SCOPING MISSION ON PRIVATIZATION
THAILAND F' :~ yVolume 11 (Supplementary Reference Materials)
REPORT BY Gordon 0. F. Johnson & Marion Thomson
CENTER FOR PRIVATIZATION 2000 Pennsylvahia Avenue, N.W. Washington, D.C. 20006
Project No. 47 July 1987
Prepared for the BUREAU FOR PRIVATE ENTERPRISE U.S. AGENCY FOR INTERNATIONAL DEVELOPMENT ESIL
CENTER FOR PRIVATIZATION
The Center For Privatization was established in 1985 to provide expert advisory services to developing countries and their indigenous private sectors in planning and implementing programs to divest and privatize their state-owned or controlled enterprises and activities. The Center is fully funded under a major contract between Analysis Group Inc. and the Agency for Interna tional Development. Participating subcontractor compa nies include:
Arthur Young & Co. Equity Expansion International Ferris & Company, Inc. International Phoenix Corporation Public Administration Service
The Center draws upon its consortium of six companies, and others when appropriate, to provide a wide range of qualified specialists in fields from agriculture, indus try, financial and other services, transportation, and utilities with experieace in areas related to privati zation, such as:
Corporate Restructuring Employee Stock Ownezship Equity Placement Financial Analysis and Valuation Labor Relations Legal and Regulatory Studies Macro/Micro Economic Analyses Marketing and Market Research Project Design and Evaluation Strategic Planning Taxation
175() Niw YORK AVNUEi. N.W. WtN iING'I(N. I).('. 2(XX)f (2021 347" 1s4 THAVIAND
SCOPING MISSION ON PRIVATIZATION
Volume II
(SUPPLEMENTARY REFERENCE MATERIALS)
REPORT BY
Gordon 0. F. Johnson & F. Marion Thomson
CENTER FOR PRIVATIZATION 2000 Pennsylvania Ave, N.W. - Washington, D.C. 20006
Project No. 47 July 1987
Prepared for the BUREAU FOR PRIVATE ENTERPRISE U.S. AGENCY FOR INTERNATIONAL DEVELOPMENT THAILAND SCOPING MISSION
(Volume II)
Table of Contents
(SUPPLEMENTARY BACK-UP MATERIAL FOR AID)
Page
Section A: NSEC Membership and Responsibilities 1
Section B: NSEC Statement of Work 3
Section C: Agendas 5
Section D: NESDB 6th Plan 10
Section E: Comptroller General: "State Enterprises: Basic Problems" 28
Section F: Bangkok Newspaper Clippings 56 Section : Establishment of the National State Enterprise Couittee (NSEC)
For effectiveness monitoring of state enterprlbe and solvIng their problems, and also conformance to goveimment policieesnd the Sixth hational Boonoec and Social Development Plan, it Is therefore expedlent to form a National State Raterprise Committee to undertake said tasks*
The Prime Minister, with the consent of the Cabinet, then ordered the formation of Vational State Enterprise Co,-mittee, composing of
1. Deputy Prime Minister Chairmn (Ada. Sonthi Boonyachal, RTd.)
2. M.nister of Finance Deputy Chairman
(Dr. buts* Singjhsazts) . Minister to the Prime Minister's Office Deputy C i % (Flying Officer Suli Mahasantana) 4. Minister to the Prime Minister's Office Deputy Chaman
(Dr. M.eehal. hoeupan) 5. Permanent Seretary for Finance Neaber
6. Secretary Ceneral .of the Office of the Member ktionl Voonoaio z4 Social bove.Lopmenz Boaz 7. Director of the Budgt Bureau Member 8. Auditor - Gbneral Mmber
9. Secretary General of the Office of the Member .udical Council
10. Governor of the Bank of Thailand lember
11. Director General of the Department Member
of Labour 12. Mr. Nukul Prachnabmoh Mmber
13. Mr. Pajitr guathaveekul Member 14, Mr. Suean alaicathien Member
15. Mr. Amaree Silr. - on MaA'A (C.L-fr Meber 16. Mr. O1arn Jaysprawat Momber
17. Mr. Anuparb Sunanata Ncspa Member 18. Secretariat of the National Security Council 19. Permanent Secretary for Interior Member 20. Permanent Secretary for Industry Member
1 The Comlttew shall have the follow4n reeponlbIlilUee I
1. 7b monitor sta e terpr ia.l performanOes ensu-ing their oonformlty vith Vvernmentoe policlie and development plans as prescribed in the SxthO Natiosal Eoomiao and Soolial Develop~nt Plan .
2. To make reoomendatlonu on appropriate measure to solve state enterprise's fizanoia problms
3. To make recomndatlons on utilities pricing in the mannfr that they refloot truo eote and oonfom to governments pollolee
4. To make recommendations on privatising Ludellno3 and procodureo appllo^ le to all priwatizing progr umes.
5. To coordinate into aia state enterpries and concerning agencies to brlng about perfomance effectiveneea.
6. To make reoommendatlons on the solution to sa te nterprlsoe
)abour problems.
7. Th make 2.ooumandatlon gdellne on the else of mapover specifloally to industries and in conformity to governmeav policies
0. To perform other functions as deeignated by the cabinet
2 ,ection:
Statement of Work for USAID Assistance as Approved by the NSCE (April 1987)
le Backround Informatiop
Whereas the overall performance of state enterprises mway consider
to be of greut concern to the governmn', -nd the Fifth (1982 - 86)
and the Sixth (1987 - 91) National Ru-nomo maE Social Dsvelopment Plans
prescribed for state enterprise effeotiveness, the ational State
btorprise Committees therefor%, dom It expedient to Jmprove state
enterprise op.ratioo and jwollcic. O possible alternative is to
set up a pro#arz to stdy 'the approaohea for state enterprise's
efficiency enhnicement w- thte aawlatance from the USLID. hopetully,
the recommendatJons fon the pro&n-=e vil be translated into
effect and bring about desired effeotiveness.
2. Objectivos of the PromaEM
The efficienoy vibancement prograue is envisaged to consist or
two major objectives I
1) Specify ng perforsnoo stanelards and indicators
that can be used to determine w1hther any atato enterprise
should be retained or privatised
' Identifyins patterns and procedures or"6opration fr
efficiency enhancement (if it In decided to retain)
or for privatization (if It Is decided to privatlse)
In ordoer that the reoommandatlons be applicable, It is therefore
essential that the studies be carried out by Mai authoritesso
Thai exports, In conjunOtion with for igh experts.
3. The probable USUD assisi vce progrome may conceivable be divided
Into three phames
Phase I Designing the iftoratinn syston to analyze aggregate
or seotoral conditions or problema of state enterpriesp,
3 1) collectla Iatresatlon, quantitatively and quallttUvely,.
In a distincUve manmer.
2) ldetfyJng problem. and dltflcultios faoed by the top, middle mana4gment and lover levels,
3) pin-pointIng any typical strength, we4me-,m problem
ad difficult encountered by local or foreln enterprise operating in sase field with state enterprises.
(For example see Cooper and Lybrand's Reports)
hase 11 Desinin
1) specifying perfolnstioe standards or Indicutoreq
that can be used to determiue whether my state enterprises
should be retained as prlvatzed by using Information
dariving from Pho 1, SA-lyalag condlUos and problemu of Jntemrna market, 2) fornulating of strategy to solve state enterprise to Identity faectoxe afftUng or hindering privattatlan problems (disogard of rotertion or privatlsation) scheme* at various levels, by sector or particulcar state
enterprieo,
3) reoomendIng specific policy lor the retang state caterprise
Pse DesigoIng priva tation patterns atnd proceduros, by
1) Rnalyalne privatitation patterns and procaduren e.g.
l1quIdaUng, WItate private Investment etc.$
defnlng fruwork And procedurej of privatisation
pattern applioable to respeotive authoritios e.g.
Cabinet, Board of Dir sitors or irectors, us well as oonsJderitW the advantagee and disadvantages pertaining
to such patterns and procedures,
2) rsecoe ending appropriate privatizaton patterns And
proceduzes, by sector or to particular state enterpri eo
3) analyulzg eonditlns and problems of Internal arketq
to identify tetors affecting or Wnderinig privatization
4 NSEC AGENDAS
The first meeting -of the National State Enterprise Committee (November 26, 1986)
The agenda consists of the following:
1. Presentation of the chairman (list of members of the Committee; selection of 3 additional members; scope of duties and responsibilities of the Committee)
2. Discussion on the following topics:
2.1 Specifying the duties and responsibilities of the Committee.
2.2 Summary of importrnt items that the previous national state committee had done.
2.3 Privatization in Thailand.
2.4 The first thing that the Committee must do. (monitoring and evaluating the performances of state enterprises though their financial reports that must be turned In to the Comptroller General's Department every 3 months, and If certain problems are found, the Committee will provide necessary recommendations.) 3. Other items to be discussed (if any). (none)
5 The second meeting of the National State Enterprise Committee .January 16, 1987)
The agenda consists of the following:
1. Presentation of the chairman. (3 additional members of the Committee bave been selected: (1) Secretary-General of the National Security Council, Secretary (ii) Permanent for Interior, (iii) Permanent Secretary for Industry.) 2. Certification of the (previous) first meeting (November 26, 1986). 3. Summary of unfinished business of the previous national state enterprise committee. (How to present accounting reports of those state enterprises concerning their sub-projects arising from the main projects; how to penalize financially the State Railway of Thailand for its failure to promptly repay the loan.)
4. Discussion on the following items: 4.1 Bonus payments to employees of the Port Authority of. Thailand. 4.2 General situation, problems and rectification of those prob lems of the Textile Organization.
4.3 Privatization 4.3.1 Before certain state enterprises are privatized, approval from ministers who supervise those enterprises should be re quired. 4.3.2 Feed-back reports ont those enterprises that have already been privatized. 4.3.3 Proposal to privatize certain enterprises that have established been or acquired for other purposes (e.g., Dhipaya Co., Insurance Ltd., Syndicate of Thai Hotels and Tourist Enterprises Ltd., Cholburi Sugar- Corp., Ltd., North East Jute Mill Co., Ltd., Sugar Factories Inc., Bang-Pa-In Paper Mill.) 4. Labor problems
4.1 Labor problems of the State Ratilway of Thailand 4.1.1 Conflict between the employees and the management re garding the adjustment of wage rates from daily and hourly basis to monthly basis. 4.1.2 Conflict regarding the specifications of holidays. 4.2 Pension for retired employees.
5. Other Items (if any) (none) 6 The third meeting of the National State Enterprise Committee (April 16, 1987)
The agenda consists of the following:
1. Presentation of the chairman. 2. Certification of the previous meeting (January 16 1987). 3. Discussion on the following Items: 3.1 Responses to labor union's complaints regarding privatizatlon.
3.2 Situation and problems of the Textile Organization.
.3.3 The need for USAID's assistance to: 3.3.1 lay down the Information-collecting procedure that will help pin-point the general situation and problems of state enterprises. 3.3.2 specify Indicators that can be used to decide whether certain enterprises should be privatized. 3.3.3 specify the types of privatizatlon and how to achieve them.
3.4 Prlvatization procedure.
3.5 Scope of work of the Committee's secretariat (the work of the secretariat must be consistent with the the 8th 6th and National Economic and Social Development Plans.) 4. Other items (if any) (none)
7 The fourth meeting of the National State Enterprise Committee (Originally scheduled on June 10, 1987, but postponed to June 12, 1987.)
The agenda consists of the following:
1. Presentation of the chairman.
2. Certification of the previous meeting (April 16. 1987). 3. Discussion on the following Items: 3.1 Short-run plan to Improve the business performance of the Thai Maritime Navigation Co., Ltd. 3.2 Bonus payments to employees of the Port Authority of Thailand. 3.3 General basic problems of state enterprises.
4. Other items (if any) (none)
8 __Section: D
The "State Enterprise Development Plan"
is one of the ten plans in the
Sixth National Economic and Social Development Plan
(1987 - 1991)
10 Contents
Page Chapter 1 Introduction 1 Chapter 2 Results and Development Issues 3 1. Policy Framework in the Fifth Plan 3 2. Results of the State Enterprise Development during the Fifth Plan and Development Issues 3 2.1 Performance and Financial Status 3 2.2 Decline in the number of State Enterprises with deficit
2.3 Increase in investment 4 2.4 Increase of foreign borrowing 4 2.5 Mobilization of capital 5 2.6 Increase in the Reinvestment of earnings 6 2.7 Price setting, service charges and monopoly 6 2.8 Dependence on government funding supports 2.9 The Role of guaranteed loans to the State Enterprise 7 2.10 Problems with accumulated debt from State Enterprises themselves and from the government 7 2.11 Management an development of State Enterprise personnel -87 2.12 Goals and Planning
2.13 State Enterprise Monitoring System 9
11 Page Chapter 3 Framework for developing State Enterprise 10 I. General Frame-;ork 10 1.i Maintenance of the national financial stability 10 1.2 Improvement of management efficiency and the upgrading of service provided by State Enterprise 10 1.3 Review of Role and the improvement of State Enterprise monitoring 10 2. Framework for specific considerations i0 2.1 Investment 11 2.2 Mobilization of Capital 11
2.3 Guaranteeing of Loans -312. 2.4 Price setting and service charges 'i-T 2
2.5 Personnel Management • *13 2.6 State Enterprise Management System J& 2.7 Privatization of State Enterprise
12 Chapter 1:.Introduction
The development of Thai state enterprises starting First to the Fifth Plan from the (1961 - 1986) has evolved in the following manner:
One The number of Thai state enterprises has 100 in the decreased from over past to nearly 70 at the present time. is in sharp contrast This scenario to the case of the majority of developing countries whose number of established state enterprise is always on the rise.
Two Inspite of the reduction in number, the size of enterprises administrative the state and investment expenditure have increased rapidly from 72% of 1977 national budget to 109% of the 1986 national budget. The investment budget of the state enter prises themselves especially in the past eight years, has increased 20% annually, on the average. Three
The debt of state enterprise accounts debt for 60% of the foreign of the public sector (guaranteed by about 90% the goverrunent) and of the state enterprise debt is foreign remaining loans. The 10% is made up of domestic borrowings.
Four
State enterprises remittance to from the government has declined 73% of the net profit during the Fourth the Fifth Plan to 42% during Plan because state enterprise earnings the actual were added to investment itself, increasing in proportion 10% of the from being investment budget at first to 20% later. Five State enterprise personnel has increased as a around 250,000 at whole to present. The number is likely to increase than 3% annually during the more Fifth Plan. (In contrast to' the civil service whose ceiling permits not more than 2% increase in personnel during this same period.)
13 Six
More than half of the 70 existing state enterprises may be termed are what as "large" operacions wich a roster of more than 1,000 employees. The efficiency of state enterprises in using their human resources, therefore, is an important iLsue that overall determines the efficiency of state enterprises and needs to be carefully monitored.
14 Chapter 2 Results and Development Issues 1. Policy Framework in the Fifth Plan The Fifth Plan has as is policy the' goal improving the' efficiency of state enterprise by . 1.1 Reducing government fundi support for the state enterprise (taken-from the national budet) and helping the state enterprises to be'self-relLant. 1.2 Readjusting prices and service charges so that state enterprises may have net income (as a percentage of capital) at a rate not lower than the interest rates of government bond and to see to it that the debt to equity ratio of atate enterprise is reasonabl 1.3 DeVeloing a generalplan for every state enterprise in order to clearly outline tne various aspects of production, marketing, income sources and the reduction of expenses. 1.4 Considering the shift of management style to a more business-like manner; closing out or selling state enterprises that have not performed well, and .experience-d' a aeLicT or a number of years wl-houC reasons.
The Fifth Plan has also stipulated a close monitoring of state enterprises expenditure and investment which have consequences on the monetary and fiscal stability of the country as well as the incurring of foreign debt.
2. Results of State Enterprise Development during Pl-an ain__d D-everoment issues . the Fifth
2.1 Performance and Financial Status As far as the performance of the 59 state enterprises which requested for investment fund from the NESDB is concerned (in accordance to the regulations on Investment Budget for State Enterprises (1979)1 the majority profited during the Fifth Plan. The amount was roughly 57717 million (Bahts) or aroud 4.2% of their total assets of these state enterprises, In comparison, Ehe rate of return of large Thai private corporations, was, on the average, almost 9% of the total assets value during the same time.
15 2.2 Decline in the number of state enterprises with deficit The number of State Enterpriscs "with during deficit" declined the Fifth Plan. During the early years of the Plan, there were about 18 state enterprises which lost around 2,292 million (Bahts) whereas in .years, the ending only 11 were performing poorly, losing about 2,117 million (Bahts). Such an outcome resulted the from inability to readjust the service charges quickly, the competition with the private inefficient sector and the organization. The 2 state enterprises with a deficit of more than 500 million.Bahts annually the during Fifth Plan include the Bangkok Mass Transit Authority (BMTA) and the Railway Authority of Thailand (RAT). 2.3 Increase in Investment The investment by state enterprises during the Fifth Plan increased almost two-fold when compared of with that the Fourth Plan (from 89,000 million to 170,000 million bahts). The majority of this increase communication, was in transportation and energy and amounted to 87% of the total investment budget of the Plan. Fifth As a result, the administrative as well investment as budget of state enterprises at the moment is larger than the national budget. 2.4 Increase of Foreign Borrowing Since the size of the investment budget has rapidly, expanded state enterprises had to resort more and more on external loans. This resulted from the insufficient fund derived from the earnings of state enterprises themselves, the government funding support domestic as well as sources. The total investment fund from external sources for the state enterprises, therefore, has increased from 47,264 million bahts Fourth during the Plan to 76,1.92 million bahts during the Fifth Plan leading to an increase in the total debt of state enterprises from 57% of the total debt of sector the public during the Fourth Plan to 65% during the Fifth Plan. Such an increase deeply effected the governments' debt structure and financial stability. State enterprises' dependence on external lendings therefore constitutes an important issue necessitate that the mobilization of capital from domestic sources as well as the increase of capital for the state enterprises that are expanding.
16 2.5 Mobilization of Capital
Mobilization of capital from domestic sources has its limitation and together with the high interest rates as well as the short-tine allowed for repayment make it difficult to acquire enough capital needed for investment purpose by the state enterprises. If state enterprises were to increase their borrowings from domestic source.s, such a move will definitely effect and even pre-empt the mobilization of capital by the private sector.
The r.. .n issue, therefore, is whether the state enterprises should increase the proportion of capital mobilization from their own sources of income or limit the number and nature of investment as well as the increase of capital or establish ajoint-venture with the private sector which inci--e t e ransfer of cta ,'- -- r in the future. Many state enterprises' operat-ions can be more effectively administered by the private sector. This would amount to a reduction or restrictions of investment by state enterprises to only the main ones.
2.6 Increase in the Reinvestment of Earnings The mobilization of capital from state enterprises' earnings themselves has increased proportionally from 10% of the investment fund during the Fourth Plan to 20% during the Fifth Plan which reflected a much improved mobilization effort. At the same time, it also led to a reduction of remittances to the government from 73 of the net profit during the Fourth Plan to merely 42 during the Fifth Plan. Increase mobilizationofcapitdlfrom state enterprises' earnings, therefore, would have to be considered in conjunction with the remittances to the government.
2.7 Price setting, Service Charges and Monopoly
The establishment of commodity prices and service charges of state enterprises is still conditioned by the respective ministries in charge. Some state enter prises have difficulties in readjusting prices and therefore had to face deficit. The cases of state enterprises dealing with transportation and public utilities are some examples of operations where prices established are lower than the break-even point.
17 At the same time, state enterprises that can easily readjust prices or those which monopolize the production of certain commodities and services and lacks competition can set prices that are higher than normal and .acquire huge profits as a result which Sdeffinitely 'exerted..certain effects on the production costs of other industrial venture as well as the compe titiveness of Thailand.
2.8 Dependence on Government Funding Support
State enterprises received governmant funding support for investment in the amount of 9,000 million bahts during the Fourth Plan and 11,500 million bahts during the Fifth or 10% and 7% respectively, of the total investment fund of the two Plans. There is also additional funding to offset the deficits of state enterprises which are inefficient. Or the government may also purchase certain commodities or acquire ser vices from state enterprises because the prices set for their products are lower than what they should be. Or the government may dispense funds as a part of its policy. All of these actions taken by the government side are responsible for the inefficiency of" state enterprises that received assistance and are not conducive to the promotion of their competitiveness.
2.9 The Role of guaranteed loan to the state enterprises
Since the government is involved in guaranteeing the loan of state enterprises from both domestic as well as external sources, the state enterprises pay a lower interest rates than the private sector due to a lower risk factor. Together with the special privileges accorded to state enterprises from the state banks in the form of a lower interest rate than the private sector, one may be justified in saying that these constitute certain forms of indirect support but at the same time making it quite difficult for the lending party to evaluate the investment plan of state enterprises.
(Because the government is seen as backing up the deal.) In many cases, these investment plans are not feasible at all without the necessary backing of the government.
18 Therefore, if increase efficiency in investment by the state enterprises is called for or if structural readjustment toward a more business-like management is implemented, the borrowings of state enterprises should be mcnitored in the samie manner as practiced by the private lending institutions.
2.10 Problems with accumulated debt from state enterprises themservesa-ndn rom the governmen
State enterprises with outstanding debt to the government and among themselves are increasing number. in The debt amounts to 6,500 million bahts at the moment making the state enterprises that are granting the* loans face liquidity problems. Production costs and service charges also increased as a result. Some systematic procedures should be established for tackling debt problems in a quick manner, especially those delaing with energy, electricity, water and telephone charges which are long overdue. State enterprises should consider using a 3tandard procedure for collecting service charges from other state enterprises or from the government just like the way it's done with the private sector. 2.11 Management/Development of State Enterprise Personnel
Managing and developing state enterprise personnel have to deal with the following problems which require attention namely:
1) The lack of managers with experience and appropriate credentials at the committee members level, managing directors and administrative level. The position of senior director as well as committee members of many state enterprises are usually political appointees and subjected to constant changes leading to a lack of continuity in management, the lack of appropriate experience and damage to many state enterpriese. The majority of state enterprise committee members or 86% of them are civil servants; military and otherwise. Private enterpreneurs constitute only 17%. This issue pertaining to the personnel at different levels must be given due consideration in the process of managing and developing state enterprise personnel.
19 2) Monthly salary and remunerations including health care, tuition for the children, contributions to the pension fund and overtime pay in many places are quite high relative to the civil servants or the private sector. On the average, they are higher than the civil servants by 55% and higher than the private sector especially at the "middle" and "lower" levels. *The high expenditures for state enterpiise personnel therefore, is transferred to the production costs and service charges. In some cases, it is the main cause responsibile for the deficit of the whole operations because the expenditures for personnel increase proportionally higher than other expenses. The salary and remunerations for senior manager of the state enterprises are significantly lower than the private sector making it difficult for state enterprises to maintain senior manager within their fold or to compete favorably against the private sector. 2.12 Goal and Planning
State enterprises were required to provide an operational plan during the Fifth Plan although the formulation of such general outline has not proceeded in a satisfactory manner capable of providing a guideline for implementations. The plan also lack a clearly defined goal for each state enterprise to use as a general framework for investment purposes and the setting of prices, since each state enterprises were set up with different goals and roles such as: to provide public goods and basic public utilities, to maintain security.and.dispense social welfare, to find income for the state and also to initiate certain. industries in the countries, etc. As time passes by, these roles should be reviewed and made compatible with the structural changes in the national society and economy. It is, therefore, necessary to review the role and nature of investment of the various state enterprises under the constraints stemming from the financial and monetary situations of the government, technological change, limitation in management and the capability of the private sector. A clearly defined set ofgoals during every period of the Plan is required.
20 2.13 State Enterprise Monitoring System
During the Fifth Plan, the government has paid increasing attentiOt--ta the management of state enterprise. Beside formulating the general state enterprise, plan, a national committee for state enterprises was established-in 1985 with the power to gonitor.state enterprise operatio and -thEm to follbw thb government policy. This coMm -e'e-as-o established a Joint Secretariat composed of representatives* from fhe Office of Fi~iancial Economy;' Budget Office and the NESDB but lacks a permanent staffs which would be responsible for analyzing systematically relevant issues to be presented to the Standing Committee.
Right now, the task is left to the personnel from the three cooperating institutions. The effectiveness is still limited therefore.
The NESDB has also upgraded its procedures for evaluating the annual investmenc budget of sta-e- enterprises, presented a general picture to the caln and t Menified key problem issues of each state enterprise in-a clearer and more comprehensive manner-I than in the past.
21 Chapter 3 Framework for developing State Enterprise 1. General Framework during the Sixth Plan has as its objectives the following: 1.1 Maintenance of the National Financial Stability by trying to estaslis-certain measures aimed at reduing the external loans, increase the mobilization capita1 of from domestic sources especially from the earnings of state enterprises themselves which. -hSve a should higher ratio as well as limit the size and nature of investment of state enterprises. 1.2 Imp ef qa management efficienc nd the upgrading 6t__Js.-ervi--c-e rovidd Ostate enterpt.-.ses -1- order to Te enough to operate continuaITy and to be acknowledged widely for providing good service international of standard at a reasonable price. These will be achieved by encouraging changes toward business-like a more operations and the search for ways that would help augment the income and reduce production cost which would enable state enterprises self-reliant to be more and at the same time reduce the need *for government support. 1.3 Review of the Role and the improvement of the state enterpris-e mo-nitoring so that there may-'e an-opening for private sector involvement and joint-venture with state enterprises. The various stages privatization for will also --makeclearer and ea y to implement.. An improvemfnt of m6niA government ng*b th& both at ministry level and as a whole will be geared toward the established various goal. Laws and the regulations need to be revised in .order to provide more flexibility to state enterprises. 2. Framework for specific considerations In order to develop state enterprises according to the priorities cited earlier, it is important developmental to outline a and administrative framework for the various aspects as follows: 2.1 Investment 2.1.1 The Sixth Plan has set out to sustain the investment level of the pubTic setor including the state enterprises in order maintain the public sector's ability of debt payment which is set at 11%. of the income from exports. Therefore, the size of investment by the state enterprise during the Sixth Plan has to be readjusted on a yearly basis in relation to the economic and financial situations of the country.
22 2.1.2 Investment by state enterprises should achieve a return in the amount not lower .than the interests of government bonds since it would enable sate enterprises to limit their investment to only those with good returns. State enterprises with designated operations by the government will be excluded from consideration.
2.1.3 There should be a reduction of investment 'or joint-venture in certain continous operations whether in the beginning stage or final stage if such ventures are better performed by the ,pr vace sector. There should also be investment in joint-venture where the private sector is already operating in order to lessened the financial burden and, at the same time, allow investment in other activities that are really important. Investment in the form of social welfare should also be reduced or stopped altogether. 2.2 Mobilization of Capital
2.2.1 Reduce external borrowings by establishing a ceillng forfcreign loans of state enterprises during the first three years of the Plan so that the external loan would be of the same size as that of the Fifth Plan in the latter years. In the final stage of the Plan, a ceiling should be set to correspond to the financial situation of the country. 2.2.2 The rate of investment taken from the earnings of each state enterprise should not be lower than 25% of the investment fund while the debt service coverage ratioofl.5:1 should be maintained. If the state enterprises are capable of mobilizing capital from their own sources, foreign loan during the Sixth Plan could be reduced by 42,500 million bahts. 2.2.3 Mobilizing capital from the earnings state enterprises themselves would lessen the amount of remittances to the government. In any case, remittance to the government by each state enterprise should not be Lower than income tax rate.
23 2.2.4 Encouragestate enterprises to-increase their capital in order to have an acceptable deDC to equity ratio. State enterprises could increase their capital by sellling shares to the public which would enable them to mobilize capital locally.
2.2.5 Consider taxing'state enterprises (sales tax, Income tax, etc.) in order to 'promote fairness into the competition between the publlc and private sector thereby facilitating a more efficient use of resources and more income for the public sector. 2.3 Guaranteeing of loans Reduce the burden of guaranteeing loans for state enterprises as well as-the support granted to them in the form of low-interest government loan. The government would only guarantee loans that are for investment in accordance to the government policy.
State enterprises with efficient management and good returns meanwhile, will be permitted to guarantee the loans the;.ielves. 2.4 Price setting and Service Charges
State enterprises should consider setting prices and services charges in order to be s%! -re ant
2.4.1 Making sure that they cover the costs of production, service and operation and provide enough return that allows for future expansion and increase in investment. Cease the 2.4.2 /Support (except in cases where it is vital for the achieving of goals set by the government) by leaving the burden to those who benefit from thi services. 2.4.3 Abolish indirect support (except in cases where the government has specifically ask for assistance) such as the guaranteeing of loans, and the lending of funds to state enterprises with low interest rates.
24 2.4.4 In cases where the government has to regulate prices and service charges, of state enterprises that operate in a monopolistic fashion, the setting of prices and service charges need to be compared with normal changes ior similar benefits especially those dealing with energy and international telecommunications, for example. 2.5 Personnel Management
2.5.1 Let the state enterprises formulate a personnel plan and incorporate it into the general plan. This plan would set out a clearly-defined set of goals with respect to personnel and production.
Personnel should be increased only in sector that has to expand in accordance to the overall goal. 2.5.2 A readjustment of salary scale and other remuneration of "maudie and "lower" level personnel to accord to their counterparts in the private sector. 2.5.3 .F- the overtime pay and all kinds of social welfare benefits not to exceed 15% and.T' the respective salaries in order to improve labor efficiency and reduce production costs per unit.
2.5.4 Support the irjjgof private agencies that provide security personnel, bus servlces for employees and cli ning service for example. 2.5.5 Encourage the hiring the private managers by offering appropriate remunerations. 2.5.6 Readjust the balance of the state enterprise( committee memberships by selecting and appointing capable people with the managerial know-how vital to the respective enterprises, distinguished scholars and successful businessmen in order to facilitate a more efficient and business-like management in the long run.
25 2.5.7 .The. senior administrative executive enterprises of state has to be a person who has the managerial know-how and capability appropriate to certain state enterprise. or He she shculd also be able tc work. full-ti and e in a continous manner which "provide enough time for achieving good management results. 2.6 State Enterprise Management
2.6.1 In order to manage and develop state enterprises in accordance to framework, the general the ministries together with agencies responsible should .establish immediately a well-defined set of goals for each state -- enterprise so that state enterprises may use such goals as a guideline when formulating their respective These plans. plans should be formulated by giving attention to all due considerations should and be easily be implemented in a constructive and continous manner. 2.6.2 -A central aenc should be established to -monitorand evaluate the enterprises prtrmn or stateW so that they may evolved according to the plans. Improvement services of is emphasized together with the eFFMcEiency and stability in providing services the aside from the operations according to the established financial goal. 2.7 Privacization of State Enterprises 2.7.1 Consider the privatization of state enterprises in order to improve efficiency operation which may be obtainable in 3 ways namely:
transforming the internal management style of state enterprises to business-like be more by improving the efficiency in administration, investment and personnel management and also allow private sector to be involved in management. Allowing private sector involvement in renting, bidding and concession.
26 Transferring the ownership, partial or total by selling shares, sales. 2.7.2 Changing the policy on the privatization of state enterprises into actual implementation requires the following; Let the central agency take responsibility for fo-mulating the policy for privatization.
This central agency must have secretariat a working full-time and .responsible for covering all important asepcts in order to analyze the problems and coordinate with the .r.esp.ective ministriesand institutions involved in choosing state !enterprises to be privatized. The secretariat will the study laws, regulations, constraints and means for peivatizingtogether with 9 ministries and institutions involved order in to present the findings to the central agency. Develop a capital market to handle the selling of shares by state enterprises.
27 Section: E
State Enterprises: Basic Problems
There are 67 state enterprises at the moment, which, based on their mode of operation and organizations, can be divided into 5 categories in accordance with the Cabinet Decision of June 12, 1984:
1) State enterprises that are directed primarily towards the gaining of direct income for the government such as the Government Lottery Bureau and the State Tobacco Monopoly (under the Ministry of Finance).
2) Public Goods and Utilities such as:
- Electricity Generating Authority of Thailand and the Metropolitan Water Authority, for example, and;
- Expressway and Rapid Transit Authority of Thailand and the Airport Authority of Thailand.
3) Priority Areas designated by the.government policy include:
- Financial institutions, such as the Krung Thai Bank and the Savings Banks;
- State enterprises that deal with:
- conservation and utilization (such as the Petroleum Authority of Thailand and The Forest Industry Organization);
- agriculture and commerce (such as the Dairy Farming Promotion Organization of Thailand and the Rubber Estate Organization); and
- promotion (such as the Tourism Authority of Thailand arid the Sports Organization of Thailand). 28 4) State enterprises established to attain a security of supplies on a nation-wide basis (such as the Preserved Food Organization and the Glass Organization).
5) State enterprises established or acquired due to other reasons (such as the Dhlpaya Insurance Co., Ltd. and the North East Jute Mill Co., Ltd.).
(Please see Appendix I for details).
During the 1986 Fiscal year, the 67 state enterprises (except for the [ank of Thailand, the Bangchak Petroleum Co., Ltd. the Petroleum Authority oi Thailand, Prachin Province Commercial Co., Ltd., Lampun Province Commenrcial Co., Ltd., Surin Province Commercial Co., Ltd.) had a total capital of 113.9 billion bahts, a total debt of 462.7 billion bahts nd total assets of 576.6 billion bahts. During the 1986 fiscal year, 50 state enterprises made a profit of 15.7 billion bahts whereas 11 had a deficit of 2.1 billion bahts. The net profit for 1986, therefore, was 13.6 billion bahts and by analyzing the general performance of state enterprises from 1985 1986 on, the following ratios may be calculated.
1984 1985 1986
1. Rate of profit to capital (%) 17.32 12.59 11.92 2. Rate of Return to total assets (%) 3.85 2.53 2.35 3. Total 4 oineme: total assets (%) 41.79 41.90 10.07 4. Expenses: total income (%) 90.77 93.96 94.12 5. Net profit: total income (%) 9.22 6.04 5.88
29 From the comparison above, it appears that there were noticeable declines in the rate of profit to capital, the rate of return to total assets, the rate of total income to total assets, and the rate of net profit to total assets (see Appendix 2 for details). The problems and obstacles of state enterprise management may thus be summarized under the following headings.
