangkok post] The State Enterprise Policy Office will soon propose that economic ministers move forward with amendments to concession agreements between TOT and CAT Telecom and private operators. Supa Piyajitti, the director-general of the State Enterprise Policy Office, said economic ministers on Dec 2 directed both TOT and CAT to investigate the issue and report findings within 90 days.

But she noted that over the past month, no meeting had been held about the matter, despite the clear policy direction given by the government.

The Finance Ministry has estimated that amendments to more than a dozen concession contracts between operators and TOT and CAT over the past decade or more should be ruled illegal and amended.

The contract changes, involving concessions to private companies such as Advanced Info Service, DTAC, True and Jasmine, are estimated to have resulted in damage to the state of 138 billion baht in foregone and future revenues.

At issue is a ruling by the Council of State, the government's legal advisory body, that the amendments should be considered void because of the state enterprises' failure to comply with the 1992 law governing large contracts and joint ventures between public agencies and the private sector.

The damage estimates include estimated losses of 87.3 billion baht for TOT and 50.6 billion for CAT Telecom.

Under the 1992 joint public-private act, a co-ordinating panel must be established to consider proposed concession amendments and impact on the government. The findings must then be submitted to the Information and Communications Technology Ministry and the cabinet for review.

The co-ordinating panel is to be chaired by a representative of the public agency that is the counterparty to the contract, in this case TOT or CAT, with other directors representing the Finance Ministry, the National Economic and Social Development Board, other state bodies as well as a representative of the private company involved.

Push to amend concessions