1) State enterprises' internal management structure.
2) Financial Problems.
3) Accounting Problems.
4) Problems with Operation Planning a uati 6
5) Marketing Problems.
6) Problems with the Labor Law.
7) Problems with the central institutions responsible for monitoring state enterprises.
1. State Enterprises' Internal Management Structure
State Enterprises may be divided into 2 large groups, namely, those considered as a juristic person and those that are not.
Those in the first case include:
1) State enterprises established by a royal or revolutionary council's order;
2) State enterprises established by a royal edict; and
3) State enterprises established by civil and commercial laws.
30 Non-juristic ones, on the other hand, include state enterprises established by cabinet decisions. (see Appendix 3 for details).
The various state enterprises, therefore, were established through different legal modes which specified the reasons for the setting up of state enterprises, the power as well as duties of committees, director/governor or general manager. The various laws also contain clear provisions on the appointment of committee members. The designation of power and duties of state enterprises' personnel, meanwhile, is undertaken by a committee or the director, the governor or the general manager and incorp~ated into the rules and regulations of each state enterprise exclusively.
(1) State Enterprise Boards
State enterprise boards have the authority to plan, establish goals and monitor state enterprises so that they may develop according to the policy designed by the government. According to the Royal statute on the standard qualifications of board members and state enterprise personnel (1975), it was stipulated that there should be not more than 11 board members. State enterprises with less than 11 members, though, were permitted to maintain whatever number of appointnmets that had been made. The appointment of board members is supposed to proceed as follows:
For State enterprises established by royal statutes or by order of a revolutionary council or by royal edict, there is a statute delegating the power of appointment to the cabinet or the minister in charge of certain state enterprises.
A state enterprise that is a limited company will its' board members appointed by a meeting of the company's shareholders.
31 The board members of non-juristic state enterprises, meanwhile, will be appointed by the minister in charge of such enterprises.
There are three types of appointees to state enterprise boards:
1. Board members that are appointed because of their holding positions are mostly career civil servants, state enterprise personnel and political appointees. (Royal statutes stipulate that the minister in charge of certain state enterprise may serve as the board chairman). Most of these members will leave the board following there is a change of position, a transfer to another position, or retirement.
2. Board members appointed on a personal basis will be designated either from the public or the private sector. If he or she isa civil servant, he or she may or may not be from the parent ministry. Most of the time, these boards members are political appointees chosen by the minister in charge, As a result, the turn-over rate of state enterprise board members corresponds with changes in'the minister in charge of such state enterprises.
3. The Royal Statute or Law that established state enterprises has also set certain criteria and academic credentials required for some board members of state enterprises (such as the Institute for the Promotion of Scientific and Technological Education and the Thailand Institute of Scientific and Technological Research) who have scholastic backgrounds.
In analyzing these various types of appointments, one can see that:
32 1. Most board members of state enterprises are civil servants (around 70%, see details in Appendix 4) making the management style akin to that of the civil service instead of operating in a more business-like manner. These board members also do not devote their full attention to the management of state enterprises.
2. The board members under category 2 are usually political appointees. There are changes of board members in this category as often as there are changes of ministers in charge. There is no continuity of membership, an absence of a real effort to study state enterprises under jurisdiction and overall ignorance of state enterprises' operations. Constructive suggestions on how to improve state enterprises, therefore, are not ever offered.
3. Some comittee members lack the appropriate experience, knowledge and capability required for effective management of state enterprises.
(2) State Enterprise Executives
Those responsible for managing state enterprises and making sure that they develop according to the policy established by the state enterprise's board include the executive officers such as the governor, the director and the general manager. There are two ways of appointing people to such positions:
1. People from within the state enterprises themselves, which is often based on seniority just like in the civil service.
2. People from outside the organization. Appointments here may be done through:
33 2.1 political means
2.2 by.not appointing anybody from within because of internal conflicts between the administrators themselves.
There are two problems associated with these methods of appointing executives in state enterprises:
1." the absence of a manager who is professional and experienced; and
2. the constant change of executives due to political reasons leads to a management that lacks continuity.
(3) State Enterprise Personnel
The personnel selection process of some state enterprises sometimes does not provide enough opportunity to really acquire knowledgeable and capable people for the job. As a result, efficiency is lacking due to:
1. The existence of clientelism or the use of political influence during the selection process. State enterprise personnel of common standing all the way to the executive level may be employed in these manners.
2. Some state enterprises have binding agreements with their affiliated labor unions which require that the former give special preference to the children of state enterprise personnel in their hiring procedures.
34 (4) State Enterprise Management System
The management system of state enterprises issimilar to that of the civil service inthe following aspects:
4.1 Organization-wise, they are not run ina business-like manner and are neither concerned with the maximization of profit nor the reduction of expenditures as may be required.
4.2 State enterprise personnel lack a sense of belonging. They do not feel as though they are truly involved in the profit and loss of their employer.
4.3. As far as rewards and punishment are concerned, there are no penalties given to administrators or personnel of state enterprises who fail to deliver.
2. Financial Problems
(1) Administrative Expenditures:
At the moment, many state enterprises are facing problems having to do with administrative expenditures, especially for personnel management, which can be sumarized as follows:
a) Salary expenses for state enterprises personnel. Too many people are employed (beyond the actual need) and when compared to the salary scale of the civil service and the private sector (with the same kind of work and academic requirements) the ceiling for the salary of lower-level state enterprises personnel is higher than the average wage in the labor market (for details, see Appendices 5 and 6).
35 b) Social Security and other benefits.
Besides monthly salary, allowances given for costs of living and various bonuses, state enterprise personnel also receive social security and other forms of benefits. Although the social security provisions are not different from those given to civil servants, state enterprises personnel also have other forms of benefits that differ from the civil service, and more in number when compared with the private sector. (see Appendix 7 for details).
c) Expenses for overtime pay in many state enterprises are too high, amounting to roughly 35-40% of monthly salary costs.
(2) Loans and Debts of State Enterprises
State enterprises acquire their loans from domestic as well is external sources. With respect to the external ones, state enterprises resort miore to this type of loan than the public sector. As of September 30, 1986, for example, Thailand had an outstanding foreign debt of $10.8 billion; $6.8 billion, or 62.59%, comes from loans to state enterprises. State enterprises also have debt acquired domestically and guaranteed by the Ministry of Finance amounting to 28.5 billion bahts as of October 31, 1986.
Debt problems of state enterprises are attributable to the following reasons:
1. The need of state enterprises to expand operations and to invest in large undertakings such as the Telephone Organization of Thailand and the Electricity Generating Authority of Thailand.
36 2. Investments in operations in accordance with government policy but without receiving any compensating budget in return.
3. State enterprises often do not get government financial support in time and therefore resort to loans. The case of the Railway Authority of Thailand isa good example.
4. State enterprises often face difficulty raising their service charges. Their income, therefore, is insufficient to cope with rising production costs and results ina need to borrow more.
5. The government has a policy of allowing state enterprises to operate at a loss or with only marginal returns. Consequently, state enterprises increasingly faced financial problems. The components of the Eastern Seaboard Development Program allotted to the State Railway Authority of Thailand, the Industrial Estates Authority of Thailand, and the Port Authority of Thailand are some leading examples.
(3) Problems with Outstanding Dept
Outstanding debts exist among state enterprises themselves as well as between the state enterprises and government. As of September 30, 1986, state enterprises have outstanding debts for public goods, gasoline and natural gas, railway transportation and other commodities amounting to 9.9 billion bahts. The government, on the other hand, also has an outstanding debt of 2.7 billion bahts with some state enterprises. The large outstanding debts of state enterprises was largely responsible for liquidity problems problem and the absence of cash flows of some state enterprises, leading to a higher cost of production and service charges.
37 3. Problems with Accounting
(1) The accounting system and reports.
Some state enterprises lack a well-established accounting system and, as a result, encountered the following problems:
1) The management could not benefit from the information system and use data for its decision-making process on how to have efficient management since there are no current accounting reports to rely upon.
2) Some state enterprises do not have an estimate of the costs of production and services and, as a result, could not determine the appropriate prices for service rendered. When state enterprises wish to raise the prices of their commodities and services, therefore, they could not come up with a justification to present to the public. As a result, no price adjustment could be undertaken even though such a move is essential.
3) Many state enterprises could not close their financial accounting books on time making it difficult for management to ascertain the financial status of their operations.
(2) Internal Control
1) Some state enterprises do not have internal control or checking system.
2) Some state enterprises may have units responsible for internal checking but lack ?ithorithy in operations, thereby making it extremely difficult to check the shortcomings on the part of administrative as well as management personnel. 38 3) Managers either do not attach any importance to this issue or feel that no benefits will cope out of internal control and checking. As a result, the system Is not utilized to assist in bringing about more efficient management.
(L(-ob)',bems wi Operatcibns Plang afd iaon
4.1 Most state enterprises already have a corporate as well as an action plan. A few, however, cannot proceed according to the goals established because of the lack of an ev'auation Elan. Managers, therefore, do not know the problems and obstacles of state enterprises and cannot develop their operations according to the plan.
5Y tHarketing Problems
State enterprises do not give importance to marketing since they do not understand the principles of business management.
1. The current Labor Protection Law and the Labor Relations Law cover personnel both in the state enterprises as well as in the private sector.
The people that really benefit most, however, are the state enterprise personncl. Although they already receive many kinds of benefits and are much better off than those employees in the civil
39 service and the private sector, state enterprise persennel still utilize the Labor Law to their advantage as evident by their rising demand for even mnre ki,,ds of benefits. Despite the fact that state enterprise demands are controlled by the ministry in charge or the Ministry of -Fihci,r*ib6higmuh* I~s ahieived:' ns-' cases, management and state enterprise personnel have agreed to have the latter's assorted demands registered which eventually exerted some legal impacts. The agreement becomes a binding contract leading state enterprise personnel to various kinds of benefits and more demands.
2. Having state enterprises under the Lator Law resulted in many overlapping expenses by state enterprises which led to financial problems with pension funds and retirement funds, for instance.
3. Placing state enterprises under the Labor Law also led the union members and board members of labor unions to utilize or even abuse the Labor Law to their advantage. This is damaging to the management side because it cannot assert its full authority. Order is lax as a consequence,
In cases where state enterprise personnel are lazy or lack any responsibility, they may not be dismissed from work. If management wants to penalize state enterprise personnel, the accused will be protected by the labor unions. Whenever there is a change in labor union management, the newcomers often try to make a name for themselves
40 by asking for an increase in benefits for the union members in order to gain the latter's friendship and at the same time strengthen the former's role which would lead to competition among the various labor unions in demanding for higher wages and other kind of benefits without giving any consideration to the "financ.alasituatlon'of such state enterprises;-
Problems with the central institutions responsible for monitoring state enterprises.
State enterprises operations are related to the following state organizations:
1. The cabinet is the highest body responsible for outlining state enterprise operations.
2. The ministry in charge has the power to guide state enterprises according to the law so that they may develop along the line set out by ;overnment policy and corporate plans.
3. The Ministry of Finance is responsible for financial records, guarantees, financial assistance, sources of loans, establishment of salary scales and various forms of benefits of state enterprises and for evaluating the performance of state enterprises.
4. The Budget Bureau is responsible for appraising state enterprise proposal with respect to the allocation of funds and for estimating the amount of income that state enterprises must remit annually to the government.
41 5. The National Economic and Social Development Board has responsibility for formulating a state enterprise development plan and for appraising the annual investment budgets of state enterprises and for seeing to it that state enterprise development programs evolve in acco'rdaidewith 'the Natfonal Economid nd Social Development Plan.
6. The Auditor General is responsible for checking and certifying state enterprise budgets.
7. The Ministry of Interior and the Labor Department are involved with state entepprises in accordance with the due process of labor law.
Aside from having theicomitte monitor the various operations, the state enterprises are also under the control of the ministries and other government agencies in charge. Sometimes, there are problems with coordination and delays in decision-making due to procedural obstacles which, according to Arthur D. Little, Inc., (which conducted a study on the restructuring of the communication anitransportation sub-sectors) resulted from too much government involvement with the state enterprises. This over-involvement without having a clearly-defined set of functions is reflected in the case of the Ministry of Communications, which has acted as the planner, coordinator, owner and regulator of its state enterprises and which was very confusing. The role of the state should be limited (especially in the Ministry of Communications) to being planner, coordinator, owner and shareholder only.
State enterprise programs that will be implmented also have to gain the approval of many agencies such as the state enterprises committee, the Ministry of Communication, the NESDB and the Cabinet which can be time-consuming.
42 Note: This report is based on data taken from:
1). Facts on operations gathered by the Secretariat.
2) Reports on the study of overtime-pay auditing process of the Port Authority of Thailand, and the results of the evaluitl6n bY'the*Oftke*of th6 Aiditor' General' on' the"' general observations by the special comission for drafting the Royal Statute for the 1986 Budget.
3) Reports of the Study contracted out by the NESDB to Arthur D Little, Inc., together with Jasmine International Co. and the Technical Application Universal Co., Ltd. which have to do with the structural readjustment of the communications and transportation sub-sectors.
43 The different categories of state enterprises based on the mode of operatlons/organization
1. Those geared toward gaining income for the government Zt)
1) State Tobacco Monopoly (Min. of Finance) 2) Government Lottery Bureau
2. Public Goods/Utilities
- Public Utilities(6)
1) Electricity Generating Authority of Thailand .2). Metropolitan Water Works Authority 3) Provincial Electricity Authority 4) Metropolitan Electricity Authority 5) Provincial Water Works Authority
- Public Services (it)
1) Expressway and Rapid Transit Authority of Thailand 2) Airports Authority of Thailand 3) Ports Authority of Thailand 4) State Railway of Thailand 5) Bangkok Mass Transit Authority 6) Telephone Organization of Thailand 7) Communications Authority of Thailand 8) Mass Communications Organization of Thailand 9) Aeronautical Radio of Thailand 10) National Housing Authority 11) Industrial Estate Authority of Thailand
44 3. Priority Areas designated by government
- Financial Institutions (S)
1) Krung Thai Bank Ltd. 2) The Government Housing Bank 3) Bank for Agriculture and Agricultural Cooperatives 4) Office of'Social Welfare, Department'o'f'Welfare, Minis'try"of" Interior (efitfc. e'AUS0Qe)
- Conservation/Utilization of natural resources (3)
1) Petroleum Authority of Thailand (1 COLD A6 2) Off-shore Mining Organization M w1", 3) Forestry Industry Organization ) *AA?1IAJL47-1C
Agricul ture and Conrercial (,ij-')
/oX, FAN 16) Express Transportation Organization of Thailand (7)M4Kr, 17) "Thai Maritime Navigation Co., Ltd.* (')ra "'AetCi / 18) Thai Airways International, Ltd. (I)( C A PA WX M 19) Thai Airways Co., Ltd. 20) Transport Co., Ltd. (0guL650t $g F-" 21) Bangkok bocK, , Ltd. (,z.) po*Ri PLI4A)OoD
Promotion ('
1) The Tourism Authority of Thailand 2) The Sports Organization of Thailand 3) The Zoological Park Organization 4) Institute of Technology and Vocational Education 5) Thailand Institute of Technology and Scientific Research 6) Rubber Replanting Aid Fund.
45 Security-related QV)
1) Preserved Food Organization 2) Glass Organization 3) Textile Organization 4) Battery Organization 5) .Tanning Organization
Established/Acquired due to other reasons Q)
1) Dhipaya Insurance Co. 2) Syndicate of Thai Hotels and Tourist Enterprises, Ltd. 3) Cholburi Sugar Corp., Ltd. 4) Northeast Jute Mill Co., Ltd. 5) Sugar Factory, Inc. 6) Paper Factory, Inc.
Excluded were:
- Bank of Thailand - Bangchak Petroleum Co., Ltd. - Petroleum Exploration/Production Co., Ltd.
46 State Enterprises Balance Sheet
The performance of 67 state enterprises (excluding the Bank of Thailand, the Bangchak Petroleum Co., Ltd., the Petroleum Exp/Prod. Co., Ltd. the Prachinburi Province Com. Co., Ltd., the Lainpun Province Com. Co., Ltd. and the Surin Province Co., Ltd.) from 1984 - 1986 are as follows:
Unit: million bahts
1984 1985 1986 (65 ST. ENT.) (63 ST. ENT.) (61 ST. ENT.)
Total assets 464,819.39 516,699.15 576,623.85 Total debt 361,382.56 412,882.89 462,729.19 Total capotal 103,436.80 103,816.26 113,894.6i Total income 194,247.11 216,512.37 .231,060.51 Total expense 176,327.66 203,438.18 217,480.62 Total profit (defisit) 17,919.45 13,074.19 13,579.89 State Enterprises with Profit 49 St. Ent. 45 St. Ent. 50 St. Ent. 19,977.86 15,309.53 15,652.31 State Enterprises with defisit 16 St. Ent. 18 St. Ent. 11 St. Ent. 2,058.41 2,235.34 2,072.33 Investment Budget 45,182.03 39,867.75 49,126.32 Personnel 252,881 254,106 263.665 Income Remitted 32 St. Ent. 33 St. Ent. 29 St. Ent. 6,211.00 9,373.00 8,623.97 Investment Budget Allocated by government 387.74 419.00 749.85 Rate of profit to capital (%) 17.32 12.59 11.92 Rate of returnOhltotal assets CE 3.85 2.53 2.35 Total income: total assets (%) 41.79 41.90 40.07 Expenses: total income() 90.77 93.96 94.12 Net profit: total income (%) 9.22 6.04 5.88
Remark: 1. Data as of July 31, 1986. 2. In 1985, 2 state enterprises were privatized: The Alum Organization and Narayapand Store. 3. In 1986, 2 state enterprises were privatized: Mines Organization and The Marble Co., Ltd.
47 State Enterprises categorized according to mode of organization
1. Established by a royal statute (Juristic)
I) Electricity Generating Authority of 'MA41.A "2 4MetropGlftan E'ectricie t Authority 3) Provincial Electricity Authority 4) WMetropolitanater Works Auth'ority 5) Provincial Water Works Authority 6) State Railway of Thailand 7) Airports Authority of Thailand 8) Ports Authority of Thailand 9) Communications Authority of Thailan( 10) Petroleum Authority of Thailand .11) Tourism Authorlty of Thailand 12) Industrial Estate Authority of Thailand 13) Sports Organization of Thailand 14) Telephone Organization of Thailand 15) Government Pharmaceutical Organization 16) Fish Marketing Organization 17) Govenrment Lottery Bureau 18) Rubber Replanting Aid Fund 19) Thai Institute of Technological and Scientific Research 20) Bank for Agriculture and Agricultural Cooperatives 21) Government Savings Bank, 22) Government Housing Bank 23) Bank of Thailand
48 2. Established by revolutionary council's order (Juristic)
1) Expressway and Rapid Transit Authority of Thailard 2) National Housing Authority 3) Institute of Technology and Vocational Institution
3. Established by a Royal Edict (Juristic)
1) Bangkok Mass Transit Authority 2) Forest Industry Organization 3) Off-shore Mining Organization 4) Preserved Food Organization 5) Glass Organization 6) Textile Organization 7) Battery Organization 8) Tanning Organization 9) The Dairy Farming Promotion organization of Thailand 10) Rubber Estate Organization I 11) Government Cold Storage Organization 12) Public Warehouse Organization 13) Marketing Organization for Farmers 14) Marketing Organization 15) Mass Communication Organization of Thailand 16) Express Transportation Organization of Thailand. .17) Zoological Park Organization
4. Established by the civil and commercial laws (Juristic)
...,.).. Krung. Thai .Bank .2)... Transport Co. ..Ltd. 3) Aeronautical Radio Authority of Thailand ..4) Cholburi .Sugar Co., Ltd. 5)' "Fortheast"JuteMill' Co "Ltd."
49 6) Bangkok Co., Ltd. 7) Thai Plywood Co., Ltd. 8) Prachinburi Province Commercial Co., Ltd. 9) Lumpun Province Com.ercial Co., Ltd. 10) Surin Province Commercial Co., tri 11) Thai Airways Co., Ltd. tE &.a *I.- n6.njnj L
13) Syndicate of Thai Hotels and Tourist Enterprise, Ltd. 14) Thai Maritime Navigation Co., Ltd.' 15) Bangkok Petroleum Co., Ltd. 16) Petroleum Exp/Prod. Co., Ltd. 17) Dnipaya Insurance Co., Ltd.
5. Established by the caoinet (not-Juristic)
1) Liguor Distillery Organization 2) State Tobacco Monopoly 3) Playing Cards Factory .4). Sugar. Factory 5) Paper Factory 6) Police Printing House 7) Offlce'of Social Welfare, Department of Public Welfare
50 State Enterprises' Counittee Members According to Profession (64 Places)
CAREER CIVIL 'SERVANTS THOSE ARE PENSION POLITICAL STATE ENTERPRISf.S PRIVATE !MILITARY POLICE CIVILIAN TOTAL MILITARY: PRIVY POLICE CIVILIAN: TOTAL APPOINTEE PERSONNEL 'W,PENSION! TOTAL SECTOR COUN- TOTAL gCILLOR Per 77 29 346 452 24 1 10 35 i5 102 6 108 54 2 K66 son 11.56 .4.35 51.95 67.86 3.60 0.15 1.50 5.2 2.25 15.32 0.90 16.22 8.i11 0.30 100
Chairperson of State Enterprises Comttee by Profession (64 Places)
* . :POLITICAL ! STATE PRIVATE :MILITARY ' CIVIL : PRIVY 'APPOINTEES:ENTERPRISE: SECTOR TOTAL :SERVANTS 'COUNCILLOR: !PERSONNEL :
Persons 19 2a 2 9 3 3 64 % 29.69 43.75 3.12 14.06 4.69 4.69 100
bl Table 1: Starting SnIaries for State Enterprise Personnel in Comparison to the Civil Service and the Private Sector Iarge enterprises " 'SOve Se. vs.sa ACADEMIC CVLEVNSSTATE ENTERPRISES- -PREAF. CREDENTIALS : C05 OF () SLS SALARY LIVING . SECTOR ! TOTAL SALARY! LIVING TOTAL G() SUPPORT: !")SUPPORT....) SALARY _ _ _ Grade 4 - Grade 10 1,255 424 Certificate 1,679 1,600 590 2,190 2,400 511 30.43 in Vocational Education 1,950 200 2,150 ' 210 9.58 Certificate inHigh Vocational 2,170 400 2,570 3,200 420 19.53 630 24.51 2,205 200 2,405 2,780 400 3,180 3,500 771 32.22 320 10.06 Associate Degree B.A. 2,765 200 2,965 3,270 400 3,670 4,500 705 23.78 830 22.61 M.A. 3,745 200 3,945 4,140 300 4,440 5,000 49. 12.55 560 12.61
52 ble 2: Lowest highest salary scale fur the various levels of state enterprises' personnel (Public Goods/Utilities) in'comparison to tha civil service aid the private sector (Large Enterprise)
CIVIL SERVICE STATE ENtERPRISE PRIVATE SECTOR : SALARY SA LEVEL COST OF LIVING LEVEL (2)MORE THAN (1) (3) 4ORE THAN (2) ' COST OF LIVING LEVEL COST OF LIVING % SUPPORT % SUPPORT ; SUPPORT) I.Janitors IbUU - b,alU i.janitors c,4uu - b,UUU u.00 - 131.3) Dip. in Voc. Ed. 1,255 - 3,535 2. fnip. in Voc. Ed. 2,170 - 7,080 2. Dip. in Voc. Ed. 3,200 - 7,000 Dip. in High Voc.. Ed. 2,250 - 4,685 3. Dipl. 72.90 - 100.28 50.69 - (1.14) 2,780 - 8,730 3. Dipl. 3,500 - 8,000 26.07 - 86.34 B.A. 2,765 - 5,735 4. B.A. 3,270 -10,610 25.90 - (9.13) M.A. 4. B.A. 4,500 -10,000 .18.26 - 85.00 37.61 - (6.10) 3,745 - 7,285 5. M.A. 4,140 - 12,920 5. Chief M.A. ; 000 -12,000 10.54 - 77.35 20.77 - (7.67) 4,945 - 9,385 6. Ph.D. and Chief 5,640 - 15,740 6. Ph.D. -,000 -18,000 14.05 - 67.71 59.57 - 14.35 Chief 6,935 of sector -12,535 7. Assistant Chief 7,610 -17,920 7. Chief 13,000-25,000 Chief of Sector 8,475 -13,095 8. 9.73 - 42.96 70.83 - 39.50 Chief of div. 9,940 -21,640 8. Chief of Sector 16,000-32,000 .17.29 Chief of Div. 9,385 -14,295 9. Assistant to 12,920-25,960 - 65.25 60.96 - 47.87 9. Chief of Div. 18,000-36,000 39.32 - 38.67 C--puty Director-Gen. 10,365-15,575 Director of Sec. 10.Oirector 14,740-29,260 1O.Chief of Sec. 20,000-40,000 .Director-General 11,415-16,975 11.Assist. 57.05 -104.69 35.68 - 36.70 Governor 15,740-31,060 11.Director 35,000-70,000 51.86 - 99.42 Under-Secretary 12,535-17,745 12.Deputy 122.36-125.37 Governor 17,920-34,960 56.99 -105.95 ,n,'.oc oyv& 13.Governor 24,440-41,560 -94.97 -134.20 te: Civil servants' cost of living support State enterprises' cost of living support Salary Cost of Living Support Salar Cost of Living Support 1,255 424 1,600 590 1,325 354 1,720 470 1,395 284 1,850-3,540 400 1,470-1,735 270 3,830-6,570 300
53 S• CIVIL SERVICE i STATE ENTERPRISES PRIVATE SECTOR
1. Retirement benefit/ 1. Retirement (Some pension state out have 1. Retirement and/c both the retirement/or pension Provident Fund such as the State Railway of Thailand; Port Authority of Thailaiid; and the Governrent Savings Bank 2. Hospital Support 2. Hospital support 2. Hospital support 3. Child support 3. Child support 4. Child education support 4. Child education support 5. Rrnt support 5. Rent support 6. Religions rite support 7. Maternity support 3. maternity suppor 8. Emergency loan 9. Loan for real estate purchase or house repair lO.Support in case of arsonry 4. Support in cases related loses arsonry related loses 11 .Mortgaging motorcycles 12.Funeral support 5. Funeral support 13.Speclal fund (for electric/water bills) 14.Support for uniforms 6. Support for unif, l5.Scholarship for children 7. Scholarships for ch ilIdren 16.Compensatlon after leaving jobs 8. Compensation aft, leaving jobs 17.Bonus 9. Bonus 18.Buses to pick up one to/from work 19.Bonus for efforts 20.Support for weddings 10. Wedding support:
54 Section: F
Newspaper Clippings
5 ' Kuaa(P)-Lmpr Ofi~al yers wih toallosw estimitedi at a dbeuiyconversion j hav ivene up i to aeIMaa- 500 zI1o. rlt ($199 million). Pifle. aas state-owned railroad for 1 Some of ita : hu been written In ot vernmenth ringgit (40 US cents), but still hope. offbut .wa.dy,. f . se-oK hn to turn thie debt-idan carrier oyer they will needepoke.(W onrstiidlre "a 11ae ud- comercial bank, and other int ,=P=i President Conum din said,the government ha lint e'ts. Aquino haa approved 113 state. 950 million nmggit ($S79 .mi.on) Kom has announce owned or controlled ---- t-o mind guaranteed five times that plani o.,sell 12 companies thi fior conversion to pri=1Ovat =wnr much ta\ its non-financial enter- 7Yu, whiih would leave the gov ernmentwlth 72others. = plansn to sell itstck in" +.lsewith thgretest~ttia Indonesia has 215 tate enter. Nippon elegraph.and Telephon, .were the first to.be sokL Private prime, with combine4 total asseta anwell as numerous inustrie and.-i- m bout 35% o the na- of more than $68 billion, that ao financial intutions.,' ; W-alairltYW i count for about % M o. The pr-livatstion band n: ibn-tdwmanmntehing roll 'ugh dasm.-.gon- montsago.aowmproa . ...,vidspublic_ economiaccountfAnd activt. many-7: ments try to dwrk economic Prtldlyoerat at a lose. growth or ivduc" ... ,k .'Ptdnt xuharto has ordered Them have been some problem,, conversion including reluctance by KenneMh L Whitting to private ownership to to part with ____,"._-___.__-___"_•_- weed outonly the losers, iatipula. companies that make p but. t.on that didnot generate excite. more and more governnts .n privately owned television ment among potential invotomr ~~fh~sinsss. *;ch~,annel now competes auccesafllly singapore FinanceMiise CNhasr ' wtTUZ(wit te gov*ermet netwOrk. Richard Hu said, "te govern .o~mpaniesinto privat firms,,one Te1 ommiunicationa services have n.t's presence in the economy is ofhe po ular economic -.philo- fIv. u ~ w a u rva e o ni en r d al foiled beck to pir sophies o the 190. be a ip-,ContaunrC t ii ,huo. vide greater room for private en brcd more- rdently than in tiri.l-pe system, hospitals.U r1urs.. t * p . .'! ". ,j,I ... itamne, roads- and. t e n PrimeM MahathirMco-.. . a m ews gencre among mittahhsa d.thes fln.or mas administration hopes to un- other pros~pects figlvote.' 'Prilsorof41ta ine loa many of the.900.oport.e TID_ inthem -ooPanl including the national
ai~ii b~mom~y,"Mal~hE pr.omsotei i Asdia,6Pistanrefrm. Th es ar bteinsugge the . , 'w - pa e to.. ccleat th, rate Of he Jaanese National Railway agnies whe.d' ets whn. o9th em y. tivae.ha bn split into seven
paimmm.....f ntoriosmto thae wiew. "bie _mad .ha tIndia.. Few u1MR.la&(f-dsr " a whenti anPa rlo: toaclerateprducthe Phl-obityv . ueeather.-Jpnc.ila ( tobusifThnesses.onlRal lo of dteck0 railroadrush I rfsw' .+ evn- e gro*apping,ut a nd investtexticnwhich aa ile"mbreen illsit spolitintoahvowsan.to b geteenout
-a. o -,, a...... nounced pondoi only 100to 10.
.ad. ofpm.m.mmm,:p.!bosmn. . ..*i . Tf tlmsa+.,tu ~. havin, ano.her close ioth. +a.ti,',,.Jjua,,e "p imusinesses._- bet. +s~ hat th~e-ri..oe ai.lu,, -Prideadninvhes to -0-, aked) Jus000 zin I o- evodii-olNm UUUUar ,000.,. o.. equit Me* '~A~in *hivatistlw itt l e been.an
.Wroafreamnt..56 .,1 STATE ENTERPRISES
57 shoritfall expected M M dection W rpom.e tax, 21t50py thiyrwllfall %WM0' ,,,bahit in rin atorears million bahtmilbeow t hl - Pa Depa ima__saklye~amiay. iBunyam-.. un millionbat id.t thehin.h Revenue fl erday9 4 _ment had cl-Waledths •Howeer, he deniem- otherforms of tax debt accounts. into tour pot the Government Mr Pandit said pe- . goupL wldlower the reve--nte colc M. fis is -bed de target by 6,00onfl 3,00me lio amounting, to 4,000 mil baht because the Revs- baht below target, while lion baht. Payers in this nue Department's co b t --cetio u bad py d tonswere much owe w down 200 millon srmd. rte Th ecn rouni *l"anot true," he se beht.tax However,nwlcob 1uI "recalling debts". e shortll will not be m- ,on,a t include cam pending more than 2,000 million court rulinsmand amount baht below the Aaet of -. .. '. . 781 m op. .. e said the reduced beit. the.eid or e."lection 'c pronal i revenue. . Collection come tax wa. due to the The third one includes amounted to 46,400 mil- k sytm's'lowor those who had. sought lion bat while the tar- Interet rat ands somo relaxation from the do , 0 million commercal banks help- p- m t mount t. Collectionurng ing clients evade interet about 900 million baht. the same period last year. taxntment and thelast group in was 42,100 million baht. MM that the cludes tho accounts The collection con- Revenue Department had" which the department is prs@ 1800 million asked the Bankir Thai- confident it will be able to baht mn E aEmgn_ land to monitor thee collect and amount, to hanksr arsctie.8 million bht
58 tate firms' budlget Uferings t ise 6 %
STATE enterprise& ;:, Y4Iuvzwument coffer for the 1989 fiscal year budget, starting this October, is expected to increase by 6% due to anticipated improvements -in their operations, an informed Cabinet source told the Bangkok Postyesterday. IT source said the to contribute '80% of mumications Authority The anticipated 'in was, con- their net profits and. of Thailand, were ex- crease was attributed to in the l . senm-monly ones pected to show some lottery .. ~s re--"t onheL -0% 1 ticket price ad tio public opnrting Profits in fie- justments and the in ~~~en providing utili- cacrease inthe number of ~ L) ties .m con7Mteiii' The Gvrmn raei h ubro ' •WII28.4u fl Tu e o ,paQUi ro- expected T Ri etn port on to.to passPaaet the re- theThe Government report also saidhas ____.__, .._ rbpo'The sourceatiuigt quoted,aoinln. hthe their expenditures and soon. the e nA guaranteed many state Setatibutingaticipted for flocal 1987 companies for their h vherion- which ends this Septem. local. borrowing: the tribtion to various HELP ber, the report said l-o tio,, State. r hnth g cto of-o restthtiuarye u ctanicpaeoiu ri M d (5 ,50 mi!. t! ten et 2t242bmibll ysofhiad(,7 r OP e-onorr d ppis s Theh reporto t'rth also stated. pectdbahlt is t6 lF.Ofne -Widewasby ex.al , lionwysof haht);Th State_-il.(3,676 fi r af n s r'the Prove aentl i sate. state enterprises, O justmentas oof million baht), Bangkok enterprisoe operatin which about 8,579 mil. Ma&o Transit Authority incuded woula help lessen e lion baht was expected 37 -ilon-baht), _ Othrec fators'iteranestr tin rates, Governments burde to be handed over to the Electrici pea Government for fiscal Auorty of Thailanderating ans tiiyrates,reduced oil ing low-ridden ones, the 198bdeuWrm (100mlinbh) paslowgr water and elec-' particularly in subsid- 198 budget. from i(1,700 million h) pie4 million aht for National Housing Au- investment situation, It also noted that • passed aording ereport.. public-utility state Accoding-to the re State enterpriseses which have port, the. 1IttlrY B1 regarded as among the been suffering losses, reau is eto re. It added that TEX Finance- Ministry mjor sources of income including the state has approved Telephone man the largt4con- enterprises' ttsto several for thegovement cof- Organisation of Thai- tributor to the govern- tailed 0 'stt atterrisus lanto': fer. Under government 'land, -' ioe bijd Metropolitan ment coffer for fiscal worth alto-: regulations, 4t r- Waterworks Authority,. 1988 budget, with about led esr $ther -5,281.09 million. - . Provincial Waterworks 2,907 baht million baht, up t . in the last four, Authority and Coin- from 2,417 million baht.' muths fthi fiscal year . f (J in.-8.p b), an in- - " source in the It Te. il; mminltrysaid gaiisatwan of ThailAnd 600 mion baht worth omds to be isued next month and 610 mnil will be in.twoateori cc lion baht worth in August . fnw. Implmentng and Sember. those state enterprise * h Industrial Ro W, a help'g off. tate Authority Of Tha at hr lossa, and bamt another to acquiremsp. plwa~zr~taryfunds. Th Provincial Else ~rin te caegor triityAuthority, m thiisiogr beht 478.61 month worth net and 411.002 ail The State Re.ai i lion baht worth in August oIfThailand, to si749dand S&Aamber. offis bWA worth of Mheetropolitan omh moth and Waterworks Authority, 480.819 millIon, h. 24&.8 million baht worth WWth ilk Augst - Sq. in August 'and Septet&o tiusbaL-- her. Ministry to. Enterprises maintain must seek state firms approvI contributions TE Mimc, Ministry cause th ~ hmhh hrneb4 to yield to the laid dowguiden t.., mnistry had ettedt requests by certsin gov-1 it will approve borrow*i, 8,300 Million mesorc sulth arn serpri5uch if the invstment d i. 4tat enterpisepipfit asthe Electricity Gen- at least P, M is, contribuio iudget mminsi on at Authority . still table forborrow. yer,a t ite t to meetinlad week to to reduce teper in expansioon.*rmto a Cabinet The aoum said tiit a, lst ya' agto ,0 bym.lio con bate8 =_ we ax. "Inpractic ma ? itat A ministry source tod' 0111 5tla.i.Cf ceeded with 8,80 million ontei rmruto that iwas e. t, t c " I. bahtin contribution. O wites thathave dirctive.not cooms Finance Ministry' policy te, ond tershage&s"Ti c Ao reque every Goven hol e prno,-ttty conservative, waakenerrsetoco. PrrC 1 = ,heefre'the collection. __be between 8% and e b would.like t.o, should not any prob- 6 haeinvestnment capital". em,3 sarethvr: oiwbenm ~~ pWets h a llin PM byi adn that the 1988 tar. The Skrce sawd a few, retaning ;WoJis insteau get of 8,500 million sta"M ,emla W baht htrGn had . of boa should also pose no prob. them ahme becaue inmetmenttae ood . e . onl schemm with Its p-. adumttdthe m toisrDance. would, 'Talking about the con- Ihr~d theiuiIttogether ~ with requests for defer- aufferan i dromrI -revenue _ .. tribution.of.stateqowned-o n I_ nwtthetin o teit prfita coti and it is not fair to other. banks, the source said-Fl. 210 malistr cntused; govrn.ut aences." nan Minister Suthee sorted to ot hesim not be. re it can be usedexpansion-.said even Slngsaneh had laid down f .I . In b s ft i Pprivate sector, such as a pollcy,, that they also B mmawt mmes. ha M ,have to PayPart Of had to contribute part of the minis he . t tts pd as dvi-' their not profits to the w =ow-hav.tt .=.U 9W.. Profit des and did not retain mini rm ContrtI~a'ibu i in~,allDand- the profits for internal. At .....otactiontonullith eixlea b ennef sch em e., th e rite-sm, the s The Govern itry is wolkfig oltthet orm " "Ifthyan to ez. * ;a'.u_ mdrrs%" " Bamki and th evr. mkeid alm ee- u m@*t Savings Bank wig. UID . -. rmik,,., ' souce m ,,,h have tocontribut.
60 Troubled state Prapatplans enterpriseser apn pay too much' avisory team ..... ~D ~ Finlance Mon'b llpri he Cus/tonm MOST state enterprises t Phosuthon i er nt, theCu that ire losing money. -a esthe sDablish rtmen t tI have too many employees ma ndg= theesboard ury oe tad and pay them too much, himser ' SonthiDeputy BoonyachaiPrime Minister said jowrnmen &,ncneseraive s andldteGven the Goven- said undr his--onto.D-'F-S-d the menthrI-PjFW--dHousin Bank ,te 7Y 4= sont"$ who is advisory c would board would also monitor chairman of the Commit- comprise leading busi- complaints from officals too to Improve Stateas02se'o =fih Enterpri-e, said an iwa. had been treated unjUEtly solution is to lay 'off ex- He d the board by .thes - departments? ces employees or im- would provide advice to officials. prove management. .help him efficiently "Ialso want this board Asked why the corn- to r the Cus mittee hadn't accom- toms Department,' he setplished up, Admmore Sonthisince being said noted. thatit hasoften had diffi- Hegrding the scandal culty collecal-mir~a- in the Customs Depart, tin. sON .. ' Y off 0 ment whreby aroup o H-e'also said the com- COU employoos' 14 officers have been a mittee had to take into tcused ofbein involved in Teaccount-the . en .. wellarem ploy of - thef u countrd ea i le-had . been.. Toyatathe illegal sedan, import MlrPrap of ida The committee, Admi- said: 'rhe evidenco com. s ons. ral Sonthi sai, had piled by the Customs De. d rwHe upplegeedhweerompany.to a ma t,.,oe w ,ould erdtecm yt partment iWso far imuff. that the c ommteerul map out a new plan usig dient to make chargei d Urplan for this as a guideine and to agans, the official, the imv~eint of resubmit it fo C, - what we have iconedr on-mb- s-o-n. tion. an accusation by the Cuw e" them -tomi Depattment.". to submit ir improve-. ment plans as soon as .poesible so that we will be' able to conclude the mas ter pla,"he said. Th committee, which ,metmet yestHo__us,urday -at Gover
Mai Lmlpu .. . He-siw-d- unly one of the four proposals in. the pan-to invite in.. VOWEStmin the amnin.. from within and o~tlSI
61 Jutemill's Govt plan listing of holdings s r tobe ute nun shares codc ' THE government lana. to rivatize The official expressed confidence that Nnrh E t ute Mill jb ting 90 the public wobid be interested in THE Pins inistry per cent of the Lmpany~eshare on the purchasing the company's shares. It has will prvatie ita- second trading board at the Securities a registered capital of 100 million baht. holding. in the North Exchange of Thailand, a senior official The par value ofthe company's sharjs Eat Jute se co EastssSupachai Jute Paiitvadch, Mal deputy cm. under1000 public baht offering each but to mighta par valuebe splt pf thzmimix the 5 ld tred- ptroller general, said over the weekend 100 baht. The ministry is studying an ing board in the Ak =that a working group considered-at a appropriate new par value 'but expects an..., , informed recent meeting to privatize 90 per cent of tatit.would fetch higher bid prices in a muedti Timmur- 'ithe im I-thcmay Finance Minictra'"• equity"'" share in publicMeanwhile, offering. an informed source said nance Ministae ya-lat last yearapproved. that the National Committee on Stat. played a Prosinoil ap- sell Norm~~p~~uEnters-e-MT ta Ti1 prilfrr to UmmU the Easfltut 4WU-,c -hadnot made -_June to toV~hM and share- any profit since 1984. But the firm ------prie of the jute mill,so psted. a pr'fitof 30-40 mfllion baht last ao set that itcanset the pricein ear.K_._W-_... . "rivatisingit'°.olding. ge'Im The company was et up initiallyasan privatensctor.. Th e isex- instrument for cotLlingt.hvprie as Another source disclosed that the e tin well'as' uali 65f~ute b a ' -Defence Ministry'.has recently entered the next two weeks, then monopo in Us . was argued into an agreement for the United Thai the Finance Ministry will ;e uaon ha, chaged mince Shipping Corp to transport foreign appoint a number :of- there was competition in this sector. military equipment for the' next two finandl' companies to Supacha said he would' consult years under the existing freight rate. act as its underwiter, underwriters about. the privatization of UNITHAI and TMN earlier competed th m. id, North East Jute Mill Co's sharesunder for the rights to handle transportation of The Fiace Ministy theS&7T second trading board due to foreign military equipment for the • reportedly may split the start operation in the next few months. Defence Mixifsty. compeny's ihere from the n6 t par value of 1,00 rbh each to 100 baht, as the preesnt.par value in considered too high to attract private investors.The murc .. expect . the sharm of the jute mill to be attractive sines the' -o pany' not:pft last mr could reac. 40 mil ionmht. .
Rehiring of some ' Erawan staff urged THE Finance sinistry; hotel labour union had "was urged yesterday to petitioned the panel after negotiate with Amarin the new management de Development Cotoaccept cided to lay off its 460 at least one third of the staff. Erawan Hotel staff when Under the takeover it takes over the business scheme, Erawan current next month. " employees would be fully. House Labour Affairs compens-ted by the new Committee spokeuman management according Chinraakanasosaid to the law, but the union the re-employment rate has: requested -that all wouldequal the share the hotel staff be re-employed state-owned Syndicate of with the same terms and Thai Hotels and Tourist conditions. Enterprise would. hold They also requested wh.e.n .,enorq.the Von-., the workers be paid inw •turp-wthAmarin.... ,- half while the manage-.1.
* MiChamnn paid.t,: -jw the hotel.
62 Swis.line.0 Swis line9offer No decision may save TMNC&I.... yet.a on plan ,aie ha THE o t one for TMNCeuiemnr Thaiready instructed all gov- Comm ictions P Pconsidered for the Thai Govern- on aeminent aencies to u. Ministry nds at least very prm . ment to assure that all has a good chance a week to finalieana expresse reviving its position itafthe Swiss-based ship ttha hehn inboundounsoarto'o a Communcations ernment agencies have conpany's pros to jo enure proposal crosm bGstrans try decides to allow .a complied with the orders" enter a joint venture wcceed turn-nprtedbyTMN joint venture between it he explained. with Thai Maritime -inr around the loss-rid- -" and a Zurich-based ship- Lt Col Sanan said that. Navigation Co, Deputy 1den state-owned ship. The Swiss; shipping ping company. if the Government could Communications Minis- ping company whose firm's condition is only a ',Deputy Communica- meet the conditions set by ter Lt-Col Sanan Ka- debt now stands at over demand for the rights tions Minister Sanam the Swiss shippi chomrasart said yes- 200 million baht. TMNC is only enjoying Khachornprasart aid company, then it wogUl terday. The proposal's evalua- 'on paper because in yesterday t inistry be ready .to remedyv He added that he had tion coincidcs with the practice, no government would meet with the TMNC's financial losses earlier hoped that the Finance Minstyts agency has ever used Swiss company's repro- wich now stand at about a recommendation to the TMNC's services. seinatiesmbefrenmakign200rylloondahtac. a final decision m n 0As far a the ministry decision during its ne- National Committee on According to. the Lt ColtCo a na sdstdtthee is cnconcerned, n TMNC'st y gotiatidn' yesterday State Enterprises either proposal,prpsl"heS the Swiss isfr firm ministry had been in financial loss of about 200. with the Swim firm. to put an end to TMNC hopes to hold 49% share structed b Minis- million baht is not be. He said more time or for the Government in TMNC and will help eal ula non& to yoml repair comparedwas needed because the to *e its full support. , solve ' TMNC's 200- evaluate pothe 'Swim with other agencies, ministry 'intended to j * The recommendation: rlillgn-baht debt owed and we believe the Swiss, clarify as many details for the Government to to financial institutes jointVenture withshiTMNC pping company's plan. of the joint-venture give TMNC full support, and the Petroleum Au throughM~srtoDeputy i. to reviveekvi TMNC. will admittedop las possible, that butthe coincided whwith the. Swis ..thority of'Ihmilan.
Minister JH said the company . Choonhavan earlier this ha expert in the' a idindustryt and strongTMNC int enture .... flnandl support to help and found it showed good to expand it., ' s to f,' pobiltiesof turning 'With the company's M 'spositionaround. support, the Finance, i / . PJ - ,A ' "Asthings Stand, there Mmnhty~ will no longer be is also the possibility that required tq provide fuf THE Swiss-based Inter- proposal was taking too if IMM was not going to if the negotiations work government guarantees *IaionalMaritime Man- much advantage- of make a major invest out well the minisry to help zbquire, new ves- agement (MM) 'TMNC and was very ment or share responsi will be ble to m a sels for'TMNC under its ps to revive' the .similar to that of bilities with TMNC, decision today," he said. develo1ment pr. financially-ailing Thai Deutsche Afrikan Lines there would be no need Lt Col Sanan said the gramme,"he said, . Maritime Navigation (DAL) which the minis- for TMNC to enter a Swiss company hoped to . He said TMNC was CO (TMNC) may prove try had rejected. "joint venture" with acquire a 49% shar of 'being developed as part of. twbe undesirable as the --lere are quite a IMM as there arc many TMNC under the condi- the Premier's urgent Comunications Minis- number of similarities Thai hipping compa tion it would to twouldtake take charge- piconsiderspolicy to- develop' th (-nuiainUarge7 it toii-nme be in the twofsmlrte proposals, nieshisi~nscma interested in join of TMNC's administr- country's merchant ma- lower ,than. expecta-. some of, DAL's offers ing hands with TMNC. tion under the supervi- rine fleet to international. . w sion of the TMNC board standard. were to a rertain nt ofdirectors. According to a high- considered superior," he wMNC is state The company alo said I ranking source in the said. owned. If the Govern that before it invested in.. .ministry,the proposal ment really wants to fleet development and does not put MM as a promote the Thai ship expansion, the Govern- Joint partner as earlier PROPOSAL ping industry, it should mentshould assure that it expected but as a "hire allow Thai shipping would give TMNC its full management team" firms to set up a new. support. This includes which does not have to According to the 1MM company to go into a oung TMNC for all gov- shoulder TMNC's exist- proposal, the firm will joint venture- with ement cargoes such as ing debts and future not invest-to help em TMNC instead of a for o and products sold on a government-to- operational liabilities. TMNC's existing debts aignHecono= company,"tedta he said.Thai s n nThesource said the or acquiring new vessels government basis. r ministry had been talk- but will only help find private shipping compa ing with IMM since last financial support from fies have the elpertise week and although financial institutions but lack the chane and Deputy Communica. for TMNC. have never received, tions Min-ater Lt-Col MM will charge government support. Sanan Kachornprasart TMNC a management He added TMNC's belief tbt the fee and other fees that rights to carry all the proposal was may occur.and has made Government's inbound highly feasible, other it a condition that all and outbound cargoes officials. concerned were the Thai Government's could also be subcon. less optimistic. inbound and outbound trpcted to the Thai ship. 63 He said one of the must use ping firms participating officials concernbd TMCWa services. in the joint venture with noted that the [MM The source noted that TMNC. 1i,IA
. A
Prem hears MEA'. chief's complaints "' Metropolitan Elecnivl ritho ver Anant Atirat tecomplained yta oerne-tto Prime Minister eme ico e Tinsulmnondanteprse owe,ye _. mO-uh r ore Ittn 2 00 million Baht inunp ai He also complained to Gen Prem, who was visitingte MWA ~saysitpy MEA head 011106 (abov) at war Uab;-about difliulte In q V CoUnbtborrowing nney e0 for oxpansion profects to meet the bigrowingl Mr Anant said that the MEA, which was set up In 1N now has over 10,000 employee and supplies electricity J ti Industries.to more tW nemillion households, businessesW 'its bo i IS Athri ow ls c om.torow i" Mnumbeof .Waterwr Au- tw"n 28 and 44.2 ~ AuiortyIt nunbert epecs ./ cstomrs million baht for our. ogrw tOrity has been payng one'YOwed to current bytper cent ecya hesi. the Metropolitan electricity consumption and From .1992-96, he said, the MEA plans to Invest about ElCtI -uthority another 16.2 million as intiament 9,000 illion baht to mo the.row in regular inslments and will be able tho old debts," on dmand for tolear all its debts by he said. the end of 1990, U to now, the MWA had paid' 316 MWA Public Relations director Vivat The EA Oves 35 pemn ot its. prfi million baht for the old electricity bills, m ntan keeps cent to te Phongb ra said yesterday . orexpansion oem, . He said A is now heusaid. pyng its Mr Vivat said the agency last year hwMonth, electricity bills on thn6 each comparepaid 180 withmillion 155'maillion baht for the electricity, previous told'Reacting Prime toMiniste a report that the MEA Year..The Prem Tinsula 195 millionamount is expected to rise to mod& recently -that the this year. 7 waterworks The MEA had sent a letter express. owed MEA 5 Omillion baht, Mr Vivat ing satisfaction millonLafnCYsaid his"' innfctoe .fact with the waterworks. owed only 419 peymenla:on March 30 this year, he S . .Between 1982 and 1984 the monthly His agsenWs improved financil bl was 77 million baht he said. standing shold ensure the MEA Since then, thank to its improved tiqued con- financial standing, toreCe its p nts, he said. the water authority The MEA houle pmore concerned ment.owedhas been repaying its debt in insta. ove ,etsover bydebtstt=~8559-debts tol 55 monmillion balrtbaht "We are now payig nt agencies, he the MEA be. said.
64 roup makes bid to ke over distilleries
TH. Provcial '.Mekhong least 4,835 million baht a ear or In the contract amendment .ar off Agent Association has package deal regardless of ',ofeed the Government an liquor ranged by the ministry, it was additional 10,000 million baht in aoutput year totallingin return 5,000 or million baht suggested that the benefit in exchange permission to state-owned distillery-leasingduration ofcon all for perim., take over the operatibn of all state- tracts lin to take over the operation owned distilleries with Sura Maharas and its of all state-owned or to act as affiliates be renewed to expire distll'eries or agents of all brands of liquor In to act as agents of pro- 1999, coinciding with that of the all types of duced by these distilleries. Sure liquor produced by these distil. "In lip Group,, and that thr this proposal, the Govern. payment of taxes leries, an industry source said ment stands to and royaltien t.o at earn about 575 'the Government should be a pack the weekend. ' million baht more In a renewed effort to a year or about age deal. amend all 10,000 million baht more in total It state-owned distillery-leasing con- on the expiry also suggested that liquors tracts date of the contract in with similar colour and flavour arranged by the Industry 1999," the source said. I should be taxed at the same rate I Ministry, the association, whosedrans luor should be members'aets^areu .former ... provincial J .. mentI alsa benefitofered50to aymorthnh. the Govern. andallowed to ae11 nationwide. 'agents of Melhong and Kwang current earnings a n_all i de :Thong from opra Thenth ministry added that the whiskies, last Monday sub. tion teEiego the oper,- Ex mitted a new proposal to Prime Lon of the Excise cise Department's Nonthburi dis MnlaeGep Departments tillery should be closed down and ATitthaya and Kamphoeng Phet the, hna, slate exchange ovemy ent's earnin from signed president Suthisakdl for pemi.- this distillery be manta fredby Kositwattanapanich tranafering the responsibility that its mem- In the case of the Excise to bers (some are Depart- ' - .ikhanDi silery. also i'ormer liquor ment's Nonthaburi distillery, ' producers) have grouped them- Aitthe suggestions were rejected offered to pay theiGovernment a by the Cabinet, selves together to be able to pro. lump sum aftre which the dice of about 104.mllion baht Industry and Finance ministries and distribute all kinds of a year in exchange for liquor efficiently and smoothly,, permission were ordered tojointly look into the tonperate this distillery. matter again before causing no trouble to consumers The association resubmitting was quoted as their findings for further consider 'andpaying taxes and royalties to saying that the Governmont in full. it was against the tLion. i. . ' Industry Ministry's effort to amend The Industry It stressed tnat the Government all state-owned distillery-leasing Ministry assured would stand to that when the leasing contract earn about 10,000 agreements with Sure Maharas Co million baht In benefit more than amendment was approved, the in view of the fact that the amend- Government would that suggested by the Industry ment would earn another Ministry. disadvantage the Gov- 5,122 million baht from the ernment because of expectedly opera. if In its proposal, the association tion of Bangyikhan Distillery. out offered lower earnings from taxes and of a total of 199,404 the Government a benefit royalties as well as other.relevant million baht for every bottle sold totalling the Government would receive it benefits. from all distilleries.
S"f- T O)- i.,T1LL fIz AE"S
65 TTM drops plan to construct 6th plant
THE state-owned1.a .. M o Thai.o- lfby w aHowever, the project situation, the source a d. Mn o was never approe by the National Economic He pointed out that the u-ily its plan to invest' and Social Development. anti-smokinj campaigns 4,000 million baht to con- B nor the Finance are quite efective in the struct a sixth cities, however, since the factory in CI':ng , a sgaaeslng ofciga, majority of these people highiy-place eource'on rette this year, the rotica _o___ a.ye smuggled into the TIM board told the ,source said consumption -. BangkokPostyesterday. was unlikely to in -theaca According to the from last year's level as paipis don't seriously af source, the suspension is previously projected, due fect TTM, whoee clients a due to the unfavourable mainly to intensified are mostly in the prov market situation caused anti-smokingcar ",ign, inces. by lower cigarette con- In the past, te D sumption resulting from I-sles inciean d L 21 DECISION an increase in anti-smok- 3 6n'.'"l ' .ngcampaigns. , The source said he ex- Regarding the report The source said TTM, pected the organisation's that the Finance Minis. which comes under the profits to remain at last try plans to adjust the authority of the Finance year's level of about 1,000 excise tax on locally pro Ministry, will instead million baht. duced cigarettes, the wk ztj'o'--tpi e e--'=-- The source went on to source id W was 'ciency. of its ex-fi-Mve say that TTM was in the uncertain over the issue. plt., all of whichl are, process of analysing the He said that if the minis located inBangkok, so as market situation to find try really decides to raise to reduce production out whether the ongoing its excise tax, TIM could costs. anti-smoking eampaigns not adjust its cigarette TrM planned for some would have any adverse- price accordingly under time to build a sixth effect on its sales, the prevailing circum. factory, requiring an in- Once the results of the stances. vestment of about 4,000 survey are known, TIM "We may have to shoul million baht, in Chiang *can adapt its marketing der the higher costs, and Mai which was to produce strategy to cope with the that may mean lower 10,000 million cigarettes profits for us," the surce a year. Currently, 7WM's added. five plants make about 30,000 million cigarettes a year.
6 erment agrees to electricity rates Annual saving for consumers .uplto B1,000m THE government yes- to consume more electricity 'with increased demand charge"" coordinatr and propose' futu: terday decided to reduce. efficiently while there will be a and a four per cent discount on lignite development plais.. electricity rates by 2.7 per more suitable categorization of overall consumption. A sur- The decision thus ended t cent which will result in consumers in line with the charge on consumption exceed- long-standing -rivalry betwec an annual saving of 1,000 country's economic develop-, ing 15 per cent or equivalent to the DMR and NEA to contr savrn ment. a monthly consumption. of the commercial development million for consumers, The fourth is to. ensure 10,000 baht per month was lignite in northern provinces. effective June 1. At the* Tairii-ess among consumers such scrapped. '.' ' same time, it also set a as the industrial sector Entertainment. places will no policy for development of. low-income hou.eholds and longer pay a 20 per cent lignite as a potential others, said Dr Phisit. . surcharge set by the Cabinet in source .of energ for He said that no group of 1975. Rural consumers will still power plants, en-ding a -consumers should have advan- . have support from. the long rivalry between two' tages over others and none of government. The wholesale rate state-owned units. them should subsidize any . charged by the Electricity This a a~n o~unce~-i y.^ . particular group.. • Generating . Authority of day folwing ameetig ye.t The decision will be presented Thailand was cut from 1.31 ayioUowing a meeting omte. 'to the Cabinet for approval baht to 1.26 baht per unit for Natonal cnherg olcy Prom-. today. About 98 per cent of MEA, and from 1.15 baht'per Mnist-e cared T rnisane users will benefit from the unit to 1.03 baht for PEA. The The met ing spent more an Iireduction. About one per, cent rates will be revised annually. three hours in deliberating the' will not pay lower rates because Dr Phisit said that' the .'.Deputy'Secretry vue_ .. they are .small business adjustments in the wholesale Deputy.-Secretar General.ofGeneral of'..,premises...nd which also serve as .rates of EGAT will enable MEA the National Econoiuc and residences. and PEA to have a similar rate 'Social DeeomnDevelopment,-oia BordBoard, DDr etropolitnHe said' clients,..,Etrc of the-. . of return on investment at, Phisit Pakkasem, said that it . , thorityM o willi haveE a total saving.'A sevendrte per centxhP as envishged. *had taken more than a year for.. thr w e under the Sixth Plan. The rate,. ,the National Energy 'Adminis-,' of 486 million' baht a, year. is also close to the interest rate *tration to complete a.study on.", fcompear ihc4l llicniciht, -yielded by government bonds. ." 'electricity rate restructuring. t .Pvii. Elcri. . He said that without the: The elctricity rate reduction ."uthorityclients. "The .timing adjustments, EGAT would have followed last "ear's cuts in the i t p of about nine per cent rate of.. price of fuel oh and natural gas enerity chareg roegp band return on investment from the which have brought down the flower prices of natural gas. cost of producing electricity by. Trebaefuhne categories On the lignite development 2,200 million baht a year. chner .. s plan, Dr Phisit said that four The government deemed it .o consumers - medium-sized idelines have been s The sultable t~o pass on thebenefits' industriesn. inutiesecaie , specialized guieliesav been se. , -h ...... Mineral Resources. to have to consumers,. ...said Dr Phisit. He•. b.,.ines.eo~usinesses suchsca as tourismui. ...litysor i preimiary.r. . .explained that the gudelines. . responsibiity or prelininary for. restructutring t business, and non-profit orga, survey and exploration, issuing f n.zations,. :-..',,..and.governmentd eusve rates'werc based on four ma or • ...I -. - .- b . :factors.. . ,. , .th - .- ".;.- prospecinglicences, and fixine - he first .i. he: .Those who will benefit from" ofroyalties. '':. restructiing -'to* reflect the ",,,the lower rates, Dr Phisit said The second is for the National 'actual ,cost -of..-eectricity aI hre-blohlds-with-rmontW 4 Energy..Administratiot.4otetudy.. .production and distribution in. !consumption of' 36-400"unit.. and map out development plansf the future.1 The second is to ...They have a reduction of t o. for the projects which have been. maintain financial stability for- stang per unit and surcharge given mining concessions. It will .the three electricity agencies was. abolished for amounts conduct research on lignite which" will have reasonable - exceeding 1,500 baht. For small promotion and set.: the rates -of return on investment businesses whose consumption standards for lignite. from- new projects. They can "'is close to-households, they will The third point is for EGAT to have..more counterpart funds no longer pay the surcharge for' be responsible for survey and from .. their . earnings for consumption exceeding 1,500 production of lignite, which is investment and reduce the baht monthly. The power rates used as a fuel to gpnerate external debt burden.-- -- ' will be •the same for-. power, to integrate the various The third point is to raise consumption up to 500 units. aspects of production. The. last 67 productivity 'by encouraging . Large and medium-sized point is for the National Energy various sectors of the industry industries will have lower rates Policy Committee to act as the however, even though Cheaper 6f'io the per unit rates have' gono down, after care power rate fully calculating the over all progressive rates, approved based on the actual con- BANGKOK POST TUESDAY JUNE 9, 1987 THE National Energy sumption of electricity, Committee's pro- the actual amount to be elecdricity price cuts paid would be higher were approved by th. than in the past, the CabinetUnder yesterday. the pricing strut-'", so mce said. ture,effective from June1: 400* alt.Households per month using enjoy 36- REDUCTION Cabi~et toa decrease of 2eatang pe" unit, The Cabinet on Tua, c The rate for @mal businesses using les than day approved the reduc 500 units a nanth remains tion In electricity rates, unchanged. Lhe rates for which is retroactive from d osmall bunesses using June 1. moremouth thrinrue a 50little unitshigher, a he " L,-,oldalr the usingreduction,36-400' btlo setothm mothou w. units pr month enjoy a ., holds. 0.02 )itht cut per 'unit;f industrie get a 4p cent small businesses using-. discount. A per t more than 500 units a, aurcharge f bills exceed. month will pay a little 10 baht per month is nessesmore; andand industrieslarge busi get (' A 20 per cent our-. a 4% discount, while -the charge on entertainment' 1% surcharge on billa cuttoday Ctblnt imslpon inder7a exceedingonh 10,000cd beenbaht cuts today. Parliament! "The source quoted the" THE present parlmen-letter filed. by the group: tary sesson which began a aigta fie prices will discount. A 15per cent surcharge if on April I is exoted.10 building owners normally falELECTRICITY by an average of 2.7 per bills exceed 10,000 baht per mdnth end on June 80 as #w charge their clients the willbe lifted. Cabinet has acknoWl- household rate: for elec.I cent from June under a edged a draftRoyal decrm tricity consumption. But, cage roed by tner * A 20 per cent surchareon enter- end the current ord- since the building, which; _-ackage approved by the tainment places imposed under a naryseionthem. is classified as a large -Natioval Energy Policy Cabinet resolution, in 1975 will be business establishment,: Committee yesterday. lifted. -Is-haf -a. diffirsshi The panel approved the cuts pro- * Consumers in rural areas will-rate, the owner has to posed by,the Eletricity-Pricing Sub- still enjoyienjoy subsidies for electricity sa'l"tt shoulder higher expendi committee, and the matter will be put prices. say tures resulting firom the to the Cabinet for final approval snewstructure. voday. Dr Psith idEGAT wil also sellpow er The letter stated that D The reduction comes as a result of cheaper electricity to the metropoli- an office building which: decreases in oil and gas prices in tan and provincial electricity author- used topayocity abouted 445,280a April and October last year which ities. baht or enabled the Electricity Generating The MEA will pay 1.26 baht per L month, would now have Authority of Thailand to save 2,200 unit instead of 1.31 baht, and the changes to pay about 465,800 million baht a year in production PEA 1.03 baht per unit instead of baht, an increase of more costs. 1.15 baht. However, the rates are than 20,000 bsht based Speaking after yesterday's meet- subject to annual review. unfair on the new electricity kng, National Economic and Social A a result of the new structure, structure. Development Board deputy the three electricity agencies are A NUMBER of large secretary-general Pisith Phakkasem expected to make annual profits of 7 business establishments According to the said a 2.7 per cent cut would benefit per cent instead of9 percent. and large industrial source, the letter pointed the people to the tune of 1,000 mil- Of the estimated 1,000 million plants have lodged a cor- out that the new struc lion baht a year. baht annual benefit for the people, plaint with the Associa- ture goes against govern- Dr Pisith said that under the new 486 million baht will go toMEA tion of Thai Industries ment policy to promote I subscribers, 411 million baht to PEA over the recent adjust- local industries as higher structure:Households subscribers and 114 million baht to mont in the electricity electricity bills would per0 month will usingenjoy 36-400an average units EGAT subscribers price structure. push up production coats. decrease of 2satang per unit.The fee 'eNCEP also considered ways of An ATI source told the The source went on to dereseg o2atan per00u ah of lignite ao cnerend aed to Bangkok Post that these say that AT, would con for using more than 1,500 baht of using lignite for energy and agreed to companies complained duct a survey among its power per month will be lifted, assign the Mineral Resources De- that the price adjustment members on the issue, 0 Prices for small businesses will partment to conduct a preliminary would cause them to pay and if the complaints be in close proximity to those of survey on resources, and the Na- about 3-7-% more for elec- turns but to be correct, it households. tional Energy Administration to taicity each month. * would then submit a peti 0 Large industry will be urged to study the suitability of lignite. They said under the tion to the Government to turn from other forms of energy to The EGAT was also assigned to new electricity structure, consider measures to electricity and their overall elec- study the use of lignite for producing large business establish- solve the problem. tricity bills will get a 4 per cent electricity. ments and industrial plants using the three wiring system and con suming between 11-33 kilowatts of electricity should pay lower elec tricity bill. PTT's PTT oil sales 4' profitsset to increase 10.8 % PRMOLEUM Author ity of Thailand sales to declinethe public in the 1987 ihalf-year ended last _eriod..fPTTMac increased=-10.8% to export THE Petroleum Author- period of the preious T o e p r ity. of Thailand..toesuffer (FTD a sig-is overyefulailto Ja a . to sr" a "i The "r attributed profitprofit forfdrop the fisalfi yer [vernmenthigher sales insector the non- to 6 fuel oil endng" ype:'e L ier market demaiil, TlHE "run "Pe- million litres of fuel oil earnings"ending :September from. naturi a V mnnrmrktdmid etrt sales promotions and a trleum Authority of is part of a one-year gas and petroleum prod- 'agreement be uct sales are expected to higher degree of public Thailand (MI) will ex- supply fall i' ,." -. acceptance. port its first shipment of tween PIT and Mitsui PIT 'Governor Tong- Chalking up the low-sulphur fuel oil to & Co which calls for the chat Hongladarmp sid highest increase wa Japan at the end of the export of about 1.4 mil the latest financial re- premium- petrol at month. lion barrels. suits indicated that the The delivery of 10 PIT said Mitsui is at national oil company's 53.7 to. 81.83 million ranging a tanker to net profit for the current litres; regular petrol take delivery of the fuel fiscal year would be "aig- 18.87% to 168.45 mir- oil at the state-owned nificahtly" lower than lion litres; high-speed Bangchak Petroleum last year. - diesel 2.34% to 510.38 Co's oil refinery where Dr Tongebat refused to million Iftres; LPG itis processed. be more specific about the 30.81% to 94.47 million The price of fuel oil figures, but PITs finan- litres and lubricant oil sold to Mitsui is based cial statement for the last 24.22* to 4.36 million on the world oil price, fiscal year showed a net litres. but PIT will pay an profit of 1,644 million Kerosene sales fell extra $1.06 a barrel to baht a 30%drop from the 26.08% to 2.75 million BCP for additional proc us au litres and fuel oil was essing costs. PeI°pected b=lower ".profit the ex- on, down 64.83% to 3.88 A. spokesman. for the pectedmarginspromit million litres because of national oil company salefle ofingenigous sm natu the sal controls and alter- said the country stands ral gas, mainly to the native fuels, said the to earn 18 million baht Electricity o r tmn PTT. -in the form of oil fund Authority of savings (the Govern and industnial users, and ment subsidises locally refined .petroleum prod-., distributed fuel oil), u . 'additional income tax Marginsowe from gas sales Tandasame to spea on royaltiesThailand's from Unogas pre announced K asame tproduction, which is in &itita bid t enourig9 creased as gas substi .-custom" L-to"main. energy at chamber t gai usage ss gas, prices be- Furthermore, the sale cane. low competitive Furthermre thel improve the "M. profitfiom oil prod-, KASA( Chatikavanij land." will help ucts also dwindled due to will be at the microphone His other positions are country's balance of the increase in crude oil again as the guest cha!rman of tate-owned payment by about 21 € .in the world mar- speaker at the American Bangchak P r million ba.it...... Chamber of Commerce in i diector of the Foreign exchnge Thai nd's luncheon state-run PetroleurtAu contributedlm of 406 to last year'smntie theeeti Hitonon Wednesda Bangkok at -chairmanth6rity ofof meThailand, reduced profit.. Hotel. tricity Generating Aui PT's turnover last fia- Mr Kasame, chairman tIhin-tTiy ti_. cal year was 38,678 mil. and managing director of D -u t Committee ion. baht, 3,887 million semi-state-owned Thai and- od r et&ro balit lower than te Ii Co and concurrently" EGAT, chairman of the previous year. •h'idilig oeveml other board of the Regents, posts in the energy sec- Prince of Songkhla tor, will speak on the sub- University. qenator and ject he is keen o,i member r-. .to Juridical "Energy Picture of Thai- Council. Cabinet Official Banharn calls for defers faces, reconsiderat asphalt pay cut Cbid ranideaton
purchase in ETOr ntly ordered Highways departmentmtso cal e Department director-general Sathira S For the new bidding, contractk d e b will be allowed to ufr one road surfacing to avoid alleged collusion, both methods of surfic The depa denIn a directive to the director-gener ment must select th t ique wh THE Cabinet yetra .3Mr B-nb-rn quoted a newspaper report offers the lowest bidL decided to defer itdacy on June 3 a saying that the road surfac. 0 For the maintenance work ust sion on a proposal by the THE chief of the Ex- winning bids=0g were too high which "cold mint" or "hot mix" techniques, Communications Minis- press Transport Or- miht have resulted from the bidders bidding should follow thy prvvc" try to iberalise the pur- ganisation's Contract acting colusion.In procedure. chase of asphalt by the Division has had his Mr Banharn has ordered the Highways ' After the winning contractor ist Department to implement the folowing ared, the department must supervi Highways Departmcnt. pa by 10 per cent f the "chip seal" surfacing tech- the surfacing or maintenance work a abinet sourceo said for three, months for nique bid waa pushed up as reported by cording to specifications laiddown in t the postponement wa signing an ETO con- the pres then the department must call contract. suggested by Deputy tract to buy sphalt fwbd Mr Banhar noted that since ,d Prime Minister and from Thipco Emul. 0 The prices quoted for the "chip budget year Is coming to a close, t Democrat Party leader sion Company. seal" and "slurry seal" techniques should department must carry out the o d Bhichai Rattakul to give ETO director Pong- be comparable per metre. Itthe "slurry promptly and inform him of the results Cabinet ministers time to pol Adireks , who study the proposal which ordered thep ay-cut, was presented to yester- aid Noppon Boonya day's Cabinet meeting. punnanonda had co Under the proposal, signed the contract at Communications Minis- th instructions of ter Banharn Silpa-archa then-administrator requested that the Cabi- Suraiak Chawee. asked to re-enforce a ruling on wong. Junenet 9, 1981Jue991t to allowAwHe ,_tra said the 19.85con- r v ke government agencies to revo purchase asphalt from y ernak- any merchant and to re- Sa- ",di move the state-owned Ex- was comamnitations press Transport OrThipco minister, mulindeasmade ha l sation from being the sole Thipco Emulsion Co delivery agent of asphalt the sole supplier of He also asked the to the Highways Depart- cold-nixedashaltti Cabinet to scrap the THE aIudtryof Com. ment as stipulated in the k wa contract with Thipc. munications has asked another ruling that year. . ent for 15 Emulsion Co. the Cabinet to revoke two Mr Banhayn also asked te Mr Pongpol said earlier Cabinet decisions the Cabinet to scrap a X the CCC is still inves appointing the Express ruling last year which t o miflBjg. tigating Mr Surasak, allows Thipco Emulsion , "hasomered the Cbm- the ETO's Toansort Orgira"sitia" Co Ltd to solely supply munications Ministry director. former the solb 'Chaser.anj CoLtsllysuplo t investigate the ." The ETO has asked 49 huppllt-to-il cold-mixed asphalt to the ,gvernment units. Highways Department.i deal. the Crime Suppres- iommi--- Uons Mr Banharn said h Connunications sion Division to take Minister Banharn proposal was not dis- Minister Banharn legal action against Silpa-archa said yester. cussed by the Cabinet Silapa-archa has M Surasak for al. day that the Cabinet yesterday because the asked the Cabinet to leged misuso of decisions created a mono. issue had not been put on ' enforce a" June agency money. poly for the ETO and pre the meeting agenda in .KI -tnL t He said the CCC *vent the other govern. advance and because it allows government has ordered the Com- ment units, such as the was raised for debate late a encies to buy a munications Ministry Highways Department in the meeting. pIrfiir mer- 'to revoke the 'ETO which needs large quan. The sources s'.,d Mr "chant an to remove contract with Thipco tities of asphalt each Bhichai requeeted whon the ETO as sole deliv- Emulsion Co, and the year, to obtain the ma. the proposal was tabled ery agent of asphalt ETO has been terial from other sources.' that ministers be given to the Highways.De. ordered by Mr Ban- The ministry, be said, seven days to read Mr partment. harn to look into the has proposed new . .gula. Banharn's proposal. matter. tions which will allow de Primo Minister Prem In complying with partments and govern Tinsulanonda then ruled the ministry's order, ment agencies to pun that the issue would re- the ETO sent a letter chase asphalt directly turn for Cabinet consid- to the Public Prosecu- from factories. eration fiext week. tion Department ask- To prevent corruption, ing whether the con- he said that several corn tract, which is good mittees would be set up to until the year 2000, screen the procurement can be terminated, process.
70 B29,O00m/ INVESTMENT PLAN FOR THE IMPROVEMENT OF TRA) TRANSPOnTATION SYSTEM IN BANGKOK METROPOLIS AND, road plan < •'NIDERTHE sXTHPLAN( 987-1991)
gains Investment buddet Implementation
approval. The whole Under the projects. sixth Plan 1W 10 THE Committee on the Development of Bangkok Total investment 61,115 29,0 1,343 6, Metropolis and its Peri meter yesterday ap- .Principal and ma roads 35,87 1696 1,157 3,6. proved in principle a • 29,000-milllon-baht in -vestment plan to improve I.I Expressways 22,460 9,062 40 L,0m the transport system. 1.1Highways 4M " 4,433 84 1,496. 1 Principal roads 2JM 1,m 205 331 The panel said the . L4 aBridg m 5,460 2,137 63 443 plan, adopted in the Sixth National *Economiq and,'.. ' S sols 4,013 2.815 186 670 Social Development Plan,', Secdry___ ,______,4,15__1___,__ should-be regarded as a. priority but .further . 1 Minor roads 3,669 2,471 119 599 studies would be needed. L.UloadollPnln so 344 344 67 71. before it would be put to ;_" the Economic' Ministers forapproval. &Mawe tramitsystem 21,000. 9.000 2,0
PRIVATE FIRM 3.1mprovementofBangkokT~msportationCoI 3,000 3,000 750 3.2 Electric train systel 15,000 3,000 1,000 3.3 Elevated railway &suburban railway 3,000 '3,000 750 Also approved in principle was a plan to give a contract to a pri. 4.Others .48 . 245 .56_ vate fi~m to build a 13- kilometre elevated road -b along klongs Saen Saeb and Mahanak. , a 6 'The Land T3nb hta._ _ _ tion Traffic Arrangement Police unit Committee was assigned' fare on Monthl to consider details of the proposal to ensure that new buses bus tickets the project conformed to minibuses standards and was coin- THE Bangkok Mass THE Bangkok Mass Tran. paitible with existUin 1oad Transit Authority will sit Authority plan. to networks. Introduce discount bus - The panel, chaired by. charge commuters three tickets valid for a month. set up a police unit to Deputy Prime Minister' baht on new buses from BMTA deputy managing make minibus crews ob Bhichai Rattakul, al November, Deputy Com- approve rinile an munications director Tavorn Chantra- serve traffic laws, Deputy Minister thai said details were still Communicationa Minis Expresaway and pidi Suraphan Chinawat said being worked out but the ter Suraphan Chin. yesterday. now tickets are eected nawatr said yesterday. Transit Authority of The increase, approved to go on sle within a Mr uranhan said the Thailand proposal, to by the Cabinet last week, month. wurapeansaidhe allow private sector in- will apply to tfie BMTA's vestment in stages 2 and loseAlthough revenue,. the BMTAearnings will this week and manned by 3ofethe expres2way. 1,000 new buses, includ- from the discount tickets volunteers from among ing 100 air-conditioned - which will mean pausen. the BMTA'a 800 inspec ones, that will be gradu- gers will pay for their tors. al-7 put into service dur- travelinadvance-willbe The volunteers would ing the next 18 months. put into a special fund to The first 80 buses will solve cash flow problems. be trained by the fmlice to serve in populated areas, The state-owned bus encycurrently lose suchtackle as traffic dangerous violations, driv including 10 on the yaou e mllon baht a ing, running buses out of Rangsit-Sanam Luang day. concession routes, exces route, in November. sive exhaust fumes and Mr Suraphan said the corruption among con-' BMTA, with a projected ductors. 3,000 -riflon -baht The unit would also budget recently approved make sure Bangkok's by the National Eco- estimated 2,000 mini. nomic and Social Devel- buses are adhering to opment Board, expects to BMTA regulations by the break even within 18' end of this month. months and trim its Undr the new system,j losses to 28 million at the said Mr Suraphan, mini. end ofnext month. bus operators would not The BMTA has ac- have to pay tea money to crued average monthly unauthorised persons but losses of 46 million baht would pay the BMTA be in recent years. tween 100 to 125 baht a day to operate concession routes. 72 TAI orders two mno eBoeing jets TRA1 "Itra ernment approval, the pines. deck inm~rporating digi tional has paced sn order two optioned aircrafta. The B747-3%0 worth about US$250 mil- have been scheduled for' B747400, which isoanM froma BReing'syt~sdv twin-jets.. lion with the Boeing delivery in 1990 and sidered the largest, most New interior designs Commercial Airplane 1991. modem and longest, offer flexible seating for Company for the pur- Despite the set dellv- rage jetliner, will be operators and more pleas- Mseof two new B747- e'y dates fur the first two used on THAI's long-haul ant surroundings for pas 400 jetliners plus an op- B747-400s, THAI has yet routes such as Bangkok- sengers. #on on two more. to select a suitable engine Europe and Bangkok- Boeing's first B747-400 i*-According to Boeing, for the aircraft as only North America. - will roll out of its assem the two B747-400s are the Pratt & Whitney The B747-400, which is bly factory in Everett, scheduled for delivery to PW4000 is currently capable of flying 8,000 Washington in early :THAI in October and available because the statute miles without ref- 1988. Following lengthy. -November 1939. The pur- new General Electric en- uelling, incorporates new flight certification trials, :chase of the aircraft will, gine designed for the 400 technology which makes the aircraft will be avail giveTHAI 10 B747s. hasyet to be certified. itthe most fuel-efficient able for delivery to Swis- THAI is expected to re- The entire THAI fleet aircraft in commercial sair in late 1988. .ceive its seventh and is equipped with General operation with about 10% At present, -the U3 ,eighth B747s, which be- Electric engines so the les fuel consumption per based aircraft manufac long to the:eighthd 300 series and carrier is not expected tototurer seat than the current fi ordershas receivedfor B747s, 797 of ,hive extended upper choose the Pratt & Whit 747-300 and about 18% 1 :decks, by December this ney engine as this would less than the older 747- which 87 are for the 400 :year. affect its cost reduction 200s. model. Under the agreement, concept which relies on The B747-400 also fea- Meanwhile, an in. which is subject to gov- the use. of similar en- tures a two-crew ight formed source said the ":THAI order was initially an earlier option for two B747-300s, "but the air line- decided to upgrade its order for the 300 moael to the 400 as the latter aircraft was more suited to the airline's fu ture marketing strategies on long haul routes".
for The PostPublishing Co., L5
T ,J, • " "'
Air Chief Marshal Prayad Dltyasarin, prgj_.e.of Thai Pictures shows (from left) PiU Sukakul, managing Nrntermatona, recently hosted a reception To introduce director of President Tours Co; Chatracha Bunya-anant, new THAI country, manager for Thailand Suthep Sueb- vice president of THAI- Yawalaksana Pangsapa, prsl sanmwongs. nt o the A iationof Thai Travel Agents; ACM • Attendlhg the event held at the Shangd-La Hotel were Prayad; Kusa Panyarachoon, president of World Travel over 200 guests from airlines and travel agents. Service Co; and Mr Sulhep.
Bangkok Post is edited by Theh Chongkhadikijfor The Post Publishing Co.; Ltd., Printer, Publisher and Owner; Office: 3rdfloor, U-Chuhl
/73 Deep-sea port at Songkhla GHB lendings. facing delay to rise sharply
tr r oWITHthe ho i indus.a& .et high reserves for Porttr Ud o.mini rrentlyto st peak, pot loi-- with the unexpected mis deviation from cpdt extension by the-To problem of an under- schedule. Governm wt Housing " -eO f h- bank's water rock bed wich The port project was ank this yr is epe loans are In foreign cur could delay its comple- initiated by Prime Minil- to reach 3,000 moIon baht, rencs, including Japa. ion by two months, Har- ter' Prem Tinsulanonda the highest target ever set nese yen and Swiss francs, hour Depairnent eni- to be used as a loading GHB, n h ciae neer Fueng Panic point for raw materials, r ip grety,causing the bank aid. rmainly rubber. tompoinshoulder highe cont" The bard rock layer It is expected that once he pointed out. means that the original the project is completed, He said there wen The bank has et a re method of pile driving more trade and industry than 10,000 new houses serve of about 200 mlion cannot be used and the will b d t restered during the first baht this year for possible por's contractor,EngiwirngRazer SongkhlaAgecya. he prt illte numbrofr this estimated year. withto for eyhag osssle nleeng .Agency prvne.Tepotwland nearby qutero400yhedf timat htes However, he said the fow Taiwan, has set an be able to receive ye aeond of the t sd e extra budget of 10 mil- ships each of up to 20,000 Itsn caed o ans ionbaht to dealt tesaid. with the ously.tons. in There size simultane-is also a Regarding interest rates amounting to 5,000 million proelemsMrth muotg clients,the bank Mr KIMcharges said theIts whichyenbytheendofthisyear, will HeasaidthttheportiJs warehouse with a ttal GHB is ntyet ablemto ue rodue Itshelp interest the bank rte to now about 40% co - space of 6,72D squareH snty tabet u o u e t neet rt noaot 0%cm*apc oI870nqur Its rates because It still has, burden pleted. According to the metres as well as a Jerty fore 8,6%to 4.M% schedule the project to protect the port from should be 45% ftnisned, waveg and sediment. but only 537 piles have been driven In place out of 1,115 due to the rock bed. The project's budget has been set at 636570,676 baht, of which 63% is financed by e loan from Asian Devel. opment Bank and the rest provided by the Government. --Constructon was scheduled to last 33 months beginning in March. Payments to the contractor are made in 33 installments and so far 23 installments worth 160 million have been paid. As a result of the ex pected delay, the con
74 ,Port Authority awards anothei New stevedore ,contract to Pas., rights fees THE Port Authority of design work of the port. expected calling for international Eo Thailand has awarded a The agreement was bids. contractmilio yeworth 542.522Pawde signed Thoee short-listed 'THE unications stevedore rights fees and million by PAT Manag"n firms havethebeen asked to yen to the Pass DirectorPhongsak Wong. Miitroastl tD Consortium Group submit their p to Poit Auto leaveleav thethe for samut and top Pass PAT by June rity, of Thai. quotas unchanged. How. supervising the construc- executives 26 so the lIan flirew recent tion at the author- PAT selection committee ever the PAT will start work of the Laem ity's headquarters earlier deision on stevedore collecting Chabang deep-sea can take about two rights 15 per cent fees port. this week. months fees and has pro- from ship owners as with Pass Consortium was PAT evaluating the Toedanew earlier is still in the proc po s and negotiating rate for private companies. awarded a con. esa ofselecting a suitable goey Port to boost This wi the bid winner, revenue, wilhelp the PAT tract worth 101.109 mil- contractor and- hasesa short-ofselectigiaitte.Cmui increase its 'revenue to lion baht for the detailed listed 13 companies lo PATaw noted that if all Deputy Communica. are- wenttas as planned,polnd, thee auau.tchornprasarttions inister Sanan 213.64 million baht said steve-Ka- getthe 11.18Government million baht.willwhile still thority would be able to dore rights fees would be Lt-Col Sanan said sign a contract for the the collected in the 520 day ministry wants the PAT Chabang deep-sea port by period after the theend ofthisyear signs PAT to retain the same steve-. Yugoslaviaa contract with dore quota, to reduce for the pur- ship owners' the• chase and installation quota to SUPPORT six cranes of 100,869 containers, and at the port. increase the quota fc.- pri Lt-Col Sanan said the vate companies to Meanwhile, in an effort PAT had not to cope with its increased collected the 490,721 containers. worod, fees for over 10 years and Botl th hi PAT will com- had lest 2,000 million o puterise its containerfreihtper- anding I~erwould and te sc owners freight handling opera- baht as a consequence, and also be subject to After the new cranes 20 perprivate companes tions with technical cent stevedore sup- are installed the port from the Economic PAT rights fees. will take over all steve- r is and Social Commission dore operations. eesh foi Asia and the Pacific I this happens thei , At present the loading PAT will (ESCAP), a PAT official and increase its said yesterday. unloading of contain. revenue to 228 million ers at the port is carried baht annually Next month, PAT will out while the call for bids for by three groups with to 131 million baht the supply fixed quotns. These am i of a super minicomputer 129,117 t11i llio and in containers per business and income system worth aroundsystm 10wrtharond bYear shi owe'sand "r the PAT, 510,694 taxes,The heministry said. hash told million baht. y The system hip owne and the PAT board to review used to handle will be 87,196 by private compa- its decision and instead container nies. operations and freight in Only PAT's warehouses the private adopt this proposal. and to companies pay 15 calculate cargo flows cent of per The PAT board will through their revenue to meet tomorrow to discuss Bangkok Port. the PAT, earning The the the matter and the new system will be in- agency 142 million stalled and put into use baht fee formula is expected to annually and the Govern. be implemented sometime early next this year, probably ment 11.18 million baht month. in Febru- in business and income aryhe said. taxes. When the agency an The nounces its new regula source said that . Late. last month after the hardware the tions concerning the fees, had PAT board chaired by private been procured, PAT Adm Thada firms will have to would get technical Ditbanchong submit bids to the PAT, as- conaidered introducing he said. sistance from ESCAP for the development of the software to handle ship ping business. ESCAP's technical. cooperation will be give free of charge provided that the software de veloped by its people will then be made available to other developing coun -tries with ports of about the same size as Bangkok Port. These include Fiji and Burma. The source said the project had already re 75 ceived approval from the National Computer Com mittee. 1,000 ,Y JUNE 17, 1987 phone TOT urged lines for to lower bank, rates in TELPHONE ;cnatpoorer wihte head office of p o e Bangkok Bank in more than previ ouslyconvenient after the Tephn ouslyantr te Tholand THE Telephone Oa- areas where there was a The other non-sub established a telephone sation of Thailand (OT high lveloeonomicA- scriber had either used a exchange at the office, wasudi yesterday to tivit. telephne in their neigh the bank's information modify to long distance second factor w borhood, had travelled a and social activities sec- telephone rates by lower- that, if telephone instal- considerable distance to tion chief, Payong Kaja- lag the cost for poorer. lation was to be consid- make a call or had used a .# area in order to expand' ered a social contribution, radio telephone. laisaidsid Xyesterday. the exchange services and encourap the rates should be UJn towns and rural had enabled custhmers economic activity. lowered so users in re- communities' a surpris wanting to contact the The East-West '3entre; mote provinces paid less ingly large percentage of bank to dial code "230" the World Bank an%'_W than those in provinces i the respondents had before the numbers of all held a joint workshop close to Bangkok. The re- never made a telephone telephone lines between seminar yesterday on duced rate3 could be ex- call in their lives," Dr 1000-1999. -he National Study of pected to help boost eco- Chu said. He said this meant the the Social and Economic nomic activities in the re- n rural tprnbons bank had 1,000 direct Impact -of Rural Tele- mot provinces where no telephone facili lines for use by custom- phones in Thailand" at The study combined ties are available, some ere. the Erawan Hotel. stratified sampling with 45% of the respondents Mr Payong said that. The above proposal fol- arcasmpling and simple had never made a call. after a two-week test, lows a study which found random sampling using Even in municipal tam customers said they were that a big percentage of 2,500 respondents from bons where telephones satisfied with the system respon4-dnts had never .12 provinces, are available, about 25% as it was more system used a telephone simply ent.' East-West Centre's an- of the respondents had because facilities were sistant director/research naver used one." He said the head office not available especia y, associate, Dr Godwin previously had 250 direct in rural areas. Chu, told the seminar He said that as Thai decided, that the study had been land moved further ahead. lines234 3333, and for a centralcontact withline, thatThe as workshop TOT planned to broken into four' major in its economic and social cust3om r cinstall at least 20,000 sample groups - home development, expansion With the establish- public telephones in the telephone subscribers, of- of telecommunication fa ment of the exchange and next five years, it should fice telephone subecrib- cilities could be expected permission tby O toan bear two factors in mind. ers, those with a tele- to bring benefits to the at home and society, but the expanaion the 230 code before the The first factor uncov- phone b i- ered by the study was in the office and non-sub. eemed to be an urgent bank's telephone num- matter since a sizeable telephone that telephone services 3criberq. . trafficbers, wouldheavy be eased, he providing significant Among the 2,500 re- number of rural inhabi never made a benefits per unit cost spondents, 1,399 were tants had added. a were in provinces sur- non-subscribers and 402 telephone call in their rounding Bangkok and of these had never used a lives. 35-0050 (8Linw)' telephone before.
76 FINANCE
INVESTMENT
AND
STOCK MARKET
77 St BANGKOK POST WEDNESDAY JUNE 10, 1987 Foreign investors: Problems remain by Joseph Waring Foreign investment In Thailand has been In- ACOMBINATION of abercreasing substantially due to a number of of more favourable government more favourable factors. However, according policies, the steady economic to three foreign chambers of commerce in development and the apprecia. tion of the yen have led to a Bangkok, there are still problems Inhibiting substantial increase in foreign Investm-ent here. investment in Thailand this year. In the first four months 130 projects received Board of Investment promotional privi- RESTRICTIONS leges compared to just 73 during the same period in 1986. According to many foreign According to a report compiled iiwes c1 a new investor 6- investors, the investment c i- by the Japanese Chamber of ing in tIl mate in lnam s the jm jn nomerce, hard and laht rules utely mind-boggling. Me Sou east Aian rein, and restrictions on such things "when new invez-or see However, mot agereea re as issuing visas and work per- i things like the Alien Business are still a number of aspects mits and strict and hasty en- Law, NEC 281 and the Civil which the Government needs to forcep irclnages Commercial Code conflicting improve to further enhance a content portio-, contrary to with the Revenue Code, they Thailand's potential to attract thir Mntlon, are apt to havo really have a problem finding overseas inveatars. .an adverse effect on the smooth their way through those regula In an attempt to identify the transfer of technology in the tions and coming to a clear in mnor problems discoura ging long run. The report said these vestment decision," he pointed foreign investment in Thailand, measures should be imple- out. the Business Post talked with mented with flexibility in fully American Chamber of Com executives from the Japinese, conforming with actual condi- merce vice president TJ. White American and British Chatse tions. said the monolithic tax struc ofCommerce. British Chamber ofCommerce ture and-cuiewoms procedus The three chambers agreed president David Tarrant said o mupaniesm ace when doing that a major investment impedi- that although there have been business here is a major disin ment is the inconsistent ooca- improvements in the overall in- centive for American investors. sionally inflii5Ian 'on vestment climate in Thailand, Mr White, regional manager guen orcemen o the red tap that foreijn inves- of Phelps Dodge International vernmentai us torm wadeth Corp, said that while American encies oat prE Aumb le -- investors are quite happy with venue and Customs depart- nginvesffimn the present investment climate ments. Mr Tarrant, managing direc- here, which is getting better, An official from the Japanese tor/chief executive of Inchcape there are still several major chamber said that considering (Thailand) Ltd, said that "the dishicentives keeping Thailand the dynamic economic develop- enforcement of the letter of the from really booming. ment in Thailand, the Govern- law without flexibility in many Doing business in Thailand ment must have a consistent matters that are inconsequen- today, he said, is very different and stable policy to ensure clear tial does, in fact, lead to red tape than during the 1960s when the and fair taxation, among other and many times leads to unfair- climate was relaxed and compa things, if the country wants to nes and arbitrariness which nies understood the "system". Sinduc tho flow of more foreign" discourages investors". Now there exists a "monolithic capital into the country. He said there is certainly wall" which investo i He said that while there have more buoyancy in the economy with-.- And with all ASEAN been improvements in the regu- which is in better shape than latory environment here, the' most people expected, and it is complexity and slow execution gwing faster than all other 01 Ma stve uroaebuiness AEA member countries su thereturn on business which are Thailand's main coin and import taxes and duties on petitors for foreign investment. raw materials for goods pro- However, he said that as a duced for export and Boi consid. result of changing times and eration of investment promo- shifts in national priorities and tions, need to be simplified and interests, Thailand is burdened " made faster. with out'of-date lairs"_Pd a A madol 9a!tis rule!
78 INTELLECTUAL
Regarding the lack of intellec tual property rights protection in Thailand, both Mr White and Mr Tarrant said the problem was definitely inhibiting prod 'These problems are not only include non-trading offices, uct introduction here. 0 applicable for foreign investors, teaching restrictions in non- Mr Tarrant added that tis but hold true for local business- Thai schools, suspension of controversial issue was a major men as well, Mr White and Mr many price controls and the turn off for foreign companies Tarrant noted. promotion of investment in ex- investing in those areas, but They said the' Government port zones. noted that the proposed amend needs a broader tax base as However, he said export con ment to the Copyright Act was a currently the weighting of the trols, some licencing problem step in the right direction. How tax paying burden is very nar- commissions and other impedi- ever, as normal, it exclued row ments, which are bound by red pharmaceuticals and agricul Mr Tarrant quoted figur tape, inhibiting the export of tural products and computer fromrived afrom World the BankRevenue survey Dpart- de- I Thaisimplified goods or and eliminated services mustin orderi be I software.nte rao ocrM •-Tarrant ment'o .own figures that show" to facilitate the further expan- Tarrant said, was long range thatles than 1%of all co rporate sion of exports. plans and funding to preserve er pay T1 f all the The official from the the Japa- and protect the environment juristic tarsesand50 of air nese chamber said that even I and the nation's delicate ecologi •urstc ersons declared lo._ , though Japanese direct inve,- cal .halance. He said if over 'or income tax purposes, while ment here is currently increas, expansion was allowed in vari- .ttd l s of the ing rapidly, it is important for I ous areas it would have an im corporate sector almost equalled the Government to establish pact on many things including, the total profit of the tax paying flexible investment incentive eventually, tourism. .copaie'ompanies. measures to further improve the And even though tourism has business environment been the leading foreign' ex •RVSOHe said the Government needs change earner for some years REVISION to relax conditions on issuig and has finally received the visas and work permits as well attention it deserves, he said as tax clearance as these a there was still more the Govern The tax and custom problems, always slow to process. Once ment could do to further encour Mr White said, can only be Thai capital is involved in a age this industry. This included solved if the Governmentbroad- project, there is a tendency for the setting up of duty free stores ens the tax base in order to visas to become more difficult to and drastically reducing taxes make the Government leis de- obtain, on imports on luxury items such Whi, pendent on a few large tax He said restrictions on the as film and t e payers. Besides a revision, he cameras. He said amount of Japanese equity in this would really build Thailand member nations offer ingsh said mechanisms such as more joint ventures at times causes tors about the same things, he I up as a direct competitor with professional Revenue Depart- projects to have insufficient Singapore and said, the Government has been ment draw the regional staff and customs officials capital because Thai partners tourism away from there. tuestiowng many of the laws are needed to improve the sys- are sometimes difficult to locate. While revenue and customs t were implemented during tm. He recommended that for the are the areas where most inves the boom period which are now The problem is that the Thai first three-five years the per- tors generally have problems, he holding back many potential system is reacting slowly, and centage of foreign capital should said the Government was ad investors. what is really nee-d--di-r6r the not be restricted in order to give - dressing these problem issues He said the present tax struc- ,overnment to convert- iti" projects a chance to get off the and there was a positive re ture with its arrow tax bae is r c into action, he stressed. ground. sponse coming. He said he and cumbersome and not always en- l He asi ftihblmatrems a Infrestructure problems, such his fellow chamber members forced consistently. Although addressed and cured, Thailand as'-blc -outs uneven lowof understood the sensitivity of not uncomPetitive at 35%. the will definitely take off. since it electricity and lack ofwater at these issues and how politically problem- e prted out layJL.. has many advantages over other tmes rad to losmes in produc- difficult they were to resolve. the it rtItion of aw countries in the region. tivity and need to be addressed "Time is always a problem, and w te professio 'm On the positive side, Mr Tar- by the agencies concerned in but we're at last beginning to and accounm- o therait said the Government has order to make doing business in see improvements in these prob Ci is p ent. I worked to stimulate domestic Thailand more attrdctive. lem areas," he said. Structural problems, he said, consumption and the promotion " Mr White said problems with He said his chamber has seen have led to very indiscriminate of exports through the develop- . visas and tax clearances as well a clear desire on the Govern tax enforcement with some ment of free trade zones, export as telecommunications and ment's part to study and seek companies paying more than the processing zones and special ex- transportation are minor has- solutions to some of the invest 35% rate, while others end up port incentives within the GATT sles that businessmen paying must face ment problems through various very littlei rulings which make it attractive when dealing in foreign coun- committees, while the dialogue In addition, auditing practices to get quality investors in Thai- tries, adding that the hassle between Government depart and court actions on tax casem : land. factor in Thailand was not high ments and chamber represents tend to be very low and compa- Furthermore, he added that compared to other countries in tives had improved enormously. nies often must pay large penal- there is much greater under- the region. Moreover, he said many issues made.ties when simple" mistaken•private are standinbusinessnd trutworldbetweenand thetEnw were receiving asatisfactoryro made vae-bsinss orldandthesponse He said another major disin- icworld of Government, and lana fofrom ththe Bankan of Thai the centive is the bureaucracy of -dded that the Government has land and Bol, which wasn't the CUstom pro es which tend to at least addressed a number of situation three years ago, and arbitrarilyassess values ot ina- • if'ific isuesissues raisehaveraised by foreign added that some improvement been made in customs, ports. chambers the of commerce. These 79 Commercial Registration De partment and immigration. attractiveThailand /1 Narong proposes more incentives" for investors for listed firms Tokyo (AP) - A total of the companies. RMt arehold 23 Jane se firms Ja eeafWs, pata change of Thailand presi- era, with only a limited soune t the semian ularzy sma dent Narong Chulajata number being actually rEtal aan medium-aize o pant6 has urged the Govern. transacted In the stock . n Trae rment to increase incEn- market. .sation last year about abroad an the yen a rim tives to attract companies Ifthe Government be Sposible investment in against the US dollar hai with good oerational lieves that the develop Thailand because of the made Japanese produch rformances to apply to ment of the capital mar country's cheap, good more expensive abroad listedon the SET. ket isa key factor for the quality labour and a and thus harder to ex. Mr Narong, currently countrye s economic devel. stable political situation, port he official wild. M aog urnl onr 4 cnmcdvl JE Osaid ysterday. H said Japaneseii president of Jalaprathan opment, the Government JETROinterested offici Mataru are iter ese in Cement Co and president should give more tax in the of the LLted and Autho- privileges to listed Inoue said 12 other Japa- fields of auto parts, iros rised Companies Club, authorised and nese corpanies in firms showed inter- structures, electronic said the present bullish order to attract efficient eat in Malaysia, nine in parts furniture, potter) trend In the stock market companies to Indoneiia, five join the in the and chopsticks. wan due tosuplies of SET, thus increasing Philippines and four in Inoue said that so far in ligted seutiesi &L stock supplies, Mr Na Singapore after JETRO fiLZal 1987, which began less Wli]-a~n-d. rong said. annotnced an overseas in April, JETRO has re- Though there are He also said some SET *investment cooperation ceived queries from 15 about 90 listed and regulations should be r plan last year. Japanese firms about authorised fis, most af vised to protect investors' The plan is aimed at possible investment in their shares are in the benefits. helping Japanese firms ASEAN nations. build plants in member nations of the Association of Southeast Asian na tions, and at helping ASEAN attract Japanese firms and technology to member countries, he mid. ' Of the 23 firms inter ed in Thailand, six made feasibility studies with the help of JETRO and two decided to build plants to make packaging equipment and moldings forplastic products, lnoue said. He did not identify
80 SET to boost. Maruey says share supply excMaeswill by next month' en TH Securties Ex- s act on ITF 1 change of Thailand itles could not prevent: (SET) has stepped up them from buying-' efforts to prevent poe- shares. i ble manipulation and "Share price. are ris-mu insider trading, while ing as there is a limited: tr inepply of shares on the: supply io i .y market and most listed THE Securities Ex I - m companies are potngs change of Thailand yes- = 5enext month- better operationial re-, terday confirmed that SET assistant vice suits which helps create, action will definitely be R ident Suthichai demand for such' taken against the al Uhivanich said presi- shares," he said. le1 hreSthc saidI the:eged manipulators of "Though it will take (re of dentd Marueya a Phadoong-lreadsockmrkh hasdben International Trust & some time," Dr Maruey 800 million baht), state- sidhi ha bardy work m orethan', Finance Co (ITF) said, "I assure you that owned North East'Jui ordered his ubordi- working for more than: shares. it will not fade away. ion nates to warn small six weeks to try to in-, SET president Dr Ma. Whoever is wrong in ah) and Firs Bang investors to be careful crease the onsupply o ruey Phadoongsidhi this case, he will be pun- City Bank (2,000 about speculating on sh res available on tha, give the assurance at a ished according to law." million baht). share trading on the .market. pre conference after Dr Maruey said SET Although the-e are stock market. "We are confident, he and otherSET offi- must make this case a only about 6-112 months Mr Suthichai said the there will be at least 12: cials had kept silent for; precent.--If it fades left for this year, Dr trading situation was securities worth around: a month after claiming 'away with no final out-, Maruey said SET had still controllable, but 3,00 millionbahtliSted that SET had found come, SET's reputation met its target set for SET officials were work- on the main and second: aufficient evidence to will be adversely af- raising the number of ing hard to ensurethere boards withinthe prove that ITF share fected as investors will listed firms and supply wasno manipulation month. prices were manipu- no longer trust it. As far of share for trading on and insider trading "We have propomet lated. as I know, the Finance the stock market. occuring in the market. new shares for listing on'; Dr Maruey said SET Ministry has appointed Meauwhile, SET as "We are taking what both boards to the Fi. had concluded its inves- some of its officials to sistant vice president we think are suitable nance Mizisty which is; tigation and believed join the task force coin- Suthichai Chitvanich measures to prevent very fast in approving: that there was sufficient mittee." said about 20 listed and such malpractices and 'listings." ; evidence to take action He also said six more authorised firms issued we are also trying to He said SET would: against the suspected companies had applied new shares worth alto advise investors to be also facilitate lited manipulators. to be listed on the sock g sther3,730.7 million careful when indeadd- firms issuing new "But whether to take market - three on the baht? in the first five in shares," he said, te shares to increase th action is up to the SET normal board and three months of this year. ing that, ironically, the supply on the market. : board of directors, on the second board to of these shares, chaired by Dr Aran be established next 1,937.6 million baht Thammano, and the month worth were sold to exist board will take some He said the first three ing shareholders and were Ayudhya Insur- the balance to the pub investigation report," ance Co (40'million baht lie. he noted. worth of shares), Srithai If the board agre . Warehouse Co (80 mil that the evidence is lion baht) and Sinpinyo ,.sufficient to prove that IV mutual fund (300 rthere was manipula. I miuion b nht) ( !'tion, it will forward the I He added that the case to a task force com. other three were Pa mittee, comprising daeng representatives of the' Industr Co Police Department, the Finance Ministry and SET, which will con sider punishments for the manipulators, in cluding possible crimi nal caarges.
81 SET targets Most stock ruralinvestors THE Seturities Ex- mercial banks' branches change of Thailand, in nationwide. . done an attempt to promote The SET will also en- on stock investments in bge the provinces, hs finance and s entered agreements CUrities companies to .s/i £... b a sis with several commer- appoint representatives cial banksproiavin in toesoretenable or stock agentsas sowinn the's " ..! ,.., c a s bs.... L provincial inventors to o il soon.en MOST trading in the ket yesterday soared to transferSETk'theirpreidetmoney..,a.-~ posbl.',:He said the agents. ' ' '" "stock market is con. 598.21 million baht, in pponsesd heb" " MaruY _ idhiappointedA y , an ducted in cash, a senior cluding the turnover of ruey Phadoongtiit we n, n., . t centralBank banker of Thailandsaid. trading17.04 million on the baht second in sad saidzatp~e at e' ebnsf\woul.. naveto be chief spokesmanThaean Siri tradinboard. onudtheyseon that the transfer could ftsw be made through com , trained by the SET and Kancharoendee told the Nonetheless, the SET ____ have official Prior ap- Business Post the cen- index fell by 1.48 points proval from the Bank of tral bank was very to 278.95. NewGovenment bonds wil Thal interested in the New Each company a bullishness of the stock Companies with a week issue a new batch of appoint only one agent market and had been stock turloverin excess government bonds worth for each province, he closely monitoring bf 20 million bahi yes 2,000 2,00meldonmillionn baht, askenior sio inalude said, with permission financial companies central bankersand which are also broker- Unionerday (90.41included millionalia The B Thand' for the agents renewed baht), National Finance Banking Department annually. Any agent a rmar- b77.),6NatililnFinance director, Vijlt Supinit,said found violating SET's gin loan extensions to (77.596 million baht), yearthe bondsinvestment would bebonds 10- regulations will have investorshmfo oa-xedto prevent millionRuam Sermbaht),KitBangkok(61.57 yerinanmannuatn ds hie permission termi- rateof 7e them from ovr-extend- Bank (51.55 million nated immediately. ing the loans. "But we found that baht), General Finance the extensions of mar-* (41.43 million thn loans baht), by brokerage TISCO (40.94 million irmswere quite low as bat), Union Textile most of the transactions (30.57 million baht), were dealt in cash," he Jalaprathan Cement said. (28.95 million baht).and He believed that the Phatra Thanakit stock investors may ac- (21.999 million baht). quire loans from com-r mercial banks' over draft facilities. Dr Siri also said that the current bullishness of the stock market was mainly due to heavy trading by foreign investors. "This is because the rate of return from in vestments in the Thai stock market is high compared with stock markets in other coun tries," he said. The Securities Ex change of Thailand is .currenlty very popular with foreign investors, and it has become one of the major markets for investments in the world. "Ican say that any foreign investor who did not know the Thai stock market is not a real investor," he said. Meanwhile, the trad ing turnover in the mar
82 SET inaugurates 2nd tradin boar
THE Securties Exchange of Thailand (SET) yesterday inaugurated its second trading board with turnover for the-firstday reaching about 17.8 million baht. shares. -.ks we Shares to be authorised pressed interest in being kok City Bank Thre-r Normal board transac. listed on the second for trading on the second listed on the second board to board are those which do are Padaeng Industry Co tions yesterday regis. blc..-, one a newcomer of525.61 stock market and the no! yet qualify for the (800 million baht) and tered a turnover the million baht, with the other two former first main board which re- state-owned North East F quireslisted companies to Jute Mill Co (100 million SET index rebounding board members over Friday'i newcomer is First eoprating profitably baht). 0.52 points The to 280.43. Bangkok City Bank, for at least three years. The higher supply will figure are Shaes to be authorised certainly help ease the The seven most active while the other two Saha Unios Finance & Se- for the second board can strong demand for shares shares were National (110.74 million baht), Na. curities preferred shares be new shares, shares of on the stock market, the companies which have official added. tional Finance (67.82 mil. and Strongpack, both of Sern autho- good prospects, or state lion baht), Ruam which hadbeen million bUdt) stocks before the enterpriseshares. - TURNOVER Kit (67.29 SET bfial said Fi-" Union Textile (35.24 mil. of the econd A Bank o nance Minister Suthee lion baht), Bangkok Singsaneh approved the According to the SET (34.97 million baht) FBCB'B shares opened millior a total of ' trading of First Bangkok announcement, the First TISCO (26.82 at 9.50 baht and and General Fi million shares were City Bank shareo on -the Bangkok City Bank baht) 1.52 nance (26.46 milliot transacted for 14.002 mil- second bo ird on Friday shares which got authori- comprise 2,061- ldht). lion baht, while the clos- evening. sation The five stocks witt was 8.75 baht. According to the offi- million-baht worth of ing price five the biggest price in The other 3.82-milli~,n- cial, about 10 more ordinary shares at a companies will' be al- baht pa,- value and 6.9- cruases wlre Siam Tyn baht worth of shares Invest NFS's lowal to have their million-balht worth of (10%), Bangkok traded were in (9.96%), Nationa shares. sham) traded on the sec- preferred shares rt the ment preferred Finance preferred share The operation of te ond board this year, same par vLue. increasing the That metros the bank (9.87%), Goodyea second board was re- thereby Union Plan by the supply of shares by as has 2,068 million baht in (9.66%) and cently approved tic (9.46%). Finance Ministry in a bid much as 3,000 million registered captal. to help increase the sup- baht. The stock market has ply of products on the Another two compa- set 1,000 shAres as a stock market. nies which have ex- bought lot for First Bang
83 Brokers prepare for G/'o Krung Thai Fund bid STOCK brokuu are now prearing - worth approximately 300 million their offers to take part in the bidding baht - which are mostly shares of to buy 4.9 million shares owned by the companies delisied f-eitiz i- KrungThai Fund, managing director of "'- Phatra Thanakij Finance and Securi- " ties Viroj Nualkhair said yesterday. "I still cannot predict how muoh Mr Viroj, who is also president of the profit can ba made after the bidding," Association of Members of the Securi- Mr Vlroj noted. ties Exchange of Thailand (AMSET), AMSET's president went on to say said that the association's members that he expects stock brckers to form were very interested in the Krung Thai three syndications to participate in this Fund's plan to sell 4.9 million shares bidding. worth an estimated 700 mi:!ion baht. As for his own company, he said he He said that there is rtill quite a had already instructed the companys large amount of shares held by the fund officialo to study the issue. Firm iilvites bids for I 15 Krlung Thai Krung Thai Fund
"or" A-% MANbids Fund shares THE state-ownedcancelled Krung offers were lowe 1> r sThalun Dank yesterday can- estimated price set by the THAI Secuities Co tuired to submit a list 18 and proceed with the celled the bidding for the Fund, so the committee A Spurchase of 4.9 million controlling the bidding (TSC) is inviting the, shares, their prices ard official bid. shares in the portfolio of had to cancel the bid, and public to bid for the first the number which he TSC will submit the Krung Thai Fund as the anewroundwacaledL lot of Krung Thai Fund wishes to acquire by 2 official bid along with a offers made by the two Meanwh:!e, Dr millionshares worth.abQutbaht. "-688 .i onwill Junebe kept16. Allin 30"million-bahtKrung Thai Bank bond beto bidderstoo low.r were considered Chalyudh Pilantha-ovart, A .ewwheduled bidn t president of istict c ece n 9 an0 a nu 6, KT vice chair-nance, Union Asia Fi. TSC said the public strict confidence. tween 9 and 10 am.on on July ,KTOvice chair- by hieaid syndication the offer madew could submit bids under If there are two or June 19. man Puchonz Pengsri and the following terms: more customers bidding The comp;.ny will said. dnthathghffernugd TSC will act as the for the same stock, TSC charge a 1?'-commission Mr Puchong, who Isalso d h ateof made centro for bid collection will select a bidder on of the offici Ai bidding themptroler -General of lower in the next roundbf from interested parties the basis of the bidding price ifit wins the bid. tphearentsald the First bidding. wanting to form a col- price per share, with the Krung Thai Bank syndication, comprising "If the Krung Thai Fund lective bid which will be highest bidder getting will announce the win- Bangkok First Investment reftued to accept the submitted to Krung preference. ner of the bid of the &Trust, Gold Hill. General offers and claimed they Thai Bank. The company will in- Securities Exchange of Finance, Phatra Thanakit were too low, it should call TSC will not partici- form all bidders at 4 Thailand in the late and National Finance & a bidding on individual Securities, offered 670.31 stocks, Inetead of on a pate in the bidding or p.m. on June 16 moring ofJune 19. million baht, while the eec- large lot comprising more acquire any shares in 'whether sufficient bids If TSC wins the bid, ond group, comprising than 4.9 million shares," he the fund on its own be- have been collected to the bidders are required Union Asia Finance, Asia pointed out. half to maintain an proceed with the official to pay the balance'and Credit, Asia Securities, An informed source said p c Thai Financial and Capital the Krung Thai Fund ex impartial position. The EiddingonJune 19. brokerage commission Development, offered pected to earn around 680 company will act as to the company by 10 646.4Gmlllon baht. 700 million baht from ths broker and earn a com- COSTS a.m. on June 24. Mr Puchong said the bidding. mission from the trans- 'TSC will immediately action if it, on behalf of . distribute the shares to its customers, wins the If TSC decides to pro. the bidders after it gets bid. ceed with the official them from Krung Thai Each bidder is re- bid, each selected bidder Bank. Share transfer will be required to place' expenses, if any, will be 20% of Lhe costs of their on the bidders' accounts. bids with TSC by 11 If TSC does not win a.m. on June 17. the bid, it will refund TSC will confirm bid- the deposits on June 24. ders' deposits on 'June
84 TFB names 29 firms to underwrite.shares THAI Farmer Bank yesterday appointed 29 financial companies to underwrite its eight million newly-issued STFB names 29 shares for sale to the general public. The shares are part 2,840 million baht than 7%a year. undw ; of a total 10 million which will enable the .q .. ters shares issued to in- bank to increase its areThe Phatra 29 underwriters Thanakit, THAI Famers Bank Ltd creame the bank's credit extension to TISCO, Bangkok First yesterday signed agreements registered capital by 50,000 million baht. Investment & Trust, to appoint 29 finance and 1,000 million baht to National Finance & securitie s stounderwrite 3,000 million baht. the sale of shares Issued to The remaining two DISTRIBUTION Siam,Securities, Ruam SermDhana Kit, raise Its paid-up capital by million shares will be sia r Kit, 1,000 million baht.odt tseitn Asia Credit, Kiatna Of the total 10 million shares, sold to its existing Mr Bancha asked kin Finance, AITCO, two millions will be offeed to' shareholders. at par of the underwriters to Cathay Trust, IFCC, existing shareholders at 100 100 baht each, while distribute the new General Finance, Citi baht par and eight millions for the shares to be sold to shares to small inves- corp, Thaimex, Thai pubsic offering at 330 baht the public will be tors, particularly those Financial Trust, Nava Laemam said this was insasaid thislnwa~a recordeord280ec priced at 330 baht in rural areas, so that Finance, Pock Club, In h offering worth 840 eacha a. they can acquire se- Bangkok Investment, miibon baht it will be able to Bancha Lamsain, curities which have a BCC, Pacific Finance, lend up to 50 billion baht the bank's chairman, stable i ate of return. Poonpipat, Mitr Thai following the Increase. :* * said during the sign- He predicted that Euro-partners, Ocean, Seen, signing the agreement are, .Tom Ift, President of Thai sngceremony that the the bank wll make a Union, CMIC Finance, Investment and Securities sale of the new shares pre-tax profit of 1,185 Thai Financial Syndi- Siviepom Dardarananda, TFB Will help the 5anks million baht and pay cate, SICCO, Asia, and Bancha Lamsam and President capital fund expand by dividends at no less MCC. of Phatra Thanakit Co Ltd, ViroJ Nuallchae at the- banks headquarters. .. ,. ,: ,...,,,..,,".
Bank to IFCT sels
raise d C e ls The period open for capital debent s debonture subscription was to be from May 15- SIAM City Bank is to or June 18, but asthe first increaseaitalbyits500registere0 million lot of debentures was ita b 00 million 3 0m. a t commercialsold oui very banks quickly andto baht to 2,040 million insurance companies, baht, a source said yes- the IFCT decided to in. terday. THE Industrial F . crease the volume of The executive board, nance Corporation of the first batch. of chaired by Chalerm Thailand (IFCT) has debenture to 300 mil. Chiewakul, decided new sold 300-mllon-baht lion baht and this has sham to be issued would worth of debentures to now beei sold out. be sold to shareholders at 10 financial institutions 6.50 baht each in August. fter the sale began The source said the "The bank's original ;two weeis ago. IFCT board had ap plan wa to r te 'A proved the sale of capital by January next JFccodin to an another 550 million mlar, but the board felt IFCT source, the origi- baht which would be time was rght nal intention was to released partially de earlier," he said. issue 100,000 deben pending on the market Meanwhile, another tures worth 100 million situation. source said the Bank of maturitybaht with perioda three-year and So Thailand has recoin 7.25% annual interest eight far, IFCT has had mended the Siam City sales of deben. amountingBank' classify to 200 millonloans payable biannually. tures totalling 1,030 baht anbad debts. 700-mfllon-bahtmillion baht, of worthwhich ha. still not matured.
85 Thailand's first floating ate issue hits the market by Rakesina per note and w icarry fluctuate in line with quarterly interest set- . market conditions and STARTING next week, tlementaatarateofl% managers ' Thai need to be. investors will have, over the average time ,, very sensitive od 'that access, for the first time, deposit rate ofthe score," warned Mr to floating rate notes Thai commercial Vi (FRNs). chai. Reliable sources indi. -O In the case of the Ua While.auh notes are cated that the total pric- withya deal, TFS has extremely popular with ing imPact for this nd money manager's privately placed most of in the of issue, for the " the paper and intends to established financial company concerned, can retain an inventory their first intro- only be evaluated after . , solely for the purpose of c tresthe first Intr- guarantee duction to the local mar- placement .feesccsts andare testing investor senti combinedket is a result of the taken into considera-* ment. Besides, said Mr effort ofa Vichai, "we will offer number ofparties. tion. constait buy-back . As a result of an "We had to account pricee for agreement signed for numerous market sell, withoutany paserthat thewe earlier and ied factors in arranging the e market's ability to ab nd e issue" explained Mr Krirkkiat sorb fresh issues will mented yesterday, Ua- Ksoon be exhausted." withya Equipment tion of all concerned This transaction theCompany fiat corporatequalified to as VITAL parties is absolutely illustratesTi thatrnato yet -- vital," said Mr Krirk-. atefudn ae raise finance through a kiat. He further ex- .anotherfunding avenue commercial paper isue Investor appetite was pected this commercial o ofthis nature. borrwincoss fr ated insu pricingand c r eire o one criterion. Ietuction paper issue to "set the corporateoadjust borrowing who desire coats. to The .guaranteedFRNs will be of borrowing costa for trend in pricing and Furthermore, by the Uawithya was another, structuring for other rate can swap hisa corpofloat Bangkok Bank of Com- The placement ability of similar deals in merce (BBC) whose sen- TFS future." wasfactor.BBCiticorp'sePoet also a favour- Already, learntathataanother the Busines ing rate exposure and ior executive vice presi- able factor. Citicorp's Poet learnt establish fixed funding dent, that another costs. In other in Krirkkiat Jali- issue and buy-back pric- two commercial paper stances, caps or ceilings chandra, is accredit ing advice was vital, deals with initiating, - involving the can be bought on the plan- Finally, the benchmark same price basis - are benchmark, thus ning and formalising (the time deposit rate) near completion the issue. with locking-in funding. Thai Finan- had to be acceptable to TFS playing a role in loc gfd cial Syndicate (TS) is the market at large. both of them. the manager TFS presi- Mr Krirk dat empha for the • Behind the scenes, re- dent Vichai Assarat told ised his bank "will issue and, as reported nowned legal expert Dej the earlier Business Post that gradally gear itself so in the Business Udom Krairit has been he "regards itunovation that it can offer the best Pos, Citicorp Invest- working feverishly to in the ment commercial paper monetary instrumenit Bank has acted as streamline the proce- market as important for and the best hedgevehi the technical adviser. dural and taxation for- the development of the cles to customers, The total issue is for malities. both 50 capital markets in Thai- borrowers and inves million bahC * "When putting a pio. land." tors." His commnts The FRNs will be neering deal of this na- 'The spread over the indicated a definite offered in denomina- ture together, the full. benchmark (1%over tions the commitment, to refur of two mLllion baht and complete coopera- timne deposit rate) may bish the image and widen the client base of the Bangkok Bank of Commerce.
86 OK POST THURSDAY JUNE 11, 1987 .8IFC offers Insurance )firms buy loan for 6 bonds worth B2,69:m . iaVESTEDpetro plan
I~ Ine OM e i t The insurance indus- in ,R ayong recently reported 1ty as a whole invested tat insurance compa- 14,76 millon balit in ides in 1985 *i 18 a 19.41% increase Z691 million b~ht in ptier the previous year. n;neeINTERNATIONAL Cop ant of theFi- productionvolves the of 315,000annu~l vernment bonds Of the total, 2,691.31 World Bank, has offered tons of ethylene and
Wich p vie invectrs iion govenent a ,20-million loan to the 105,000 tons of propyl rith a rtuble and secure Vested, in government semi-state-owned Na- ene, the feedstock for :rate of return and are [londs, up 188.74% from tional Petrochemical four integrated down liquid enough for peri- the previous year. Corp's $290.8-million stream petrochemical odical cash require- p The breakdown of upetieam petrochemical industries. ment • tisurance companies' co ex in Raong. He outlined the An I0 report at- hinvestments in bonds in officials are in progress: tributed the high level '1985 was: 1279.45 mu- Bangkok negotiating 0 Site preparation 0f investment to its past lion baht in government with NPC executives on over 350 rai in Mab Ta ,policy which specified I bonds (47.54%), 453.21 the terms of the so- Phud, Rayong, corn 'that insurance firm in- !million baht in State called "subordinated" pleted. vest in stable stocks and iRailways of Thailand loan. 0 Construction of 32- .at the same time pro- : NPC president Dr million-baht office and %iide the Government :Iaht in Telephone Or- Sippanon Ketudat other buildings statd I*ith funads fo national gjanisation of Thailand i fu or nsaid Spaouuyesterday theeua offer thiste monthulig tre 4evelopment. :bonds, 141.76 million demonstrates an inter- complotion inand May due next for , " Invegtmento in bon?" ',faht in Metropolitan national or zmisation's year. iisued by the Govern- !Water Works Authority confidence in the olefins iment and state enter- bonds, 120.20 million o lex. ;irises may not, how- inMetropolitan I Wihtheborrowing will be CONTROL ROOM 'ver exceeda~mssets.' 40% of a ':Electricity;bnd 116.27Authority' an additionaladdtina reit linelne a .bonds and 1.16.27 rl- NPC gets. Last Janu 2c baht in Petrleum ary, NPC. signed agree :Authority of Thailand ments with six Thai 21-millionbaht com :bonds. commercial banks for puter control room to .' The report said that credit facilities worth start in September for insurance companies 5,960 million baht. One completion in May next .have dispersed their in- contract is a guarantee year. vestments over a wide facility for a 3,900- 0 Import schedules of uge of .businesse It million-baht Japanese equipment and machin red.the riss in- supplier's credits. ery, involving 40-50 volved.shipments from Japan, IFC has a 0.675% South Korea, Europe share in NPC with the and the US with a total state-run Petroleum value of $135 million, Authority of Thailand have been confirmed. having a 40% stake and 0 The first shipment the four firms involved of imported high-qual in the downstream ity pipeline, 485 tons in projects, and the Crown weight, has just arrived P rty Bureau hold at Sattahip and is due to theremainder. be delivered to the sit. tomorrow. Dr Sippnondha said 9 Piling tests con construction of olefins ducted and driving of complex is on schedule about 1,000 piles 'is 87 to meet the onstream scheduled to start next. date of October 20, month for completion in 1989. The project in- October. 1Central bank exec gets ITF post SAMPHAN Limtrakool, the deputy extended. Additional revenue of 200 million director of the Bank of Th..liind's The third concerns improving the baht from" the sale of ITF's office Banking Department, has been speed and means ef getting loan condominium will also help build the a ppointed the president of_!nternation- repayment to at least 18-20 million financial strength of the company, he alTrust and Finance whiletabrgets baht annually. The last area is added. "-h--ii 'mapedouT to stiore up the increasing efficiency by ,-utting cost by His plan includes an attempt to operation of the company. 10 per cent per month. reduce staff overtime in ordei to -Central Bank Governor Kamchorn Samphan, who was granted a achieve a monthly 10-per-cent expense Sathirakul last week approved a temporary transfer from the central cut. temporary transfer of Samphan bank for one year, told The Nation over replacing Sa-Ngob Punnarugsa who the weekend that' he hoped to achieve The four aims, if successfully failed to be re-elected by the ITF successful results at IF. implemented, would help the company shareholders in April. reach a break-even point within two Meanwhile, four goals have been set The company has a negative image years. trabitate tr coman oavrabeen st to shed and will seek self-sufficiency in "It trtban is somewhat luck with the am a e ration mobilizing funds. The auditing system favourable trend in securities trading. firste concerntwo years. must be strictly controlled todrevent ITF can expand this business and raise managing the. unne.assary losses, he asserted, its rankingfrom amo;i, the least active company's funding to increase liquidity The new president of ITF said the brokers to a more active one," he and flexibility. The company will try to ,'mpany would not need to increase its commented. sell 300 remaining empty offices at its capital at this time despite interest ITFlis owned by.Dg.a the pmen-lFund forof building on Silom Road as soon as expressed by new investors to Rehab-i--t-ioiF-id. possible. This is expected to fetch an participate in the management. "FciIihh'iitons an the additional revenue of 200 million baht. Samphan remarked that a fund "-xrsBanof Ho-ng Kon , The sc-ond concerns maximizing mobilization target of five million iaht It posted a doubtful |oan loss 0 ing earnings from its six branches and per branch) would fuel new credit to be 580.8 million baht and shoulders court achieving mobilization of new deposits handled solely by the head office. The cases in claims for loan repayments to of at least 30 million baht per month company will set aside 20 per cent of the tune of 438 million. baht as of with matching qmnhinta of credit deposit as reserve. I December 31, 1986. Suthee is the next Coordiator Opposition target
appointed FINANCE Minister Su- against PM's Office THE Suprvisory Board n thee Singsaneh is next Minter Ciirayu Isa .working to solve the prob- in lin, for an Opposition rangkura na Ayut mo flnial attack in the form ofan thaya, who was alleged ns Inthe oecal life boat-a urgent motion accusing to have $3.7 million in a -hs appointedlcheme A Nibhat Phk t, state bank officials of Los An,~eles bant ac deputy. director general oI corruption. coult. the Fiscal Policy 01ce, The motion, spon- Wlhile the charge has coordinator between the sored United fl-nk'o Thiad th M oe by UntdDemo- V1- been largely discred nance Minisry ad t cratic Party MPs Prem iited, Parliament is KrungThallank Malakul, Somsak *. - awaiting the findings of The appointment Is Charnduaykij, Sihanart , an extraordinary panel Irung 1Tha Bkwi Rumhc, and Vinij , n Thursdsy. was assigned by the Cah- Chantharasurin, EL- Sources said the First notms take control ofthe cuses officials of using Interstate Bank, where l, boat, solv the b. bank funds to*'guara n- the money was sup. 'en-bilRt ofsome . posed to have b~an -iling- commrcial deposited, has told the b5anks anfinanceinsti- . f . panel there was no ac tutions. I count under the name 'Thie MP said that in "Chirayut Isarangoon". doing so, the officials The Opposition has linedtheir own pockets SUTHEE...tacing mo- been iporib-ring indi and received personal tion. viduai urgent motions benefits for overlooking against .he Govern.. regulations on the use said the racket was ment on various topics of state funds. harming the couatry's and charges since its * Urging Parliament to economic stability, failure to submit a no ask the Government to The -'aliegations fol- confidence motion investigate, the MPs low last week's debate against the Cabinet. 88 11 set for merger railing. companies S-New firm to have B1 ,OO0m capital THE Finance Ministry has company is expected to be Pong cial loan, housing loan, consumer completed ;k plan to merge .Savetsila who is the metropolitan loan and securities businesses. five finance ad secui6-e credit manager fomvanies and a BitBank. Pong of Krung Thai The new company is expected to is concurrently chair-, face problems as 60-70 per cent of "nd estblish-a -- man of Commercial Trust. He is its assets are. in the rnon-earning comn c a ane expected to remain with Thananan category with 10-20 major debtors. compay c.nanan Finance and Securities Co for one But the merger will simplify the Finance a Secu sit6Co." year'to oversee the implementation attempt to bring the bad debtors to ThIananan Finance anaSecuritiei of the merger plan. the negotiation table. ..- Co will have a registered capital of The new company is expected to Krung Thai Bank is expected to 1,000 million baht and assets have 5-7 directors and senior oversee theoperations oT ananan totalling 10,000 million baht. • executives" of each of the six Yiance and Securties Co an The six companies to be merged companies on the executive board. nurture it during the transition are Sakol RealEstate Finance Co, The merger plan has been period. Pong will act as the Commercial Trust Co, Thai Finance reported to Finance Minister coordinator and he is expected to Co, Sakul Thai Trust Co, Financial Suthee Singhasaneh. It-is expected transfer businesses, which Krung Trust Co,. and Credit Foncier to be used as a pilot plan to shore up Thai Bank might not be in a Sakolsiam Co...... other ailing finance and securities position to get involved, to the new The operating licences of all six companies under the life-boat company. 'firms will be revoked and replaced. scheme, worked out in April, 1984. It will. be sometime ! before the with one new licence but the new Thananan Finance and Securities company takes off as it mut bc company will only be involved in Co is expected to be permitted to registered with the consent of all finance and securities business and engage in hire purchase, commer- the people concerned. not credit foncier. It is expected that the head-office of Thananan Co Ltd will be located at the existing office of Commercial Trust. Offices -of five other com panies will be turned into branches. The merger plan has been completed and awaits a ministerial -announcement t0 allow finance and securities firms ~omerge. This.could. take place as early as July 1. .: - Chairman of the proposed new company is expected to be headed by Nibhat Bhukkanasut, who is the deputy director of the Fiscal Policy Office. Nibhat is also chairman of Sakol Real Estate Co. Acting President of the new
89 BANGKOK POST THURSDAY JUNE 11, 1987
Suthee set to blunt
attack over
bank woes PROP FINANCE Minister Suthee Singsaneh yesterday called a meeting with top central bank In addition, 1,040 mil. executives to brief them lion baht before an expected confrontation with in asset financ- I which has demanded an explanation the Oposition ing was used to prop up on the bank alie the banks, a d S ,, source, the. boat" PolicvtO prop up financiagll.aiing addng tatbout financin stii-i s200 min ht in Bank of Thailand finamcially.unstable soft loans Governor's fi- case of Sakol Real Estate and working Office director nance companies by giv- cpital were paid out to and Finance Company. ailing finance Siri Karncharoendee said ing them soft loans, companies par- A ministry source said and financial yesterday the finance tially taking over institu. minister would explain to eir apart from Mr Suthee, tions. equity or carrying out Deputy Finance Minister the Opposition why the Dr Supachai yesterday mergers so as to enhance Supachai Panichpakdi central bank had to inter- their financial said central bank inter position would also explain assist- vention vene in the affairs of as, for instance, in was worth the the ance given to certain risks involved financially-troubed as it had com- prevented the economy mercial banks in the form from plunging into ofsoft loans or fund injec- tions to deper trouble. increase their He maintained the working capital. loans extended to ailing As far as soft loans are banks and finance concerned, firms the source would not be lost maintained because the Bank of the central bank did not Thailand does not out hard cash to aiin'ggive themactually whichgiveir differentcash to banks. from the salvaging During the 1983 fi. 'method nance employed in the company crisis, United States, Ilong entral inter.ien. Kong or the Philippines tion saved 9,000 million where cash is injected to baht in deposits, about rescue financially-ailing 6,000 million baht of the firms or banks. former Asia Trust Bank (now the Sayam Bank) and another 4,000 mil. lion baht!n foreign debts. The source said assist ance given to ailing banks Asbeen as fol lows: 3 3, •Alior baht in soft loans and 75 mil lion baht in working capi *tal to the Siam City Bank; 3,300 million baht in soft loans and 500 mil lion baht in working capi tal to the First Bangkok City BaA and 4,200 mil lion baht in soft loans and . 1,500 million baht in 90 Sayamworking 2 ank.capital to the FRIDAYGovt JUNE 19, 1987 defeatsHOME NEWS motio: lIflofit halt bank take.over. AN urgent Opposition mo- Prem Tinsulanonda, who shortly losses. The central bank arranged they did nothing. These officials are tion urging the the Govern- afterwards left for Government soft loans of 5,000 million for the liable to criminal charges," he said. ment to halt central bank House. bank and was putting in 500 million These institutions hold about CAP leader Boonchu said the cen- baht a year just to keep the bank 12,000 million baht in public say akeovers of commercial tral bank was entrusted with the operating. ings, he aaid, and the people as well banks and rescues of aU- task of monitoring banks and trusts, Mr Boonchu said the Government as the country could be put at risk. ing banks and trusts was and its officials should know every was also aware of the failings of the Mr Boonchu also said there were Wjected in Parliament yes- step they take since they have to fill management of the Nakhon Luang illegally high interest charges and in hundreds of forms. Thai Bank, from which Mr Boonchu secret accounts, one called "lisa", to aerday. The fact these concerns were al- was forced out as the board chair- benefit the officials sentto the banks. The Government outvoted the' Op ing highlighted the central bank's man, but tried to help it. Prachakorn Thai leader Samak position' by 117-54 after a daylong failure to check practices such as The country's 120 trusts, with said the central bank governor had a debate in which Muan Chon leader extending large loans to the relatives combined assets of 80,000 million free hand until the previous finance Chalerm Yubamroong accused PM's of bank officials. baht, were also in poor condition yet minister demanded loyalty. secretary-general Prasong Soonsiri Mr Boonchu said the minibtry the Government did nothing until-it of using his influence to pressure the should have seen the signs. He cited was too late. The Government then Sate-owned Sayam Bank to lend a set up the "4 April" (1984) measure businessman 80-million-baht. to transfer the shares of 25 trusts and Government MPs said Sqn-Ldr step in to run the trusts as the people who failed to Prasong had followed procedure in 6 am glad the Prime three ailing banks. subsequentlymaking the rejectedrequest, by thewhich bank.was inister ishere to listen Official help was granted on the monitor the failure of The motion was sponsored by to the motion since he basis of personal favours with some commercial finance Cohenit ction adrsponord hadtothe meo ation ofeh90 central bank officials, who did not Community Action leader Boonu had the reputation of always have direct experience in institutions were sent to t Boonthengieader Thongsawasdi, being concerned with the banking, sent to run them. control and run Prachakorn Thai's Samak Sun- welfare of the These officials, he said, were paid them?9 daravej, Runin Thai's Naronf Wang- people salaries at the banks and trusts wan and the Progressives Uthai until a millionaire ranging from 20,000 baht to 80,000 Pimchaichon. baht in addition to 7,500 baht per Boonchu Rojanastien Opening the attack, Mr Boontheng commended him.9 dem amonth plus company cars. _ said the Bank of Thailand, with Mr Boonchu said the officials then .Finance Ministry approval, inter- Boontheng Thongsawasdi brought their own people in and Central bank monitoring official suned and aggravated the problems came to contrnl the concerns they in any other country would be fire of the Sayam, First Bangkok City were working in. He said what hap- for their negligence, said Mr Sama (MahaNakhon) and Siam City Bank pened was no less than a takeover of In Thailand, they get promotion an (Nakhon Luang Thai) and 25 trusts. the draining'of the Sayam Bank's the private sector. pay rises. Central bank and ministry offi- assets of 10,000 million baht before The Prime Minister, he said, did Dubious practices were rife at th cials took over the banks and trusts the Government had to inject 8,000 not seem to understand what was the central bank, and the comme-cis 9id diverted government revenue to million baht to rescue it. going on, and he issued executive banks were alluved to get away wit help them, said Mr Boontheng. The Amid reports that a top Maha decrees giving the central bank more anything. gantral bank also amranged loans Nakhon executive was about to flee power to move bank administrators with interest as low us 1 per cent, the country, the Government main- and order capital reductions. Mr Samak said the Krung The and some uven 0.1 per cent, for tLo tained vhe bank wan secure - and "How is it that the people who Bank sold 25% of its shares but fuxe ailing concerns. the executive fled the country, said failed to monitor the failure of corn- the accounts to the extent that "I am glad the Prime Ministei is Mr Boorchu, ref3rring to th, bank's mercial finance institutions were profit of 15 million baht one yes hero to listen to the motion since he former managing director Khamron sent to control and run them?" Mr turned to a loss of 500 million bah had "he reputation of being con- Techapaibul. Boonchu asked, and 1,000 million baht the next year cerned with the welfare of the people As a result, the Government was "When others did wrong the Gov- Muan Chon leader Chalerm sai pntilamillionaire commenedl him," forced to lower ita share value from ernment moved against them but central bank officia!s knew Mah C Botheng said in a dig at Gen 100 lipht to 5 baht to finance the when their own people did wrong Nakhon was in bad shape but the
91 17 WY N a 4 "1
A'
-. 04
sat idle becuse they wanted to go -- Mr Pratuang then ac- banks were ailing for fmar Finance 6/i there and earn more money. Pol Capt cused an MP le did not of sparking a run which i Chalerm said the wife of Finance identify of acting as a would aggravate matters Minister Suthee Singsaneh isan middleman for a further. account inspector at Maha Nakhon. company by writing to The Government's The Muan Chon leader then the Commerce Ministry priority, he said was Finance Minister Su presented the letter by Sqn-Ldr Pra- to seek a quota for a 76,000 million baht in thee Singsaneh, Prime song, saying the person who went certain product. public savings and the Minister's Office Minis with the letter to the Siam bank also Pol Capt Chalerm rose 70,000 million baht in ter Meechai Ruchupan to say he did not accuse loans to businesses. It and Prme Minister carried 500,000 baht in cash. to provide "Does secretary Prasong get any the PM's secretary of cor- thus decided benefits if the loans go through? The ruption but simply sug- soft loans and intervene Prem Tinsulanonda lis- honesty of the Prime Minister has gested the practice be in the hope of getting the ten at the start of the been used up by those around him. looked into. As a former business back on its feet, debate on the perform He should check this out," sid Pol PM's deputy secretary, he and six trusts have al- ance of the Finance Capt Chalerm. said he knew that the ready started to run on Ministry. MP for Ayutthaya proper course of action their own. Liberal Party Page 3 Col Narong Kittikachorn said the was to refer such requests It was necessary to ad- Fult report: central bank appointed one of its to the central bank, and just the internal adminis. officials, Miss Varee Hawanond, to not make direct ap- tration of the banks and Gen Prern later went to the Sayamn Bank where she was preaches to a state-run trusts and send central Parliament and attended given 90,000 baht a month and the bank whose officials officials in. The officials a debate for about an use ofthree cars. feared senior government had been ordered not to hour in which he heard He said the Government Housing figures. draw extra pay, he said, Community Action Party Bank receiyed an insurance discount As for the quota and those who did would leader Boonchu Rojanas. which weat into a welfpre account charge, Pol Capt Cha- face action. thien lash the Finance controlled by the managing director, lerin challenged Mr Pra- Dr Suthee said the Ministry and Bank of who took money for overseas trips tuang to produce his let- "lisa" account came into Thailand. during which his wife bought a pic- ter. "I'll resign from the being because of a regula ture frame and charged it to the house if there is such a tion barring such reduc- ing fiscal officials of account. letter," he said. tions. A special account ing a fw as an Chart Thai MP for Petchaboon Finance Minister Su- had to be opened, he said, allowing a few bank and mentPanja hadKesornthong to intervene said the Govern- thee said the central and the picture frame sesral finance compa because it bank was very much was a pre3ent for an over- nies to ren into deep trou knew the mnagers were incapable. ipdependent of the minis- seas bank. bie oi Phitaanulok MP Pratuang Vi- try and he was surprised The minister said his aid.Obseer said it was charnprdecha said the MP who to hear otherwise, wife, who is an inspector Obhe-- ai ime We presented Sqn-Ldr Prasong's letter The three banks and at the Maha Nakhon thme Master had spet did not submit all the letters he had 25 trusts were victims of Bank, had studied bank- npri " enm on the case. an economic slump, he ing and had been in the an alae n o, he The Chart Thai MP said Sqn-Ldr said, and they were run position for 10 years. sai an ion Prasong made the loan request in by youthful executives Referring to the mis- to Mr Boonchu's debate. accordance with his duty because the with little knowledge and use of funds at the Gov company had written to the Prime experience in banking eminent Housing Bank, Usually, he said, Gen Minister seeking support for the who 'Just declare thdm- he said the funds had Pr~ei stainthe C-H"-_' loan, which it could not secure. selves financial experts", been restored. "er for a short while and The MP who made the allegations Minister Suthee said. Deputy Finance Minis. eaved immediatel when was doing little more than mud- The central bank had ter Supachai Panitch- the House goes in -"lTd- slinging because he knew people always been strict but it pakdi said the country Agenda.Alternatively,he loved to aee the dirty linen of others. was only in 1985 that it operate under a free skps -wtolemeetin. was given the power to trade system and the cen- 'ssecretary-generaa intervene. Dr Sutheq said tral bank could not nor- Prasong Soonsiri said the Government could mally interfere too much Gen Prem hai never not.spread the news that with commercial banks thought of evading House other than to see they meetings, but he some 9' meet the set requite- times had to skip meet mento such as having ings to make pro-ar sufficient funds. ranged visits. -aw wirein' tpia
THE OPpoiton wa ItidIn certain points - 2-A in its attak on the Government's handling of / collateral. That is, it will not get the soft loan as the banking problems, and in many cases, the central bank's actions were really not accept- money seed. However, te soft loans carry a low interest able to the public. rate, say around Among 1%a year, while the govern the obvious fauilts, in my opinion, is ment bonds will the central bank's carry about 7-8%. That is the failure to take legal action a troubled bank will earn against executives of income from the rate. troubled commercial difference at about 6-7 baht for every banks and financial companies. a n d 100 baht A case of soft loans in its books. in point in the Asia Trust Bank, now In effect, if renamed Sayam the central bank extends about deep trouble.•deptrule,Bank, which found itself in MU[3,000 million baht in soft ! will give that bank about 180-210loans tomillion a bank, baht it The Bank of Thailand claimed it tried to urge that bank's executives, a year. mostly Tarnva- by Pattnapong I disagree with the idea because nichkul family members, I think it's to correct the situa- lCh ntranontwong not fair to other businesses. tion, but the orders were ignored. I6 t At that time, the Commercial Commercial banks or financial companies Banking Act L are business concerns just as other operations wan yet to be amenced, and the central bank are and when they suffer losses, the executives had no power to intei-rene. It had to wait until and shareholders was ahould carry the can, and not the bank beyond rescue to seek the Thailand. the public. Finance Minister's approval to carry out a This case was different, since the Bank -takeover. of If an ordinary business firm is in financial Thailand had the power under the amended trouble, has the Government ever rushed to its Before the takeover, the central bank had Commercial Banking Act to ban any bank rescue? more-than-enough evidence to take legal ac- executive from leaving the country for 15 days Although tion against a bank or financial compa L the bank's executives, including oven in the absense of legal charges. business is taking deposits chairman Wallob Tarnvanichkul and from the pubic an .1 his son But the central bank did nothing! lending them as loans, and if it collapsed, it Tinnakorn, who was then president. Yet noth- I used to protest against the Bank of Thai- ng would adversely affect tae depositors, I still wa done and allowed Wallob, better land for its ignorance in various occasions, and disagree known as with the policy of injecting soft loans Johnny Ma, to leave the country I will continue protesting, while the executives freely. get away with their The Bank mismanagement. ofThailand decided to file charges "** * If the Bank of against him several Thailand was tough enough, weeks later but took no I ALSO disagree with the.ank of Thailand's and took strong action against action against Tinnakorn and those executives even let him policy of injectin money, throuhtefi-j n- as a precedent, others may be more careful remain an in executive ofthe bank. " o loans- totreuTbled banks and running their banks. Several months later, the Bank of Thailand lina-ncmiirmns. • filed charges Although the penalties on bankers and wth the police against Tinna- Although the Bank of Thailand has argued financiers guilty of mismanagement korn, who by are very hat time had joined his father that the soft loans extended to each financial heavy, they cre aomewherfi meaningless if the authorities in Taiwan. concern were just figures and what the trou- do not enforce the laws. I, and I believe, many readers, do not bled firms actually got was the difference of understand why the Bank ofThailand did not interest rates between the soft loans and the act against the two Tarnvanichkuls when they government bonds purchased with the colft were in Thailand? loans. Up to now, the Bank of Thailand has not In practice, when the central bank approved clarified why it did so. the extension of soft loans to any bank or KTB makes 1 History was repeated in the case of Kimron financial firm, that bank or financial company "Cor" haibul, former president of the had to subscribe government bonds First Bngkok City Benk. The central from the plans to tok bank central bank's portfolio at the same amount, action against him only after he had left and place the bonds with the central bank as rescue firm
workingKR6fG outThai a solutionBank toIs the debt problem of 8uk. humvit Condominium Co, owner of the Tuek Thong (Golden) Condominium, KTB executive vice presi dent Roengchai Marak4. nanond said yesterday. He said the bank had come up with two alterna tives, the first one being to negotiate with other credi tors - Lamthong Finance, Ernwan Trust and Panich Finance - to convert their debts into equities in Suk humvit Condominium. He said if this could not be done owing to some legal snags, another alter natve was to convert debts into equities in a new company to be set up and runby KTB, the major creditor. "What Is to be done Is 9 forming a holding 3 company under the name of Krung Thai Land & House in cooperation with Kruang Thai Bank," he said. Savings Savingsoperationsinterest Bank set Bank says %_stays~ (16-tax-free----- .Jsituaionfor 'tight' gigooington THE Finance Miistry by recording their depos. its saving while, asituation snor al it wol ot levy income the same taxes on in.eresa e .' them tune, paying MM Farmers B'n in' a higher interest preparing a strategy to STATE-owned irom commercml bank rate on the condition S they cope with a possible eaa at savingsdepoIts, would not withdraw their tight money .'-a- situation, aoits et Secretary money for at leant a year. enlor executive for. Finance sadL -an jingbusiness as nor Panas Si-. The practice reportedly, Senior vice president maiathien* said one ofao thb' affected'ot' eeu*the, oleto,Govern.- Tehe RotnprmMinistry mal despite the Finance Roontaaprm policyiy toa mergeeg Finance Ministry MaJor ments policies was to encourage as its interetrevenue tax collection, collec-, said he had ordered the it with K ng Thai Bank. the bank's credit 'officials President •Ruen 'In ublic to save more, tion in the first eight to compile accounts and the tax ho of tanok said he had not months of the fiscal year clients using overdraft interesv from savin wan about 60% lower, ordered.the bank to stop facilities o the bank providing credit to - Mic~_ F, than targetted. Amea ures, knewmuclIients.en exactly how clients. fli an He was confident total much it had extended.ed viftheF n sa collection "In the case of' old this year would "It isvery iportant clients, depoits interest, itwould not fall short. the credit lines t know the actual extended, to affect the public'st v. Regardin them by the the com- extension of our over- bank remain unchanged, mercial bas practice of facilities," and the bank has never .confrma-helping clients evade saild. "At present, the Pftan e nia interest tax, Dr Panes liliuidity reduced their credit tion of the Finance Minis- in the banking lines," Mr Ruen said. d he believed only a stem has declined to In the cane of new countsxwstrs intention not to im- "few committed uh prc- aout 35,000 million clients, made after tcmi.& baht he said the bank go lower.and Isexpected to would consider their was reported ' applications under that the Fi- "But they did nothing 'Me money situa- the nance Ministry might im- wrong because regulations ofthe bank.' the rates tion will become tight if if their pose interest tax on all they offered, though projects are the liquidity drops by ood and qualified, kinds ofdeposits. higher than other tvmks, another the This was 10,000-20,000 bank will surely approve because were still under the offi- million baht," said Mr several their requests." cqmmercial cial ceiling set by the Thep, who has just banks had helped their Bank of Thailand," Dr been transferred clients from EFFICIENCY evade interest tax Panas said. the International Banking Department tto take charge of the Regarding other bank .Business Department. ing services, Mr Ruen Mr Thep said he was said he had not ordered also streamlining the the bank to stop provid. bank's credit extension ing, rather he had told process so the bank the bank's staff to im could extend credit to prove their efficiency to old clients with good provide a better service to credit ratings within the bank's clients. seven days and to new It was reported clients within a month, that the bank, underearlier the instruction of Mr Ruen, had rejected a proposal from the Expiesway and Rapid Transit Authority of Thailand (ETA) for a loan for its employee housing programme. Mr Ruen said the re port was inaccurate as the bank had not rejected the ETA proposal. "The fact is the bank approved the ETA's wel. fare project. And when it submitted the second project seeking more 94 loans, the bank also ap proved it," Mr Ruen said. GOVERNMENT/ INDUSTRY
REGULATIONS
AND
INTER-RELATIONS
95 Govt urged to assis small', industries THE Governmet has been urged to give more real supportto small-scale industries during the Sixth National Development Plan period 1987-91 to oeduce their production costs and make their products more competitive o the world market. In a study on "Small- change ideas and view Scale Industries" con- points, guarantor for ducted by the Industrial their borrowings end Finance Corp of Thai- loans coordinators land recently, entrepre- among them, and .a neurs in both large and source of soft loans. small industries were UMPromote the sub qoted as reporting that contracting production t Government was syetem which can help_ not cutrrently giving speed up the nations enough support to industrial development. small-scale industries In this syntem, sub-con as in other countries, tractor firma, normally They said foreign small ones, supply parts. governments truly sup- and/or raw materials to ported their industries, parent firms, usually resulting in lower big industries which production costs, while can benefit by: adopting foreign industrialists sub-contractors' up-to had more marketing date technology to im expertise than Thais. prove their production; ,O ey added, that. iq ., ,reduuing.the entire ayk-1 : iland, smail-scAlo tem's investienet 'ts. ,4tstri.es were in a in fixedassets esu°ing ver disadvantageous in lower production cost po.tion because big per unit; doing with industries had stronger plana to allocate financ bargaining power and ing for production more political influence assets leaving more than small ones. time for them to look They' also noted that after the other aspects financial institutions in of their businesses; general were reluctant reducing labour man to extend credits to agotient costs as they small industries which do not need to control they regard as carrying every phase of produc high risks. tion by themselves; im Small-scale industri- proving the quality of allots are aleo subject to their products as sub double taxation, having contractors can carry to pay tax at every out quality control more phase of production. In closely. investors' opinion, small industries are not 0 Improve the laws so attractive as anyone concerned, including .with just a small those on taxes, and pass amount of investment laws to protect small can set up business industries. freely. 0 Set up a "Small- The study recom- Scale Industries' Reha mended .the following bilitation Fund" with measures for the Gov- the money being con eminent to strengthen tributed by financial small-scale industries: institutions and the U Promote the stab- Government to help lishment of a "Small- small industries in Scale Industries Associ- financial troubles. ation" as adviser to 0 Set up a "Training 96 small industries, a in Small e Indus centre of information tries Institution" to vital to them, a forum spread knowledge about where they can ex- small-scale industries. RoT grants privileg( Six , . ~prjects. win.o ct ect. to 15~~approval textile F
THE Board of Investment (BoIl yester- THE Board of Investment day approved promotional privileges (Bol) yesterday approved for 15 textile projects out of Q total 31 promoto privil'ges Bopi s "nod aix projects with com.. applcations. fiv bined investments of .r e The remaining 16 Co (50 machines)ani milon BOI ts applications will be con- Factories which v eer employment opreortuni. sidered next Tuesday by granted privileges for ties for 2,231 persons. rvileus the Bol subcommittee both spinning and project The projects belong to: . .., General Chiraerl7Panu- tanaevnKnittingeeJa (109,184 a-0Oina of J2 n Co, to invest 67.6 otaermmillion foamdb s pong. spindles and 1,000 THE Boardt baht to produce 1.2 mil- fT r4 fi s yetray approvd lion pairs of sports shoes THE badoflnvestirent It is expected that all weaving machines), promotional privileges for a year for 80% export. rejected applications by applications will be ap- Kangwarn Weavrig Co five projects with a com- The 14% Thai-owned and four Investors seeking proved if they meet all (45,144 spindles and bined investment of 401 Tles for reqirements. 500 w machines), million baht and employ- 86% Taiwanese-owned promotin piisleeo Accouirmnto a 0 weaving m , ment opportunities for 5 project will employ 394 phone exck&nge switching According to a BoI Ronachai Tamrongvora- pe persons and bring in 125 equipment, a Bol source source, if all 31 applica- porn (53,480 spindles The details of the million baht in foreign. said. tions ars approved, the and 100 weaving ma- projects are. exchange a year. The four applications In textile industry will chines), Saha Union volve a total investment of have an additional Textile Co (19,728 spin- Far East Textile I Snswat Cloth 1,166.3 million baht and illondut o wdin Tevest7 Printing Industry Co, to would create job oppor 813,056 spindles for dies ard 100 weaving inb t to produce invest 36.9 million baht' tunldesfor ,938people. r yarn spinning and 8,396 machines), T' Indus- 540,000 kg of dyed cloth t The Ericsson Co Ltd, machines for fabric try Promotion Factory per year for 100% export, to produce 840,000 yarden- weaving. Co (30,000 spindki3 and The wholly Thai-owned of printed silk cloth a ture, plans to invest 85.5 e . 600 weaving machines), project will employ 64 per- year. The 'wholly Thai. million baht to manufac pve sons and is expected to owned project will em- ture public telephone ex Thai Durable Textile Co bring In 72 million baht In ploy 289 person. change switching equip granted yesterday cover (20,180 spindles and foreign exchange per year. meat for 100,000 lines a 570,000 spindles an 250 weaving machineb) U Praves Boonsinsuk, year. 2,550 fabric wean a Thai Cloth Dyeing & to invest 240 million baht 0 ITT Corporation Ltd, mn and K Cotton & Gauge Printing Co (1980) will in. to produce '20 million a Thai-US joint venture, machines. Co (30,240 spindles and vest 109 m~llion baht to a plans to Invest 141.0 mi The yarn spinning 100 weaving machines). produce 30 million yards cloth projects approved were The source said all of dyed cloth per year for year for 80% export. The lion baht to manufacture Th Melon Textile The project i wholly Thai-owned public telephone exchange spienilessuccmesft applicants 93% 'Thai and 7%Taiwa- project will employ 397 switching equipment for (113,- spindles), must meet BoI's condi- nee. It will employ 178 persons. 105,800 lines and mi Canada-based Domin- tions which include set- persous and bring 108 mll- crowave radio equipment partner- ting up a bonded ware- lion baht in foreign ex. U Nam Chonsipan for 6,000 lines ayear. shipion Textilewith in Bangkok house and all output, change peryear. to invest 31.5 milion * CIT Alcatel Co Ltd, a W ing ills Cangko whehe, Changeel yn b to pruest Franco-Thal joint venture, Weaving Mills CO whether yar or fabric, N Yukkee Cloth Dyeing baht to produce 900 tons plans to invest 459 million (48,000 spindles), must be totally for ex- Ca will invest 112 million 9 valva-type.pla*45 dP, baht to n~anufacture pub Manee Laovoravit port either direct or via baht to produce 24 million a yeai for"100o eart. lie telephone exchange (40,000 spindles), Su- a tradingfiryards of dyed cloth per The wholly Thiiio"nd switching equipment for year for 100% export.. The project will" employ 54 100,000 lines. chart Rangnoktai (5,000 in 32 6 AT&T Co Ltd a Thai- spindles), Indothai Syn- A major requiremeit project is 5% Thai and persons and- bring thetic Co (10,296 spin-' also stipulated a bank 45%Taiwane e. It will em- million baht in foreign US joint venture, plans to ploy 197 person. and bring invest 480 million baht to dies), Singio Tangsu- guarantee of 200 baht e1milnfor- manufacture public tele charitpan (24,600 spin- per spindle and 6,000 eignexchange peryear. U Pasit Assamongkol, phone exeihangeswitching dg bahtper weaving ma- , aequipmeut for 150,000 ules) and Nan Ya ea s1 Safol (Thailand, Co to invest 55 million baht lines, cellular telephone Weaving Industry Co chine. After two years, will Invest 50 lmon baht to produce 480,000 kg of equipment for 5,000 sets (30,000 spindles), if no satisfactory per- to produce 225 million artificial flowers qnd and private telephone ox formance is shown, then can (two-piece type) per plants a year for 100% . change owitching equip the full amount in the year. The project is 52% xport. The project, 61%- mentforl6,000 line, ingOnly -roject one fabric weav- bank guarantee will be Thai and 48% Austraillan owned by Thais and 49%- was ~ band British and will o n e proved, Century Textile confiscated, ploy 21 persons. :owned by Hong Kong investors, will employ SRoyal Can Industry . 992 persons and bring in Co will Invest 57 million 63 million baht in foreign baht to produce 90 million exchange a year. cans (two-piece type) per excan year. The project Is76 Bangpo Hospital 97 Thai and 24% Talwanes. Co, to invest 60 million It will employ 75 persons. baht to build an 80-bed wholly bahtand generatein foreign 13iexhange million Thai-ownedhospital. The project will peryeer. employ.105 persons. Ministry to enforce 54% Ministry supports local content compressor rle on July.1 production THE I-ustry Ministry .rThe-urce. saidd- ' sider a t has recommended to the Inustry Ministry iah "vrage sise of sleel. a t oi P.ard of Investment that will,e an ve level. AIDC willneed itintroduce the manufac enforce its requirement about 35-37% in car between six to 12 ture of rotary-type for all 12 auto assem- prices due to the rise in months to consider if compressors for air-condi blers in Thailand to use the yen and deutch- the local content re- tioners on ita promotional a minimum of 54%local emark, car sales in the quirement should stop list because of increased content for locally- first six months of this at that level,".the sou'ros domestic demand, a sn assembled passenger year have been satisfac-' said. ior ministry official told cars. tory due to abetter e- He said AIDC will the Business Post at the According to a source -nomic situation. have to observe develop- weekend. in the Industry Minis- However, top aute menta in the industry The official said the try, the ministry will no. induArialists attributed after all assemblers iistry docided to make longer extend the dead-: the exceptional increase begin to comply with the recommendation of line to enforce the new in car sales to panic the 54% level in order to particular the rotary requirement which was buying in order to beat review the whole situa- type, after a'study of the supposed to be enforced future price rises, not- tion, noting that the domestic situation au ofJanuary 1.: .-.... ing that car sales will. matter is complicated as showed there was a de The ministry decided most like'y drop in the the Government mand for these types of to extended the deadline second half ofthe year. through the Industry compressors and, as they r until the end of June In regard to AIDC's Ministry has a policy to are not being produced after 10 out of 12 assem- policy concerning the promote and improve locally, the number of im. blers were unable to increase in local con- the standard of local ports is on the increase. meet the January dead-: tent, the source said- content production. He said 84,980 air line and requested more that further increases in To achieve its goal conditiouer compressors time. I the local content re- AIDC is forced to re- were registered as being "Only assemblers of quirement would auto- quire assemblers to use imported in 1986 and this BMWs and Hondas matically increase the higher percentages of number was expected to were able to meet the cost ofpassenger cars. local content, he ex- ri.,eto i00,000 units in requirement. With the! According to a joint plained. lg90, mainly made up of six month extension surveys u v y conductedc n u t d byb theh Meanwhilee n h l n i -c Importsinom pr e s ofs rthes . rotary type other assemblers should Industry Ministry and formed source in the he production of be able to meet the 54% betatassemblers,.it ale o 1%incraseinmet hewas 5%found autohatmanyprolem industry stated inrotary type compressors local content require- that a 1% increase in that many problems in would have to meet local ment," the source said. the local content re- the industry could be content requirements at quirement would push avoided if AIDC is coa- the rate of 60% for the SALES up the price of cars by sistent in its require- first year of production an average of 1,760 baht ments and regulations. and r~zing to 80% when The 54% local content each. "Though the ministry production reached the requirement will only As the AIJC in- wil have to obey the fourth year. be enforced in the. creased the local con. Government's policy, it Moreover, the ministry, assembling of passenger tent percentage require- should be aware that noted that the provision cars while the require- ment over the past few many. factors have ef Bol privileges for the, ment for pick-up trucks years, auto assemblers changed over the years production ofcompressors, 'lremain unchanged have constantly warned and any policy enforced o air-conditioners would atbetween 40-50%. Meawhie,agAIC wold that heoonreahthe percent-uto is soulhould b2forthebenfit1980b for the benit not runmiisnalcounter regula-to the Meanwhile,the Auto- age would on reach its of the public and not the tion banning the e.tab-. mobile Industry Ievel- optimu level.s Government or opment Commisee one par- lishment and expe'iion ex w lThey (assemblers) ticular group of people," of compressor facwries. pects sales ofpassengers would like the local con- he said. because this only affected: cars this year to in- tent iequirement tostay, • The AIDC has for the the . production of crease by 1G% or 21,000-. at 54% which they con-. past few years been compreviors for refrigemra 23,000 units, compared most well-known for its tors, fri ezers and water! to last year. protecticns given to cooler T,nita. ocal content, manufa The effective pehiod.of. turers. the-- tia-Vf-at. t1iiid7oftis year.
98 ITD drafts four bills to increase efficiency
THE Internal Trat. De- whilo the other three bills tral committee, while the tion. In the past, interpre partment isdrafting four will be submittid to Par- ITD director-general, tations had to be made In bills to amend existing liament late this year. who is the committee's these unclear clauses, 'laws so as to increase the According to Mr secretary, has no power thus causing delays !n. department's efficiency Prayoon, the first bill i" at all. i causes delays decisions and operations, as well as provi le more divided into two parts in certain casee when ir- he added. fal.uiur to consumers and price fixing and anti- mediate actions are re- As for the anti-mono morejustice tc producers. mon poly. For price fix- quired, such as when poly part, Mr Prayoon ITD director-general ing, he said the bill would prices are increased or spid cear definitions are Prayoon Thelerngari said give more power to the decreased unreasonably needed to pinpoint what the bills are amendments central committee to fix or producers form a cartel type of actions are consid t .thePrice-Fixnga selling and buying prices to dump products on the ered monopolistic, noting Anti-Mono oly Actt e of products, as we I as to market, be said. that the ITD chief is Chamber o Commerce m treg s and empowered to make the "o and Tradekap~ n im~eaton m esomo lasplans re-e POWER final deciior on the Act the Ware ouse rding production and issue. andlT_ Ag -uiiiU distribution. However, he pointed MariMrtPrrangiisaid the ou n-dntMd en bi w out that monopulyfrom the cases act K .a ~-iHedaid thereha are more poweriexempt to the when local producers -'The first bill is ex- several loopholes in the chief to immediately form a group for interna pected to be submitted to existing law which has tackle urgent problems. tiona trading purposes Commerce Minister Mon- been enforced since 1979. Howevei proes tioutcauing tri Pongpanich for consid- At present, all dec;- However,ifproducers am without causing any ad e ,tion next month, sions reut with the can- ntake bytheci-D verse impact on local alone taken by the ITD trading or farmers. chief, they can submit a Nevertheless, such petition to the central exemptions have to be ap committee, he noted. proved by the central The second weakness, committee. he said, involves the For the second bill, the penalty clause in the Chamber of Commerce existing low. The depart- and Trade Association met considers that in Act, Mr Prayoon said certain cases, which are ches would harL to not too severe. violators comply with the bill on sh-id face only fines and the Boerd of LIdstries, not imprisonment as cur- being drafted jointly by rantly specified. He said' the Association of Thai that any penalty should Industries and the Indus come under the conjider- try Ministry. ation ofthe ITD chief. Regarding the amend Thirdly, several un- ment to the Warehouse clear and ambiguous Act, he said there is no clauses in the existing law on warehouse busi law need to be clarified to nesses except for the enable all parties con- Revolutionary Order. He earned to continue their noted that the amend work without interrup- ment, bill would encour: age construion of agri cultur' warehouses so as to help farmers. He went oa to say that the last bill, the amend ment to the Agricultural Market Arrangement Act, would clearly outline the responsibilities bf the central market's opera tors and standards of buy ing and selling. The departmeat chief said the amendment to gb~her with the regula tions in the central mar k t would enable opera 99 to% to seek low interest loans from commercial banks. 'With the excep tion cf fishery business law, there is no direct law governing the marketing of agricultural products. No decision in talk, on major steel plan THE firs ro f talks between the Indus, Itry Ministry and major steel producers on the long-discussed integrated oteel project ended incanclusIvely yesterday. The meeting, attended He said it could not yet by Deputy Industry be decided how the coun- Minister Korn Dhab- try should develop the barangsi and representa- project- whether to set tives of Siam Iron &Steel up a coh .r hot rolling ICo, Bongkok Steel Indus- mill - because the in try Co, Siam Steel Syndi. vestment cost invlved cate Co, Siam Steel Co, has not been identified. Nakhorn Thai Steel Mill But the country still Co and chairman of the has a chance to set up Association of Thai either type of mill as Industries' Iron rnd Steel Japanese and Korean Club and held by the steel producers are now 1ministry, was aimed to faced with high produc sound out the producers tion cost problems. BANGKOK POST opinions on the possibil- Mr Korn also said the ity of the country iaunch- current steel consump ing the massive invest-, tion of about 1 million mentproject h tons a year justified in. Finai.e He noted,' whenever-a Mr Kor said the meet- vestment in either cold or commercial bank had any ing agreed that the size of hot rolling mill. problem and wss faced he project should be He said the investment with collapse, the Gov. scaleddown'to "backward cost of a mill with an ,erment would step in integration" to suit the annual capacity of 1 mil-need immediately to help it. current economic condi- lion tons, estimated at as Me Government will tion. ' hi has 20,000 million inever let a bank 1 Back integration in- bat, was excessive and under," he added. volv'es starting the beyond the produceris' ,.4-) But when a finance project somewhere up- capability to handle. Government does hsdCompany was in trouble, stream not at the raw But the trouble- not make equ .:ystrong would be lenent, material stage. plagued steel mills in efforts in solving the would be less kee Qn Japan and Korea have problems of finance helping it. offered to relocate their companies and commer plRn01wffTl=1Wql-Ma- I cial banks, according to He also said the Gov "ifig-i ibe-fTo7 T- i Sa-vgob Punnarugsa, ernment should be less land to have a steel mill resident of Sa.ngob & keen on extending soft because the old facilities Wanna Co. loan to commercial would help reduce the in- Mr Sa-ngob, a former bankb in trouble because vestment cost for setting International Trust & Fi- in doing so the Govern. up a steel mill. nance Co (lTF) president, ment would suffer inter wes rpeaking at a samn- est rate diffevential nar on "Business Failure losses. and Turnaround Strate- He added that as this gies" crgarised by issue had become a polti Thammasat University's c one, he did not want to Commorce and Account- touch on it any further. ancy Faculty and Thai language mTansettakit Regarding the ITF's weekly at the university. construction of a con. He said finance corna- dominium, Mr Sa-ngob nieL and commercial said he was still against banks had to make con-.! it because "ITF'W liquidity tributions to the Fund for decreased sharply and Rehabilitation and immediately, up to the Development of Finan- ,tune of hundred millionr cial Institutes at the of baht. • same rate, 01%of their He also claimed that. total deposits, which he during his presidency at termed an "indirect tax TF, he had done many 100 or insurance premium." things beneficial to ITF. depositors and the general public. Dusit Thani asks to put t TAT for Khao books in order Y rights Toui-tn t, tho source said, THE Cabinet yesterday clear unsettled accounts Group is seeking to opr- w6u rather have the in the provinces ate the Tourim Autor- pro be owned by a ordered the Marketing at banks TAT Orgnisation for Farmers and expenditure docu- it of Thailand's Khao p rate investor, to speed up the account- ments of the 1984 fiscal Yi Resort. ahd the Royal Forest Do- ing of fiscal year 1984 ai year by the end of this According to a higil'partment. proposed by Lhe Auditor- fiscal year in September, -ranking official, mansk- However, if TAT d6 General's Office, Depuy settle incomplete debit ing director-of-thr group cides to let Dusit Thani and put remain- Mrs Chanut Piyaoui re- Group run the resort Agriculture Minister Su- accounts ap thep Thueksubaa said ing cargo stocks and cently proposed that the alone, it must ceek yesterday. assets in proper control company operate the proval from the board of The ministry was told lists for certifying. Khao Yai Resort on .an directors. by the Cabinet to order' l Individual basis. The concession for a 1 the MOF to clear up its The MOF will also be n' e source said the priva'- flim-t6operate" finantial expendituiroe told 'to finalise its ac- intL. :st shown by the "Khao Ya kesort came after the auditior-general counts and 'make details Dusit Thani Hotel Group aai7T---AT' co0-rat financial expenditure was surprising since the -la-t6 privati3e some of complained of unfinished of F5ort a a iu-"yb accountiig procedures. and related financial ac- group had earlier said it lU The Auditor-General's tivities from fiscal 1984 was interested in invest- tW'-Naiii Institte or Office asked the MOF to. up to now for the Auditor- ing in the project, yet Development Adminis General'a Office. offered no tender during tration (NIDA). Mr Suthep said the TATs two biddings last The NIDA study ministry informed the year. pointed out that although Cabinet yesterday about The firm's condition on 1he resort was still the intervention in.the running the resort with- profitable, declining maize market where tha out a partner is against profits and a shortage of MOF was allocated a 200 regulations laid b) the development funds would million baht loan from board ofdirectors ofTAT. soon cause TAT to face the Farmers' Welfar, But since no interest loses. Fund to buy maize from was shown in the project Khao Yai Resort is in farmers suffering from during the past two bid- the area of Khao Yai Na low rices, dings. TAT is now consid. tional Park, which is He said the MOF had ering Vhe group's under the responsibility I *bought 72,517 tons of proposal. of the Royal Fore De.' -maize worth 145 million partment. baht which was counter- TAT received the right traded for 37,676 tons of Vt reAetherurtfrom 16-16-8 formula fertiliser a speial worth 154 million baht. proval more than 10 The Cabinet also years ago without the agreed in principle to the specific size of land men ministry's request to set tioned in the approval. up cro extension The ucertainty of the worthcentre 92.3in millionPSukhothai baht. tionalsize of parkland resultedon the na.in private investors being unable to draw up de tailed projects, conse quently, no proposals .were offered during the two bidding annouced last year. The Dusit T ,ani itslf plans to further expand as Mrs Chanut said earlier that the group was looking for an oppor tunity to invest in a few more projects over the next few years. The plan to boost in vestment follows the 101 group's outstanding sue cess in hotel business at its properties, which in. cludes the Dvsit Thani in Bangkok, the Dusit Inn in Chiang Mai and the Dusit Laguna in Phuket.. Fate of NEC .,raplocagroupS tto project remains pa uncertain ask Govt to relax THE fate of a massive investment by the National Fertilizer Cor) Ltd remains uncertain etMe lack of progss in the project to build a chemical fertilizer complex. Moreover, Finance Minister Suthee Singhasaneh said at the b9/ weekend that the land at Mab Ta Put should be /FOUR associations in Under the plan, the sion chairman. used to complement the development of Laem the tapioca production four asociations hop Dur th eetng, Chabang. industry will for the the Government WIlTn the akedm ete The minister told 'Ahe Nation that the project first tims jointly ask the able to relbx thc mini- Government to provide. is still imueded by two major factors - the sharp Government to relax mum electxicity charge assistance to the tapioca Japanese yen's appreciation and worldwide low the Elhetricity Generat- from one montha 'year pellet industry which prices for fertilizer. ing Authority of Thai- to four months, particu- has been affected 'by: The corporation plans to build the complex at lard'e minimum de- larly as most tapioca EGATs litting of Mab Ta Put on the Eastern Seaboard but the mand charge on elec- products production exemptions on demand final contract signing with contractor Chiyoda tricity for tapioca prod- usually only lasts six- charges altogether. Chemi-al Engineering and Construction has ucts prOducers seven months a year. The tapioca pellet beenTe delayed.meray ed s According to an He said the four as, industry, with an industry source, the sociations had each annual capacity of formed to closely guide and monitor the project. four associations are the made Recently Chiyoda individual re- about 10 million tons asked NFC to seek through Thai Tapioca Trade As- quests to the Govern- was exempt fr3m EGAT the Thai government a grant of US$80 million sociation, Thai Tapioca ment on different from the Jaanese government occa- charge!s between 1985 to offset the high Flour Industries Trade sions, but had not re- and !986, but in 1937 yen value. Association, the North- ceived any When positive re- the exemption was the project was decided, the exchane eastern Tapioca Trade sponse. llfte Associaion end the "They hope th, Joint The source said those rate was at 240 yen per dollar making tn Eastern Tapioca Trade request, will strengthen in the tapioca products project feasible when there was also a soft loan Asciation. their stand," he said. industry would like to from the Overseas Economic Cooperation Fund He said top execu- The sour.e cited a re- enjoy the same privi of Japan. tives ftom the four as- cent case when TUFA leges as the sugar refin The high yen value since has made the project sociations were ex- president "ukit Wan- ery industry which Is more difficult. Chiyoda asked for a Lxed rate of pected to meet this glee lcd association exempt from paying the ezchange for the yen as it will also provide Thursday to discuss the members in a meeting minimum demand financing. NFC wanted a range of 200-220 yen matter in more detail so with Deputy Prime charges. while Chiyoda proposed 160 yen, slightly less they can determine the Minister Bhichai Ratta- Mr Bhichai urged the t.an 'e 140-145 at which the yen floats r~w. -most appropriate proce- kul in his capacity as association to wait for Dr Suthee said that the supervisory committee dure in making their National Electricity the new electricity bill. hae not scheduled the next meeting tacluse the request. Energy Policy Comnis- structure. problems were clear. NFC has turned tj importing fertilizer for distribution to farmers. G limit He disclosed that the ministry was studving to see how the site of the NFC complex should be used for other purposes to complement the import development of Laem Chabang. The government has delayed the development of Mab Ta Put, where a deep-sea port was of engines planned due to fiscal constraints. Instead, there will be development at Laem Chabang, such as THE Commerce Ministry the coastruction of a sea port and an industrial yesterday announced estate to serve as export processing zone. that all imports of motor The silence on the part of the supervisory cyle engines with a ca. committee indicates that the multi-million baht pacity la than 250 cc p oject will face further delay. The NFC Board of will have to get pr'or ap Directors submitted a plan to alleviate the provalThe announcementfrom the ministry. fol high-yen problem to the committee two weeks lows the Cabinet's ap ago but there was no progress on the issue. p.e- l of 04h7eitiinein Unless Chiyoda accepts an exchange rate at atitsweeKly meetffn wt '200 per dollar as sought by NFC, the pivject will - offer an infeasible rate of returni on investment -The'' requirement, at lower than 10 per cent. which became effective yesterday, was signed by Commerce Minister Mon tri Pongpanich on June 4. The ministerial an. nouncement stated that the requirement for prior approval is aimed at pro tecting the local produc tion of motorcycle en gines after the Govern 102 ment, through the Board of Investment, has nro .vided promotional privi leges to this indu try. Dairy farm body seeks approval to raise produc'tion -606 Dairy group THE Dairy Farming Promotion Organisation (DFPO) is seeking Government approval to invest about 20 million baht to expend the production capacity of its UHT mik by 20% from the current 105 tons per day. s k DFPO managing decide whether to buy dozen pack of 250co director Chalermchai. or lease new machines milk cartons, while Lekchom said he was to expand production today they pay orly 61 o lobbying the National or simply maintain the bahtdozen. "As forthe allegation Economic and Social present level of supply, The fierce cumpeti- THE Dairy Farming that some farmea Development Board, bearing in mind that tion has not hurt Promotion Organisa- group have taken side Agricultural Ministry once the 20 million producers because tion (DFPO) has asked with Foremost, I believe and the Cabinet to aP- Laht has been spent on market supply is still the Agricultural Minis- it is because the prove the budget. expanding the UHT less than demcnd. For try to solve the problem company han misled The 20 million baht production capacity, example, Thai-Danish caused by the Foremost them, and some govern will be used to buy two l.ss funds will be Dairy Farms' produc- (Thailand) Co setting ment officials from the milk packaging ma- availablechi n es~~~C to expand tion of 250cc UHT up provincialfrf rmromoPira buying ptionnreml Cooperativesop r ti e Promotion chines from Tetra Pik pasteurised milk milk cartons lap 10% whichcentres l~ave for taken~raw awaymilk alsoDepartment privately(CPD)supporehav, ofSweden, he said. production. behind demand even DFPO's originalauppli- Foremost," he said. "Our sales agent, though its factory is e rs. Inter-Magnum Co, is running 24 hours/day, Aecordin DFPO complaining that its DEMAND he said. director 8halrmchai DIFFICULTY market share is Mr Kanok added Lekchqm, the action by shrinking by 1% per that once production month because output Meanwhile, Inter-Ma- capacity was ex- Foremost has seriously asefore thisdifficulty cannot be expanded gnum Co managing panded, his company affected DFPO's target arose, Foremosts eecu aven though a lot of director Kanok Abhi- could begin to pene- earning cohmitment few times to confirm pfforthas been spent radee said the demand trate provincial mar to repay loans froiTi that they had no inten on promotion and mar- for milk had increased keto more fully han Dark worth 258 tion of competing for keting to create de- by 12%-15% due. to a before. million baht. raw milk from oW'on mand," he said. successful promotion Apart from stu- The loans were used nal suppliers. But ths Another problem is campaign. e said he' dents, teengers in to buy machinery and action has indicated that its production of' exmected this trend to general have increased set up raw milk collect otherwise. pasteurised milk has continue inte next their milk consump- mng centres in Nakor# "As for the relation lagged behind demand year. tion by an impressive Ratchasima, Sarabuii shipbetween DFFO and as its six machines can rate due to health and and Lopburi Mr Ch; CPD, there io clealy a only produce 10 to 15 Price competition fitness cone', no. lermchai said . lack of mutual corn tons per day despite between milk produc- Another product He aid Foremost munication which must orders for about 25 ers has stimulated makketed by Inter- should set up its Luyinri be rectified. I,therefore, tons per day. higher demand and Magnum is Lait-Lait centres away from the proposed that the Board However, he said lower prices as four toffee which has been areas developed by of DFPO'or the Govern this was a matter for years ago consumers well accepted by chil- DFPO investment. "For ment must make a the DFPO's board to paid 63-64 baht for a dren, he concluded. ezample, Foremost policy decision concern could set up a buying ing the matter as soon centre in Ayutthaya, aspossible," he insisted. but it won't because it "It was the Govern would involve a high ment in the fi'st place initial investment and that laid"dbwn "the long term results which policy for us to promote 103 it may not Want to wait dairy farming among for," he said. farmers as we.. as guar antee prices," Mr Cha lermchai noted. Ministries to ask for review of soybean policy Commerce and Agriculture Ministries will both ask the Cabinet to reviow its decision,changing the soybean import system which was made to favour the United States. ,Commerce Minister prevent Thailand from Cabinet, recently heM a signed to encourage Montri Pongpanich said losing privileges under meeting to discuss soy- farmers to boost their the import system was the G.neralised System bean marketing and soybean production. changed just to favour ofPreferences. production problems Under the quota sys imports from the United The US request for a where participants ex- tern, importers of soy- States, but &armers change in the soybean pressed strong opposi- bean had to purchace have not benefitted import system was part tion to the Cabinet's local produce at the from the change. of a package, which also decision. ratio of 3:2. On September 16, comprised a demand for The meeting also The system aucce- . 1986 the Cabinet de- amendmnts to copy- asked Deputy A-ric.l- fully boosted soybean cided to change the soy- right and trademark ture Minister Suthep prices which in turn en bean import system laws. Thueksuban to submit couraged farmers to in from a quota system to Mr Montri said that their request to the crease their production. 1ea tariff system. . since the change did not meeting of the Council The Cabinet's deci The change was providewo- any benefit to of Ec-nomic Ministers sion to change over to osed from the Foeign Thai farmers, he will today. the tarriff system, .' Ministry following a re- ask the Cabinet to re- Since Thailaud's which goes into affect e t from the United view its decision. production of soybean is this September, will ta. The Foreign The Agriculture not sufficient to meet allow importers to im *inistry claimed that Ministry, also making a the local de.mand, a port an unlimited te change would help similar request to the quota system was de- amount of soybean, but ______a 6% tariff will be " o.t.. charged.ontr g I, a
PMPSon Vakkasem (Chiang Mai, Rassa-. itsproducts, decided last Sepianmber to revise He said the meeting estimated .the local, dont Party) will toay urge the Government the policy on soybean imports within a year supply of soybean oil from June to August to revise its decision last Septcmber on the by replacing the quota system with a tariff, would e about 10,999 tons, while the soybean import policy and push for ..be system. At the same time, it set up a working mand would be 11,008 tons. continuation of the quota system for the next committee to study the isoue. The small difference in the demand and four-five years. Under the quota system, the Commerce supply figures showed there was no real In his motion to the House of Representa- Ministry required soybean importers to pur- ,hortage and oil producers said they would tives, 1 rSongsuk said the Cabinet decision chase locat produce before import permission meet local demand if the other side could on September 16 will have an adverse affect was given it the ratio of 5:2. produce actual demand figures and con-' on farmers and the country's economy. In addition, Mr Song'uk said he would tracted to purchase that amount, Mr Montri He cited the study of the Ministry of also ask the. Government to negotiate the said. Agriculture and Agricultural Cooperatives' soybean import policy with the United He said soybean oil producers would sign a Working Committee chaired by Deputy States as the Foreign Ministry had ex- supply contract next Tuesday with canned Agriculture Minister Suthep Thueksuban changed the adoption ofthe quota system for fo processors. which called for a revision of the soybern privileges under the Generalised System of The purchasing price has been agreed at! policy decided on by ths Cabinet last Sep. Preferences. 21.80.baht/kio for refined oil, based on 8. tember. Meanwhile, Coinmerce Miniser Montri Qht/kilo of soybeaneds, he said: He sail the working committee had Pongpanich said yesterday that there was no studied the quota system and found it benefi- local shortage of soybean oil. Concerning the September 16 decision, he cial to the country's economy, especially He made the remark following yesterday's said he had assigned the permanent secre farmers. meeting of soybean oil producers, canned tary o"commerce to study the affect on: He said the committee had asked the food processors, soybean impoi ters and farm- farmers. Cabinet to revise its decision twice. ere at the Commerce Ministry to discuss If the change to the tariff system affects The Cabinet, pressured by the US Govern- problems concerning ths reported local farmers, he would ask the Cabinet to revise soybean and shortage. , its earlier decision, he added. ment to liberalise the trading of 104 Cabinet defers .su Dxpor firm decis
THE Cai et yesterday put off its decision on the Industry Ministry's proposal to set up a new sugar export body after strong opposition from certain Cabinet members. The meeting instead more sugar export However, Prime body. The conditions are Furthermore, the asked the Cabinet secro- companies would be al- Minister Prem Tinsula- that they would have to tary, Annt ministry said in its Anantakul, lowed to set up. nonda, who chaired the deliver raw suar to proposal that the estab an the Indutry Minis- Also, the four exist- meeting rejected Mr Thai Cane and Sugar lishment try to jointly reconsider of a new ex. ompaies-'s move as he Crp (TCSC) for export, port bod would be in the proposal and resub- in xp orp wanted to retain the to contribute to the line Wt the Govern. mit it to the Cabinet Thailand Sugar Corpraioslinttagpo.idutysromo nextTuesday. Thai Sugar Trading proposalin the agenda. lion debt repayment and free trade, invetment An informed Cabinet Corp, Thni Cane and Gen Prem then askcd to comply with TCSC and j creation. source said the proposal Sugar Corp and Siam Mr Anant and tho regulatins. Sugar Export Co - Industry Ministry The ministry said to set exprtupradng a fifthompnyweresugar said to be suff- jontly reconside thet r The sourceoi said SITA that if a new export caxport tert c oay cient to handle the matter and resubmit recently asked the company was allowed to sevenseven atugasugar refinuesrefineries fcountry's sugar exports. the proposal for consid- ministry to allow it to stto up,worry it would about not ex}port have affiliated with Wang The fourth sugar export oration at the next set up a new sugar ffipfirmwas proposed by meeting. port company, sayingex Kanai Sugar controls because there Company whichRefinerycome former Industry Minis- The source said the the combined produc- were enough measures under the Sugar Indus- ter Ob Vasuratna and Industry Ministry tion capacity of its mem- to control possible sugar proposal called on the hera was more than smuggling* including try Trade Association approved" by Cabinet. (SITA). Cabinet to review its 100,000 tons of sugar the Cane and Sugar Act According to the ruling to pave the way annually which was in 1984, the regulations of The source said the source, Industry Minis- for the seven sugar line with the previous several government decision was deferred ter Pramual Sabhavasu, refineries attached to Cabinet's ruling, agencies and the because of strong close oppo- who submitted the SITA to set up their own As for marketing, the supervision of the cane sition from certain proposal for Cabinet sugar export company. refineries would be able planters. Cabint members who considerntion, decided to reduce their expenses said the establishment "As other sugar refin later to withdraw tho The ministry requires if they had their own eries have their own of the new company was issue from the agenda the SITA members to export facility as they counter to the sugar export companies, Cabinet's. following strong opposi- meet certain conditions were currently forced to SITA should be qligible ruling in June 1984 tion from certain Cabi- in return for permission use the export facilities which stipulates to have one for the sake that no net members. to set up the export of the existing export of equality and fairness companies. within the same profes- I copne.sion," the proposal was C abinet to- Ms proposal later faced quoted as stating. Hi po p o sal to r faced review ingJsarak Ministe& of the Includ.Prime Minister Office Dr Chlrayu revew uga .Isarangkurs no Ayut. thaya, a former industry 0 minister and an architect inty exort firm sryestthem. questedThe seven permission refineries to sete were adequate sugar trad- up new epit outlet in Sn o eronrde nte cAccording to the rega. THE Cabinet Is expected Prabhks'Chakkapak, yes- to hnnle the existing tion, to reconsider the Industry terdoy considered the mat. nhoal sugarmiler wantng Minlry's proposal to set ltvtotrinn responsers o s to o •C b - Tlsey also reportedly ales -- Thailand Sugar eh ud nontify B andan a Cab- Corp. Thai 8uglkr Trading that will have to be autho up the country's fifth net's decision last Tues- said itthe Cabines ruling Corp, sugar export company Thai Cane and rised by he Cabinet. y.Siam The Cabinet last Tues today an Secretar general to the policy should apply to an, Sugar Export Corp. Sugar Board (CSB) re- day discussed the Indus- Cabinet Anant Anantakul not only to the Wang Industry Minister ty 15try' proposal to ported that the existence was ordered to look into Kanal Group. Pramual Sabhavasu of a new export. firm re- set up a fifth b-port the matter with the Indus- Mr Pramual later de- portedly told the Cabinet company at the request of should depend on the try Ministry before for. cided to withdraw him that the Cabinet's decision. .. formation of a Wang Kanal Sugar warding It to the Cabinet proposal, but Prime Minis. new export company was Company and Itezx affill. A senior ministry offi- again. ter Prem Tinsulanonda in line Govern. cd said that the with the ates,underthe umbrella of CSB, The CSB reportedly objected and instructed ment's policy to promote the newly established chaired by Permanent raised a CSB regulation Mr Anant to look into the Secretary free trade, investment and Sugar Industry Trade As- for Industry Dr considered in Octobr matter. employment. sociation. 18 105 18 InMnMMMOVn.Laf1 ii O, V1.0. lo&coo Bu Cabinet urged to re-view sugar export,decision SUGAR millers have urged the Government to review ruling concerning the recent Cabinet the temporery solution to the country's sugar export Problems, saying the solution will severely jeopardise the management the whole sugar industry in the long run. of The move came in a cerned in order to lay letterjointly 200,000 tons of raw sugar The millers suggested signed by 42 down a new policy and by millers to Thai millers nationwide, Cane that the Government, guidelines governing the and Sugar Corp (TCSC) which was submitted to profit-sharing should abandon the arrange- for export on a temporary temporary solution Prime Minister Gen menta between the and, plant- basis. instead, lay down a long. Prem Tinsulanonda yes- ers and millers, and the terday. TCSC, ajoint operation term plicyi usir the country's sugar exports in of the planters, millers Cane The millers said in general. and Sugar Act 1984 and Government, was set is a basis to implement their letter that the Cabi- The millers noted in up net decision on Tuesday to handle 600,000 tons the profit-sharing system their letter that since the of sugar exports per and should be reviewed and 70 the country's, sugar. :30::farmers:millers annum over the past five export reconsidered in the light policy governing net profit-sharing system years. the of their earlier letter was exports, produon introduced four years The 'nillers said the and marketing. dated May 26 in which ago, the millers had been decision they recommended was incorrect Moreover, a committee the at a disadvantage and and illogical and would way towards a compro- often earned comprising the planters, less than seriously harm the whole millers And government mise between sugarcane their 30% due amount. sugar ndustry. officials concerned farmers and sugar mill- The letter said the sys- should ers. In addition, during the, be set up to fix a standard tem had resulted in period the profit-sharing The letter was quoted heavy price. for sugar exports, losses for the mill- system has been in effect, thus eliminating as telling the Govern. era and some had the need been te sugar exports han- for TCSC. The export ment that it should, at forced to relinquish their died least, by TCSC have cost price under the previous delay the introduc- operations to their credi- the system tion of the Cabinet 25 million practice was a major fac-; ruling tor banks. baht annually in so that further discus- un. tor in working out the: The millers also op- necessary expenses and it sugarcane sions could be held be- posed price duiing the Cabinet ruling has also caused delay3 on . the implementation tween the parties con- concerning the delivery of1 of 'decisions affecting ad- the profit-sharing system vance sales. four years ago.
106 Is 5th sugar export firm needed? I BELIEVE that Cabinet a rating because more in members must h-ave-5 ni vestments mean more taken by surprise during I T! employment and, indi- theirwhen meetingIndustry on TuesdayMinister . . at.•terrda Y VeS rectly,r c:' isanthmore exports,rte Pramual Sabhavasu I the coin to be taken into sought an approval to set I by KawaIjit Singh account as well, particu. anothe uearex or.F f larly in the current situa f tion of growing proteti:o. seven sugar refineries a'. nism in the West. filiated with Wang Kann, Vasuratna yepre ago had when the most urgent Although the banks in- Several Asian wun Sugar Refinery Co. developed into a contro- task facing the Govern- volvAd have agreed to III tries including Taiwan According to my spies versy. ment, particularly the over the principals and have moved their produc. at the Industry Ministry, The then Cabinet main- Industry Ministry is the interests, no conclusion tion facilities to Thailand among these who were bers also strongly op. extension of the 70:30 has been reached yet on a which is now their base of' most surprised were Mr posed this roposal, revenue-sharing system? new agreement. exports to Western coun- Pramual's two deputies claiming that theexist- As I mentioned earlier, Though the Cabinet tries, mainly the US. who were reportedly com- ing three firms -, the the live-year-old system, has approved the Cene I understand that one pletely unaware of the first a tripartite firm set up to stabilise the and Sugar Board's of the reasons for their proposal. owned by the Govern- local sugar industry, will proposal for sugar millers relocating here is that My spies said Mr ment, sugar millers and "expire sometirae this year to temporarily supply it they expect to be able to Pramual was very opti- sugarcane planters and and both sugarcane with 200,000 tons of raw make of the GSP status mistic that his proposal the other two belonging planters and sugar mill- sugar for export - out of given to exports from woulM gain an easy pas- to two sugar mills' associ- era are still locked in ne- the 600,000 tons in quota Thailand to the US and a sage as it was submitted ations - were considered gotiations on different a year under the present few other countries as enjoy at a time when thousands enough to handle the figures of production agreement - that was they can no longer of sugarcane planters in country's sugar exports. costs and revenue-shar- tantamount to yielding to theirsuch countriesa status nobecauselonger Kanchanaburi thren. However, for unknown ing ratios as both parties sugarcane planters' de- thened to stage a protest reasons, the Cabinet al- want to get mximur mand, which averted need a special tariff treat in Bangkok ifthe Cabinet lowed the fourth sugar Lenefits. their planned protest in ment to comikte in im. did not yield to their de- export to be set up and Another stumbling Bangkok, sugar millers porters' markets. mand to temporarily strongly ruled that no block to the ongoing ne. were reportedly unhappy I wouln't have any allow Thai Cane and more similar permission gotiations between sugar- with the decision and objection to theseforeign Sugar Corp (TCSC) to would be given. cane planters and sugar planned to petition the investors ifthey are here -continue exporting My spies noted that millers is the export of Cabinet to review this to produce and export 200,000 tons of raw with strong opposition 600,000 tons of raw sugar decision. sugar. from - several Cabinet under Quota B by TCSC:. I do not know whether something which we van- But things did not turn members, Mr Pramual sugar millers want to Mr Pramual would agree pricewise because it out as Mr Pramual ex- planned to withdraw his handle this export them- with me that the suqar would enable us to have pected as several Cabinet proposal from the agenda. selves, but sugarcane industry is faced with more export items and to members were strongly Again, it's not that easy plantors want TCSC to many urgent issues that maximise the utilisation against the proposal. for my dear Pa Prem, who continue exporting this need immediate attention of the GSP status given Among those questioning chaired the meeting and volume, of and, solution by his by Western countries. Mr Pramual the most on who might also be Sur- Another major problem ministry. I am quite sure that the issue was Minister of prised by the proposal, is the repayment of the Don't you think so, my there are still hundreds of the Prime Minister's Of- put a brake to Mr Pramu- US$78-million syndi- dear minister? items which we cannot fice Dr ChirayuIsarang- al's move. cated loan borrowed from o [ [ produce at competitive kurs, no Ayutthaya, who Instead, Pa Prem in- eight local commercial prices and if these new was once Industry Minis- structed Cabinet Secre- banks by the local sugar I AM happy to see wel- investors can help us on ter and has a thorough tary Anant Anantakul industry. Again to re- come -news reports that this, it would further help knowledge of the sugar and the Industry Minis- mind you, this loan was many foreign investors stimulate the local indus industry. try to jointly review the borrowed about five years are keeping a sharp eye try, increase employment These Cabinet mem- issue and resubmit it to ago when the system was on Thailand as their in- and boost exports. bers very much doubted the Cabinet for considera- set up so as to stabilise vestment place, with On the other hand, if the necessity of setting up tion next Tuesday. the local sugar industry, several of them having these investors are here a fifth sugar export firm, Although Pa Prem's ac- However, when the made their decision on to make those products in addition to the four tion was seen as "saving" first principal sum of the issue. which we are already .already in operation. Mr Pramual's face, my about $23 million was " Part .o'. the credits - producing and take the To remind you, the pro- spies said the big ques- due in September 1985, perhaps all - should go export opportunity from posed formation of the tion hanging over the the industry could not to the Board of Invest- Thais, I think we should fourth sugar export firm, issue was whether it was repay it and has not been ment and other govern- reconsider our foreign in Siam Sugar Export Co - really necessary to have a able to do so until today ment agencies concerned vestment promotion after TCSC, Thailand fifth sugar export firm. because the industry has in promoting the coun- policy. I strongly believe Sugar Corp, Thai Sugar Moreover, why did Mr been hard hit by de- try's investment abroad. that vwi shi i Io Il Trading Corp - by for- Pramual seek Cabinet pressed world sugar Although such reports "-' ners to reap p'fih mer Industry Minister Ob approval on the issue prices. I are exciting and invigo- .at our expense.
107 28 ui onlyidi irni YIio nRII.0. iacoo Business Po Govt body gives nod to proposals on counitertrade
M National Countertrade Co two months ago, were fully leaves, gunny bags, maize, information with the Associa. Sub-committee yesterday ap- supported by the Belgian Gov- garments, fluorite and barite tion of Thai Industries regard proved a number of counter- ernment. from Thailand. ing the state.owned Telephone trade proposals including two He said the Belgian firm He said the meeting agreed Organisati~i-i"--Tliilidd' from a Belgian firm to set up. proposed to set up an ammuni- that such a purchase would r-op lI--biiy -'- Bi ilian .n an nitio'n-ac-ry and to tion factory worth.some 1,600 have to be in line with PT1's g-i'itors through Metro Ma -6iihif- ility-adios-f6-F million baht here, part of* regulations on oil imports and chini Co,'to fulfil Thailand's .Iaiagricultura products. whose production would be comply wil'i the Commercial countertrade -- co1iiihitmient The approval paves the way bought back by it for export to Registra.kua Department's oil with this South American for further negoiations be- third countries. It also pro- import plans. The approval country. tween Thai government agen- posed to sell HF/SSB military would enable PfP to start ne- The TOT proposal was cies concerned and their for- radios worth about 360 million gotiations with Cargill on the strongly opposed to by ATI eign counterparts. baht, he added. issue. "Whiih asked the- Government ! Business Economics Depart- Mr Somphol said the Belgian He also noted that this ap- to review its plan on the nent Director-General Som- firm would exchange its prod- proval was based on the ground that such a purchase hol Kiatphaiboon, also the ucts for whatever industrial or ground that it wanted to speed would affect the local industry hub-committee's secretary, agricultural products to be pro- up agricultural exports no which can already produce 'aid the decision was made at. posed by the Thai side. matter where Cargill would some generator parts. reterday's meeting of the sub- He also said many rounds of sell th'. products, even in Thai mmittee, chaired by Com- talks were held during the past land's traditional 7- markethat the Highways Depart merce Minister Montri Pong - two months at various levels, Mr Somphol said the meet- ing would also ask the Defence ment and the Communications panich. including ambassador, mili- Mnt to.consider.a...... Authoritymen ofThailand also pro The meeting, held at the tary attaches and company Koreanropcosa .th.geposed to the sub-committee Commerce Ministry, was also representatives. _-. - . He noted that as the Belgian equiPmen. *itlTha . . .that they be permitted to bu ttended by officials of gove m. directly in- hrouage machinei-r er lnt agencies concerned, in- volved the Defence Ministry, it The.Korean firm involved - s taru Prapassg Deputy FoeignLixnpabandhu,"Minis- would be passed on to the also proposed to exchange use. DeputyupachaiFinance Pai-pkiMinister Dr ministrytion. ..-.for further"t~Tp considera- chemical products,-fertilisers wit-ibut--thisT planslaThe toHighways call a biddingDepartment to buy Panitchpakdi, proposal was rejected by the 454 units of 65 CFM screw Deputy Communications. Mr Somphol added that the Agriculture Ministry which type, including a concrete Minister Lt-Col Sanan Kha- meeting also aproved Cargill stated that there were already breaker equipment, worth 68.1 phqrnjirasart, the Bank of Co' roposal to sell- ar- sufficient fertiliser stocks at million baht, while CAT plans TFhailand and the Agriculture . rie of high-seed di5e ila present, he added. to call a bidding for the con and Defence ministries. ' V jih etri-U Auli'th. Another decision made by struction of a communications I Mr Somphol said the Belgian ity lof iJaniF_rt or one the sub-committee were for Mr station and installation of firm's proposals, submitted by year; in return, the firm would Somphol, as the sub-commit- related facilities worth 163 .C. Tylee of Trading Services buy green beans. , tobacco tee's secretary, to cross-check million baht.
108 Van Hool warns of threat to Thai, & textile shipments A Van Hool Corp official tor Jef School made the yesterday urged the Gov- statement during his ernment to reconsider its meeting with Deputy propsal to lease 300 Communications Minis art cuated buses t tre Suraphan Chin Bhk--i-i m ' -- it" nawatr yesterday. Authoit, a it-i6f He was quoted as say 3,316 million baht, saying ing that the Cabinet failure to give the con. 'rejection ofthe coiAixyT" tract to the company IPf6mTt5 ff -- 12 might affect Thailand a caused damage to Van texti -b -Fthe Hool which had worked E__ipeian ComUintity.- on the proposal for almost r n firm' as- five years. sistant managing direc. Mr Suraphan quoted Mr School as saying that his company may file a lawsuit against the Gov ernment to seek compen. sation for the damage. The Belgian, however, said his company wants* to settle the matter through negotiations. Belgian Deputy Minis ter of Foreign Trade, Mr Eticnnz Knoops, who will lead a 40-member delega tion for a visit here on June 21-24, is expected to raise the Van Hool proposal with Commerce Minister Montri Pongpa nich and Foreign Minis. ter Siddhi Savetsila, ac cording to the company ooficial. Mr Suraphan, mean while, said the matter was beyond the minis tr's responsibility. He added the Com munications Ministry would reconsider the issue with the National Economic and Social Development Board only if it was requested by Commerce and Foreign ministries.
109 Ministries plan meetings Soybean :meeting on soybean\ problems y,, opts for
THE Commerce and Agriculture The source said the meeting quotas Ministries will meet separately was expected to consider three to discus the problems concern- major itsues including the Cabi- A MEETING on soybean ing the shortage of soybean meal net decision on September 16, imports among produc and oil and the move to replace 1986 regarding the soybean im- era, buyers and officials the existing quota system with a port policy. has initially agreed on tariffsystem. quota rather than a tax An informed source said the Under the Cabinet decision, system, Deputy Agricul first meeting was scheduled for the Commerce Ministry will ture Minister Suthep today at the Agriculture Minis- within a year replace the quota Thueksuban said yester try and would involve a working system on the import of soybean day. committee considering the prob- and its meal with a tariff system. He said the ministrys lem of full cyclingof soybean. This is in compliance with the promotion on soybean The meeting will be chaired by US Government call for Thailand growing was a success as Deputy Agriculture Minister Su- to open its market for U8 crops. the pace now is seven The mecting will also discuss the gr are ros thep Thueksuban. growing area rose The committee comprised 20 suitable systems for importing the soybean products including meal lion rai. representatives from various and oil. government agencies and the pri- vate sector involved with soy-. The third issue for discussion Mr Suthep said the bean. is the possibility of.the Public Government had re bean. p- quired soybean impor~ters Warehouse Organisation import- to buy the same amount sedited by Theh Chongkhadikifor The Po ing soybean products by itself for ofthe local produce. further distribution, or for the Production per.rai also organisation to jointly set up a rose from 150 to 300 kg. central import.company with the This was due to the Gov. private sdctor and planters. ernment spending 30'mil lion baht to provide good Another meeting, scheduled seedlings on a barter for June 16, will be called by basis and counsel to Commerce Minister Montri farmers. Pongpanich to disiuss the local though total production shortage of soybean meal and oil .had increased to 350,000 with representatives from the tons from 150,000 tons a. soybean crushing and refining year, it still lagged be. mills. hind domestic demand of The meeting is expected to 600,000 tons. The rest sound out opinions among the had to be imported. operators regarding the US call The Government, he for Thailand to adopt the tariff said, aimed to catchup system instead of the existing with soybean production, quota system. but had to allow imports in the meantime. randOwner;. Office: 3rdJfoor, U.Ow Thailand had agreed with the US to replace the import quota system with the tax system this .September. Mr Suthep said the price of imported soybean of 5-6 haht a kilo was so low that it did not encour age local growing of the produce. Tax on imports was set at 5-6 per cent. Several alternatives were given at the meet ing of ministry officials producers, animal feed manufacturers, soybean oil makers and importers but none were accepted. 110 Pulp body asks Call for clearer Govt for support policyonpulp THpli Thn Pullp.nd adcapacity o' 27,00 tons/ 13% from 144,200 tons to SIAM Pulp& Paper Co sufficient raw. materials. Industry Association wil year, using about20 162,600 tons, and produc- has urged the Govern. The input needed in ask the Government to ton bamboo, kenal tion increased 24% frm ment to clarify its promo- eludes eucalyptus, sugar support the planting of and eucalyptus per year 106,900 tons to 132,900 tional policy on fast- cane waste and similar, fast growing trees to be and Siam Pulp Co Ltd tons. growing trees so that the products. used as raw material in with a capacity of 20,000 He said pulp imports private sector can make "I would like to see the making pulp because a tons/year, using about increased 15% appropriate long-term1rrmGovernment providing pulp shortage is expected 200,000 tons of sugar 19,200 tons to 21,900 tons plans. land to cultivate fast- if demand continues to cane waste a year. while paperimports went Siam Pulp deputy growing trees. On top of expand. He said if Siam Pulp up only 2% from 43,800 managing director Sing that, there must also be Association president increases its production tons to 44,700 tone. Tangtatawas criticised sufficient measures to Mr Chamnarn Sunthorn- in the next two years to the Government s policy protect investorn," wattana said yesterday satisfy the expected in- yesterday, saying it did Reforestation is good that there are two pulp crease in demand esti- INCREASE not specify the form for the country because it making factories in Thai- mated at about 8-9% a promotions would take. creates employment, he land - Phoenix Pulp & year. a shortage will re- As a result, only small- said. Thus, the Govern.' Paper Company Ltd with suit. Regarding future scale cultivators (50-100 ment should make every Siam Pulp is now in prices of. imported pulp rai) were active ii this ,ffort to secure land for contact with the Ministry and paper, he said the field, he added. allocation to private of Agricultuie and Agri' price of unbleached pulp He asked how the Gov- investors who could use it cultural Cooperatives to should increase about ernment would assist for this purpose, he locate enough land (about 43% from $293/ton to larger-scale projects. added. 100,000 rai) to plant fast $420/ton, and bleached "As far as eucalyptus is Siam Pulp now pro growing trees on. The pulp should increase 30% concerned, rumour has it duces 2,000 tons of short company will have to from $430 to $550/ton. that these trees are an fibre p~ulp per month from undertake a feasibility Paper prices on average, environmental threat, sugarcane waste. This study and ask the Gov- he said should increase but has anybody arrived output is sold to paper eminent to help with the* 15% from $601 to $691/ at the proper conclusion companies affiliated with land and technology of tWn but the newsprint as to what needs to be the Siam Cement Group, planting the trees, he should increase 22% from done about it?" he asked, including Siam 'Kraft. said. $370 to $450/ton. Pulp production in Paper Co, Thai Paper Co Siam Pulp manage- Thailand is currently fac- and Thai Union Paper. rent will go to Brazil to Mr Chamnarn also said ing difficulty in securing Co, he noted. find a new type of euca. that The ASEAN Pul lyptus suitable for culti- and Paper Industry Club vation in Thailand, he (APPIC) meeting re noted. cently agreed to cooper Mr Chamnarn went on ate on newsprint produc. to say that the first quar. tion and is undertaking a ter this'year in the best feasibility study of the ever for the industry. project. At the meeting emandl,-r pVnsJ the project.to jointly.prq-, . esased42%.from-.88)00 ddle security paper to 'ns to 42,900 tons Wlj j!int bank notes was can pduction capacity we6a c. ed after three years of up 32% from 20,400 tons discussions, because se to 27,000 tons, he said. curity problems could not Demand for paper rose be )vercome.
111 Textile group to petition against Indusptry Council THE National era-. more flexibility in han. affected if their associa tion of Thai Textile dling their members' tions were not allowed Indusby (NFTI') will problems. to deal with textile early this week send a He said that if the problems independ letter to the Hu6se Ex- associations were re- ently. .traordinery Committee -quired to become mem- "ewn ob ne for Industry to 'etitlon bers of the Industry peneofnto - 6 'ii" the establishnient oftho Council, it would harm t nd- ftectij-ixi Industry Council, the textile industry. handling our p oble.. NF'I president . "We woidd like the and in holding dia. Songkram,Chivapravat- Industry Council to logues on any proo danrnxg said at' the allow textile associa- lIms," he said. weekend. tions to become mem- The bill to establish Mr Songkram said bers on a voluntary the Industry Council the decision to petition basis," he said. 'Ifthey has been jointly drafted committee was rephed want to become mem- by the Induatry Minis on Friday night at a bers, that's their busi- try and the Association meeting ofNFr mem- ness, but if they do not of Thai Industries, and bers. The NFTIIcorn- want to become pris mem- is now under the representatives of bers, then they should scrutiny of the House t Textile Manufactur- not be forced." Extraordinary Commit en Association, the Meanwhile, Thai tee on Industry. Thai Garment Manufac- Garment Manufact dr Turers Association, the ers Association presi. Thai dent Viroj Amatakul ation, the Thai Silk As- chai said the require sociation and the Thai mhal sai terreouire Weaving Miaufactur- mert ran counter to the er Association. democratic system. .Under the ruli of "Such a requirement Cunil, is against human rights. all textile assocRaloas which state that no one me momera should be forced te be o_ e counci wit-come a member of any "180dy. associatioa," he said. iW ingkram siaid He said the textile the associationm prefer- industry involved more red to be independent as •than 700,000 people and this provided them with. these people could be
112 BANGKOK POST THURSDAY JUNE 11, 1987 Soap exports: The latest US petition target
THE US soap industry has petitioned the US Commerce Department claiming the Thai soap industry, which exports its products to the US, is receiving government subsidies. A source said the While here, Mr La. petition, which was sent save. will also collect to the department on. data on Thai steel pipe April 17, claims the exports to the US as this subsidies include jpe- industry ."has been' -cial tax exemptions charged an anti-dump r nted by the Board of ing duty of 15.6% since tment, reduced early last year. The electricity rates and ousce said he will col support from the Export.' lotiexport figures for, Promotion Committee. - ) Lawyer Arthur La save of Wilikie Farr the whole of Lint year rts. Gallagher, the law firm and the first thre. The department said representingThai inter- months of this year in -the Thai steel pipe ests in the United Ereparation for a possi- indust- had experi States, is here. from le revision of the anti- enced steady growth for June 8-17 to collect data dumping assessment by the past few years and on the Thai soap export the US Commerce De. domesic consumption industry to counter the partment. was about 70,000 charges. Meanwhile, the Buni- 80,000 tons/year. Thai ness Economics Depart- land'o nine producers EW meat has reported that have a combined ca THAI V the anti-dumping duty pacity of about 504,000 caused steel pipe ex- tons/year. The excess Mr Lasave will dis- ports to the US last year production, about 60%, cuss the matter with the to. fall flightly from is exported. government' agencies 1985. Export last year The quality and price I dia the amounted to 167,188 of Thailand's steel pipes involved,iole, in In ng he tons worth 1,744 mit- are competitive, which Bol, the Indutri Es- lion baht compared with can be seen from the land,tate Authority the Electricity of Thai- Au the 1985 figures of fact- that even though thority of Thailand and 167,253 tons worth the present world mar the Ministry ofFinance. 1,791- million baht, a ket is highly competi He is expected to drop of 0.04% and 2.65% tive, Thailand's exports finalise the data collec- respectively. are expected to be about tion and forward the, The anti-dumping 150,000 tons v rth Thioview torwa the duty has had a serious 1,450 million baht this merceThai view Department to the om-by constituteseffect as the about US market half of andyear, a17% drop respectivelyof only 10% June 20, the source Thailand's steel pipe ex- from lastyear. said. The Commerce De partment is expected to make a ruling on the preliminary counter vailing duty on Thai soap, as urged by the 113 US soap. industry, on July 11-13. police raid firms ed toThai bank
POLICE have raiided the offices of two Hong Kong finance companies affiliated with Frst Bangkok City Bank in.connection with an investiga fion into their business failiFes, accordug to UPI reports. Raid Hong Kong officials were revoked on June 25, for five Thai men and one hies said are also working through the firms' busi- financial institutions 1986." woman, all of whom are ness was conducted in a Continental the international police Illinois, The two companies now believed to be in manner detrimental to Chase Manhattan, agency, Interpol, to locate were identified as Irving First Thailand. the interests of deposi- Trust, Bank ofCalifornia, six Thai nationals who Bangkok City Finance Co Among the premises tors. ,might First Inter State Bank of be able to explain and Thai Mercantile searched were two By that why directors c"the two time, its parent America and Irving Development Finance companies listed on the firm, the First Bangkok Trust's companies had left town Ltd. finance firm. ,.. Hong Kong Stock Ex. City Bank in Thailand, First Bangkok City .leaving bad debts of Police would not say.. change, Creative Invest-, HK$500 million ,was also in deep trouble Bank *resident Sunthorn (US$64 - why the icences were re- ments Ltd and First City and the Bank ofThailand Arunanondchai million), a police spokes- yoked said and no charges Investments Ltd. An ex- was taking action to re- shortly after he mar said. have waA ap been brought in ei- change spokesman said vive it. pointed ar the In a brief official state- ther case. bank's new Howeve-, a trading in the shai-es of First Bangkok City Fi- chief after it came ment, police said officers spokesman said under the Coin- both companies was sun- nance is reportedly official control that the of th Commercial Crime mercial Crime Bureau pended until the situa- Bureau "searched owned 20% by FI3CB and bank would like to ex a num- would like to locate the tion was clarified. 80%by firms in Thailand her of premises ..: in press 'ts responsibility con- directors of the firms to In suspending the two believed to be related to nection with the trading question them over the amount of money about the firms' regirtrations last the bank, while Thai and it would not ignore oftwo former Hong Kong- companies' bad debts. year, Hong Kong's Office Mercantile registered deposit-taking Development the payment. Another police source of the Commissioner of Finance was closely The companies whose licences said officers were bank, according to looking Deposit-taking Compa- linked to the first firm. Mr Sunthorn, would At the time the li- spread the $19 million cences were revoked, repayment over five First Bangkok City Fi- years, or an ave -age of nance's chief executive 20% a year, with the first was Rungroj Kornkaew- payment expected to be prasert and Prasop made in late 1989 or Ratana-ubonchai was the early 1990, but only if the chief executive of Thai bank was operating Mercantile Development profitably. Finance. Both were also the then-representatives of the FBCB in Hong Kong. They disappeared from the Crown colony before the registrations of the two firms were sus .pended. In July last year, the Hong Kong Government also asked the HigL Court to liquidate the two firms because there was no authorised designa tion left in Hong Kong to manage the companies. It said the liquidation was to protect the interests of depositors and creditors. 114 According to a Thai au thority, the two firms owed about US$19 mil lion to six American Sunthorn facing ouster from bank by Chatrudee Kittisuksatlt THREE majorFirstBangkok City Bank shareholder groups have agreed to vote for the ouster of Sunthorn Arunanond- B k chai vs the bank's president because he allegedly could not anker clear himself of a "sales-commission" charge. An iformed sourcz Though the three private they were issued e- were believed to have re- three major shareholder who represents one of the major shareholder groups cently. ceived only 2% commis- group thought M Ma. three shareholder groups would vote for ousting The bank recently de- 'ion from the bank xe noch hould oerve as told the Business Poet him, if the central bank cided to increase its regis- cause they were only re- permanent rhairman of yesterday that the move disagreed, it has the right tered capital by 5C0 ril. quired to underwrite half the bank. to oust Mr Sunthorn was to veto our decision. lion baht by issuing 100 the originally agreed agreed to unanimously by Therefore, the best way is million shares. volume. "here were re? the three groups at an to let the decision Mr Sunthorn told m. Moreover, some branch the central baik. Iftso we unofficial meeting. .whethcr to oust Mr Sun- porters recently that the managers reportedly said will a him tonkstay on at "However, the three thorn rest with the cen- underwriters had advised they a received only First Bangkok City groups also agreed that tral bank." the bank to price the 1%for their sales of the D ano sad they will not take the Howcvcr, he said, the shares at 5.50 baht each bank's shares,while Mr lead in this move as they three major shareholder to make them more at- Sunthorn told reporters Meanwhile, Bangkok want the Bank of Tsa- groups wouldjointly raise tractive. the branch managers had of Thailand Governor land to make the decision the topic for 0,Icussion at However, the bank in- received 2% and the three Kamchorn Sathirakul to oust Mr Sunthorn," the the next board meeting. siated on maintaining the major shareholders r- said Mr Sunthorn's source said. Mr Sunthorn was price at 6.50 baht and the ceived the balarce. ouster would deper-i on "This is because the charged of accruing per- three major shareholders., the decisioa of First central bank has a veto sonal benefits from the led by Smarn Opasswong, The source claimed the Bangkok City Bank's right over the bank's' underwriting of the Charoen Srisomburana. Bank of Thailand was shareholders. board of directors, bank's new shares when nond and Kiat Srifueng. very "unhappy" with Mr fung respectively, agreed Sunthorn's performance. "Ifthe shareholders de to buy 50 million sarefi "We believe the central cide to find a new presi. with the underwriters bank must take some ac- dent, it will not affect thG taking the rest. tion against him or, at bank's operations be By doing this, the least, ask him to clear up cause its operating sys underwriters and the this controversy," he said. tem has been well de three major shareho!ders signed," he said. received 4% commision Desides the three for their underwriting, I major shareholder At the same time, Mr Sunthorn was re roups, the Bank of Thai- another source said the MrSnton a w- a~~n a o OiEW Bank of Taln a ported as saying. and Thailand had However, press reports HoferspFnnilnetuanto e nt tanstarted leainapproachingfianies cer claimed there was al oVa g rgcierNi dummy recipient for the a c including oimiakion paid Virci Nualk. to the the bank. hair of Phatra Thanakit, cin case Mr Sunthorn underwriters as they The central ank's a;- custed. was .•sistant governor, Manoch Kanchanachdya, is also "It will be best for chairman of the First every party concerned if Bangko'- City Bank as Mr Sunthorn decides to the fund's representative. resign from the bank." The source said the the source added. Sunthorn maybe
took 50 million shares from the underwriters ateB and salgned its employ ees to help sel1 them, and. FMSi Bangkok Ci But another source, tors what to do next. But I pay more tax on their the bank promised to pay Bank chairman Manch whole also a director of want to say tlat he (Mr earnings from commis- the employees 2% com Kanchanachaya is ex- the bank's board, said: Sunthorn) was rather sions of the bank's share mission. pected to ask Sunthorn "We have never accused unfor~anate. sales. However, it was re Arunanondchai to resign him (Mr Sunthorn)" of But Mr Kmchorn de- When asked whether ported that Asia Credit as bank president as his doing wrong. But he was dined to*elaborate fur- Mr Sunthorn would re- was asked to pay 4% com clarification of the "sales- accused of breaching ther. sign as the president of mission for the cales of its commission" charge was banking ethics. " * Wben asked for his the bank, Mr Manoch lot of shares, but only half not acceptable to the When cored by the comment as the chairman said. Whe board has let of the amount who paid to bank's board of directors, Postand a - for-a corn- of the Fund for Rehabili- Mr Sunthorn make his employees and the bal a banking source told the ment on the asue, Bank tation and Development own decision. Now, it is ance was allegedly trans BusinessPost. of .Aailand Governor of Financial Institutes, a up to him." ferred to the savings ac However, Mr Sunthorn Kamchorn Sathirakul major shareholder in But Mr Sunthorn in- count of a top executive of onnounced after tho said: "I do not want to First Bangkok City sisted that he was inno- the bank. board meeting yesterday make a comment as it's Bank, Mr • Kamchprn cent. The controvesy was that he would not resign not a matter for the cen- said: "At this stage, it is a 'I have never taken sparked when the bank from the post as he "had' tral bank. It depends on matter for the board, and any benefit from the employees involved in the done nothing wrong". the bank's boarl of direc- not the shareholders; and bank'r share sales," he sale were asked to pay - the fund has Mr Manuch said. "I have been in the income tax on their sales as its represertative." banking circle for 19 commission as if they Meanwhile, Mr Ma- ye.rs and I have never they had received a 4% noch said the bank has thought I would have to payment. So they submit received 5.9 million baht face this problem. I have ted a letter to Mr Ma-i from three private major my prestige and, in this noch, asking for a probe shareholders of the bank. case, I have already into the case. They received the cleared myself." amount as sales commis- However, the source sions from Asia Credit, said Mr Sunthorn's clan one of the bank's share fication was not accept underwriters. able to the board. "But He said the bank will the board wanted Mr use the money to settle Sunthorn to resign by income tax payments for himself. If he insisted on its employees who have to not resigning, the board I would force him todo so." The bank recently is sued 100 million shares to increase its registered capital by 500 million bahLt. In this, it appointed Asia Credit and a number of financial companies to act as share underwrit ers. However, the under writers claimed that the shares were priced too high at 6.50 baht each and it would be difficult to sell them to the public. The bank, therefore,
Bangkok Postis
116 S'unthorn decid 01 resignation FIRST Bangk4k City Bank president Sunthorn Arunanondchai has decided to resign after the bank's board of directors decided not to accept Banker htsvxplanation on the "share-sales commission" charge. An informed, source cused of miscondud over per share bet by the bank Mr Sutthorn argued tive in banking and fi said yesterday that Mr the distribution of com- was too high, so thb bank that he was innocent and nance circles to replace Sunthorn handed in his missions on the sale of took back 50 million had never benefitted from Mr Sunthorn and an an resignation letter to bank Ahe bank's shares. shares from the under- the share sale. However, nouncement was ex chairman Manoch Kan- The bank had ap- writers and assigned its his clarification proved pected soon. chanachaya on Tuesday pointed Asia Credit and a- employees to help sell the unacceptable to the Meanwhile, Bangkok evening after an hour- number of other financial shares. board. Bank president Chatri long talk at the bank's companies as underwrit- The bank later paid its Mr Sunthorn, who was Sophonpanich sympa head office, era of the bank's 100 mil- employees involved in the then the executive chair- thised with Mr Sunthorn, His resignation will lion shares. However, the sale a 2% commission, man of Asia Credit, was, saying he did not believe take effect on July 1. underwriters complained but the income tax approached some i0 Mr Sunthorn had benefit- Mr Sunthorn was ac- that. the 6.50.baht price charged on the earnings months ago by the bank's ted from the share sale as from the cbmmimion was three major shareholders, charged. based on a 4% commi- Smarn Opaswong, Kiat siop rate. Stltftengfung and Cha- "I think he had good The employee, there- roen Srisomburananond, intentions, but he was too resumite aeteret to assume the bank's ambitious and the excess Mrfore,Manoch,submittedwho a letteris alsoto peinc.ambitionpresidency. miin finallyfial de-e asMistant goverror of the At the time, First stroyed him," Mr Chatri SuinBankof Thailand askin Bangkok City Bank was said without elaborating. him to look into thle case.g in financial trouble and When asked whether meIt was found that te had been ordered by the he would reappoint Mr bank had pad a t4%c- Bank of Thailand to re- Sunthorn to Asia Credit, meiesion but only half of duce itA registered capital a subsidiary the money was paid to by of the Bang-. tho 95% and then later kok Bank, Mr Chatri, to leave employees, while the bal- increase it again. . who is also an adviser to ance was transferred to a The central bank also the financial company's savings account allegedly ordered the Fund for board, said it was not up banki g bRehabilitation and him to make such a deci belonging to Mr Sun- Development of Financial OUTON rInstitutes sion. "This will depend on OUTGOING r ~residentof .25%of the newto take capital. about Asia Credit's board." FirstFsBan Bangokn on Ciuta-City .2However, in his per- Bank, Sunthorn Aruna- Mr Sunthorn's appoint nondehai, is expected to ment as the bank's presi- sonal opinion, he thought quit the banking circle dntwadent was asoaproealso approved aarSunthorn rest before would deciding take for a while and to devote Regding some press his by the Bank of Thailand. where to work time to fully manage reportthathe was being As he has already ten again. hsaim betfulane ines itigdhe Bnk dered his resignation, the "It's a pity. Mr Sun- Thai Durable Textile inveofgat d by the Bal source said he was no thorn has a bright future (Thai Kriang) Co where of Thailand for his al- longer authorised to and he is still very young he is executiv" chairman. leged involvement in make any important deci- and should be able to some deals, in which he sions and would only han- work for the society and Mr Sunthorn told the reportedly had the bank dieroutinejobs. count-y for a long time Bangkok Poet yesterday buy some assets at very The source said Mr Ma- before his retirement. that he had not yet bigh prices while ha sold nch had already ap- "But it'sa pity he had thought of what to do some of the bank's assetsnochhd a p- t 'a the ad next after leaving the at very low prices and proached a senior excu- ktoleave (the First Bang bank because his resigna- had taken benefits from kok City Bank) with a big tion was very sudden, these deals, Mr Sunthorn Mr Chatri said that be . However, he claimed said they were all that his resignation was groundless. foreto MrresignSunthom from decided First suspended by three pri- 'Thebank has its pur- Bangkok City Bank, he vate mAjor shareholders, chase and sale depart- came to see him and "but I insisted on leaving ments and in buying or 'asked for dvice about because I feel very tired selling any assets, the whether he should resign. and want to have a resLt bank will have to set up a "I told him to clear "I came to this bank committee to handle the himself of the charge be and I have contribi'cel a deal by calling bids and fore making any further ., lot to it. I have standr offers. I have never been 117 decision." dised its management involved in these matters system hnd restructured which are in the charge of its organisation," he an executive vice presi added. dent," he clarified. 7 suspects held in marble tax swindle I
SEVE people were ar- sathit, who is still at forged documents to " rested yesterday in con- large, to open an account withdraw 8.5 million nection with the swin- in the name of Mah baht from the account the ;itll d ing of 14,622,041 baht Boonkrong Marble next day. the Mah Boonkrong Mar- Company at the Sri Ayut- When the. suspects ble Company deposited thaya Bank last Septem- tried to withdraw with the Customs De- ber l3. another 6,072,799 baht partment as a guarantee Three days later, the from the same account, for taxes on its imported suspects put a cheque bank officials became marble. worth 14,622,041 baht is- suspicious and contacted Six of the suspects were sued by the Bank of Thai- Mah Boonkrong pres seized in Bangkok. They land into this account. dent Sirichai Bulakul. wereExpress identified Company as presi-Tran fundThe amountpaid them was bythe there- policeMaj-Gen expect Boonchu to. arrestV said dent Termsak Tannakit- Customs Department. another chief suspect karn, Thai Nichikawa Maj-Gen Boonchu said identified only as Krao or Rakeri-aksorn,managing directoi Tran Vichai Ex-"i the suspects then used K'angsoon. press Company's ship- M' - ping agent Noppadol Kit tipoonsoong, Prakit Chit taveera, Sompob Pusya nond and Mrs Em-om Boonyakhan. The seventh suspect, Somchai Chienklaewkla, '. . was arrested in Si Sa Ket. " Crime Suppression i. le Division chief Pol Maj- CSD commander Maj-Gen Boonchu Wangkanond interrogates tax racket suspects Wangka- Suspects Denchai sae Foo, Sampao Sd-areaand Somjit Sr-aree nond said the Tran Ex-...... press Company was the A"4 shipbroker which cleared in marble marble for the Mah Csview Compn.Company. Marbleta surrender refttxr i Jes / The arrested allegedly conspired with other sus- A COUPLE allegedly in- Ie II .[ Je volved in the swindle of / pects - who are still at large - to secure docu-' 14 million baht import CUSTOMS DepE rtm,.nt head the second group forged documents to ments believed to be for- duty refund of Mah chief Viroj Laolcqpt.P:, which will aeview the claim 14.6 million baht geries which were later Boonkrong Marble Co yesterday formed two checking ofsignatures. in refund of duty depos used to collect the 14,622, gave themselves up to po- , committees to review The signatures of per- its from the Customs 041 baht refunded to Mah lice while another person regulations and proce- sons authorising their Department, after they. Boonkrong by the Cus- was arrested in Udon dures on the refund of agents to collect the had learned that the toms Department. Thani yesterday. import duties. money must match company was seeking a Maj-Gen Bconchu said A Crime Suppression Mr Viroj said the specimens held at the rettu n ofthe money. the documents autho- Division team yesterday revision was necessary department. Mr Viroj said severe rued Mrs Supin Rojpibul- I arrested Denchai sae because the present action would be taken Phoo, 36, from a house in methods have been in against any customs Muang district of Udon use for a long time. RECURRENCE officials found to have Thani while Sampao In- Import Inspection been involved in the area and his wife, Som chit, gave themselves up Division director, Luan Mr Viroj said the re-' case. topolice. Pangsuk heads the first fund procedures need to committee to review the be improved to prevent releasedThe suspectson bail yester-were, Denchai, who used an refund procedures. a recurrence of the al- day, police said. assumed name of Sam- Department secre- leged 'Mah Boonkrong Somphob Pussaya chzi Chienkaewkla, *al- tary Anmuuay Kullapa- Marble Co swindle in nond was released in legedly forged the docu- nit was appointed to which five suspects had the morning after his ment to withdraw the father Phiphat put up a amoint of tax refund by ' three million baht title Customs Department for deed. the company's imported The other four sus marble from Sri Ayut- pects, Ter fosakTan thaya Bank last Septem- nakitkarn,nect, NoppadoiNopadon ber 13. Kittipoonsook, Vichai The suspects allegedly Raksri-aksom and Den forged documents to chai. sae Phoo, wer in the claim import duty refund bailed out on behalf of the Mah Boonkrong Co after evening when their learning that the relatives guaranteed company was seeking a L18 their appearance in refund of 14.6 million for court with land title imported marble. ioelion deedsbaht, totalling police said.12 mil Prapatto clear up Customs scandal4 officialse DEPOTY Finance Minis-, 1.2 million baht 'higher Mr Praa e s ter Prapat Phosuthon' than the amount said yetprday actually concern aboutsmugglins he would paid. Several senior cus- at Don the Muang Airport, clarify alleged tax toms officials were impli- where smugglers have evasion on an imported cated. devised new techniques, customs Japanese sedan which Mr Prapat said the apart from bribery. was given to a retired scandal was the work of Some police and mili- prob senior Cutoms official some un rcupulous offi- tary officers demanded e f,. lat year. ' cials to create disorder in entry to the restricted He said he will explain the department. the matter as soon as the pasger arrival lounge to wolcome their rela- THE Finance Ministry findings ar submitted to COMPLAINTS tives and friends who himnext has appointed two more week. usually brought in a "I have become a tar- senior officials to a coin large amount ofgoods. mittee that get of criticism, even "Attempts to unseat will renew "I don't know what to an investigation o4alle though I wag not in- some s-or officials are do about it," the deputy volved," he said. evident," .ations that 14 Customs the deputy minister admitted. a n According to press re- minister said. officrals Smuggling in the and a ormer de ports, a Toyoto sedan was, Mr Prapat added he 'southern provinces imported'with its model had received complaints through ment chief ha e a domestic mail bi eva e deliberately misstated to from Thai travellers has also posed a ajor avoid paying the full about mistreatments Wes. by problem to authorities. Ministry spokesman amount of import duty customs officials at Don. Meanwhile, Customs which would have been Methi Pamalanont said MuangAirport. Department chief Viroj that the two new mem Laohapant said at a press conference yesterday that bers are himself and C the morale of the staff Customs Department Customs chief ebbed when he took over. deputy chief Prakong e He found them insecure Leelawong. explains tax refund and divisive. Mr Methi,who isaC Mr Viroj said he im- 10 adviser to the minis The Customs Depart- company, rather than at mediately made changes ment had followed all the the try, said he believed a. Customs Depart-. to create greater fairness new proper procedures in re- ment. investigation in staff reshuffles, promo- would ensure justice in funding 8.5 million baht Earlier reports said the tions and appointments, in taxes to Mah Boonk- company had the case. filed a com- At present, staff per- The department rong Marble Company, plaint with the Crime al formance was assessed leged that the 14 offi Director-General Viroj Suppression Division, twice a year, and that Laohapant said on claimingthat the cials had helped a mer em- only those who are ac- chant evade 2 .6-raillion *Wednesday. ployees had fled with the cused of serious wrongdo. He said the signatures money. baht worth of taxes to ings were suspended from bring in a new Japanese ofthe persons who authc The CSD had report- duty. rised the agents to come edly concluded that the Personnel Division sedan, a Toyota Soarer, and collect the money" money had been givinn to director Supakij Dulpit into the country,by say 'also corresponded with authorised persons, and said favouritism before ing the vehicle was an the specimens kept at the that it would not take Mr Viroj's arrival had department. inferior model and mis any action against the undermined the morale. representing Mr Viroj concluded Customs Department its value. or of many department offi- The ' vehicle was that any irregularities its director-general. cials, must have therefore found in the possession occurred withi,n +h of a former Customs De partment chief who al. legedly imported the automobile without paying the proper taxes. Mr new Methiinvestigation said that a would punish any offli cial found to have in wter heftcaseG~lv involved infraud. been He said the commit A METROPOLITAN Water Works Au. Mr Nimitr said Sanit was found tee thority ispector has asked for a trans. did not anticipate - innocent because he has paid an aver- any problems because fer after his superior made an apology age of 6,000 baht in monthly water to a water theft suApect he arrested, the witnesses and 'evi. bills. dence had already been MWA's inspection division chief Ni- Mr Thawat Sinqvanich, the official mitt Talaphak gathered by an earlier reportedly sent a letter who arrested Nimit', has asked for a probe. to Sanit Rajanasaroj, the owner of Usa transfer to protest against his superi- Deputy Finance Pattlana Sethakij Co, who was ar- or's actions. rested last week for water theft, saying Mr Nimitr said the Interior Ministry Minister Prapat Phosu the arrest was the result tfa misunder- is considering the water agency's re- thon told reporters standing. quest for permission on Sanit was alleged to have stolen to rrrest Sant Thursday he expects to Phamornbutr, a former district chief of be able to clarify' the 100,000 baht worth of tap water for his Lard Krabang, who was alleged to have charges next week. factory in Bangkhen over ten years. stolen 200,000 baht worth of tap water The division chief also ordered the last year. official who made the arrest to drop the Mr Sant is now chief of Wang Noi case against Mr Sanit. district in Ayutthaya. 119 BANGKOK POST SATURDAY JUNE 20, 1987 Customs probes new imported car .scandal THE Customs Department has set up a committee to -investigate alleged irregularities in duty assessment on 23 used cars which caused the Government to have lost nearly 10 million baht in revenue, a Finance Ministry source revealed yesterday. According to the source, former cus- Laohaphan early this year cancelled toms chief Kraisri Chatikavanij an- the use of FOB prices in duty asses& nounced on October 1, 1984 a change of ment and returned it to the CIF prices, duty assessment from CIF to FOB reasoning that it was fairer to import ices to allow the Government to col- era and car owners. The change effec ohigher taxes on imported used cars. tive from February 11 was approved by Not long after t, a change went into the Finance Ministry and the Cabinet. effect, the import taxes on those 23 cars The House Communications Corn were assessed. Custom3 Department mittee is also investigating the matter. deputy chief Chayut Jiralertpong re- Mr Viroj, who was yesterday invited portedly asked thqFinance Ministry for whicha tax rebateare Mer on thesee Ben cars, ovaiu most of alegedto testifytax toevasion the committeeof a Toyota onSoarer.the whchar ercedes Benz of various ai models. car, reported on the department's inves The Finance Ministry replied that tigation. the rebate could be given by the depart- Several customs officials were al ment on an individual basis. Mr leged to have helped a merchant evade Chayut, who took the ministry's reply 1.6 million baht in taxes to bring in the as implying that the change of tax car by misstating its model. assessment on imported usedcars was Mr Viroj told the committee chaired not ministerial policy, then asked Mr by Uttaradit MP Prem Malakul that he Kraisri to sign an order to assess taxes had asked the Finance Ministry to based on CIF prices of those 23 cars degedly involved in taxstevasion. instead of the FOB prices which would require the owners to pay higher taxes. The committee will invite Pol Capt The practice allegedly caused the Chookiat Satjavetha, Pol Capt Prakorb Customs Department to have lost Sataman and Pol Petty Officer Samarn nearly 10 million baht. Boonyasap of the Police Registration The source said the order issued by Division to testify how the Toyota Mr Kraisri at Mr Chayut's request was Soarer car in question was registered. discriminating and went against the The committee will also invite Customs Department's announcement. Permanent Secretary for Finance The committee is investigating to Panas Simasathien, Mr Kraieri, former determine possible irregularities, assistant police chief Pol Gen Sansh Customs Department chief Vkoj Sitthiphan and Mr Chayut.
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