By Marwaan Macan-Markar
BANGKOK, Mar 5 2004 (IPS)

A continuing wave of protests against the privatisation of Thailand’s state-run power utility is a formidable test of the government’s policy to sell some major state enterprises to private investors.

By the end of the week, union leaders of the Electricity Generating Authority of Thailand (EGAT) were threatening to bring close to 100,000 labour and other activists outside the prime minister’s office to show their opposition to the privatisation policy.

The government of Prime Minister Thaksin Shinawatra has been progressively put on the defensive over the privatisation of EGAT since this labour movement began public demonstrations on Feb. 23.

From an initial strength of an estimated 10,000 unionists, the number of protesters had expanded to 50,000 after nine days. Till now, the protests have centred outside EGAT’s offices on the northern fringes on Bangkok.

The Thaksin administration also suffered a major loss of face following a decision by the country’s revered monarch, King Bhumibol Adulyadej, to delay endorsing a bill to open the way for the dissolution of EGAT.

The plans affecting EGAT are part of the government’s measures to transform six leading state enterprises into private entities this year, followed by three more in 2005.

The agencies billed for privatisation in 2004 – as part of ‘reforms’ aimed supposedly at economic efficiency û include the Metropolitan Electricity Authority, the Mass Communication Organisation of Thailand, the Government Pharmaceutical Organisation and the Metropolitan Waterworks Authority.

Destined for sale in 2005 are the Port Authority of Thailand, the Provincial Waterworks Authority and the Expressway and Rapid Transit Authority.

The sale of state enterprises is among conditions imposed on Bangkok as part of the bailout package that the International Monetary Fund (IMF) offered in the wake of the 1997 financial crisis.

The first state venture to be sold was the Petroleum Authority, followed by the Airport Authority and the national carrier, Thai Airways.

But not all economists have been impressed by the outcome of these sales, and they are again cautioning the government against the sale of EGAT, given its record of profitability among state enterprises.

”EGAT is efficient as it is and it is the most profitable public enterprise in Thailand, so why privatise it?” asks Somboon Siriprachai, an economist at Bangkok’s Thammasat University. ”I don’t think EGAT is a burden to the state as is made out to be.”

”The record of privatisation we have had is not good; there is no model for EGAT to follow,” adds Somboon during an interview. ”When you privatise, you create a private-sector mafia that will make huge profits from share prices, as we saw with the sale of the Petroleum Authority.”

Even after that, he adds, the climate at the privatised Petroleum Authority has been far from free, since the government intervenes to control the price of fuel. ”It is not a free market. The price depends on political objectives than economic factors..”

In fact, critics and EGAT unionists cite the case of Petroleum Authority as an example of how not to privatise û in some 70 seconds, the lucrative shares that were sold when the authority went private were gobbled up by a privileged few.

But officials such as Kitti Limsakul, a vice minister of finance, argue that Thailand has little choice but list a transformed EGAT on the stock market to raise funds for new power projects in the next 10 years.

”The privatisation was integral to the future of EGAT, which was needed to raise money to pay for 300 billion baht (7.7 billion U.S. dollars) in capital projects,” Kitti was quoted as having told Thursday’s ‘The Nation’ newspaper. ”If EGAT was not privatised, it would have to borrow money, and the government would have to guarantee its loans, which would affect the public debt and all taxpayers.”

Few dispute that EGAT is a substantial entity, a fact borne out by the annual bill of 7.3 billion dollars that Thailand has to pay due to the energy generated from oil.

Natural gas is the dominant energy source in the country, followed by hydroelectricity and then oil. Thailand’s energy consumption is estimated at 1.352 kilowatt-hours of electricity per capita.

That EGAT is a major regional player also stems from its pivotal role in the planned Nam Theun II dam in southern Laos, which is estimated to cost 1.1 billion dollars. EGAT is expected to be the principle purchaser of the hydroelectric power that will be generated to meet the energy demands in Thailand.

”Handing over such a huge monopoly to private investors will be detrimental to Thailand,” Suphakij Nuntavorakarn of the Sustainable Energy Network of Thailand told IPS. ”The new company will enjoy such rights as who can generate power and the right to control the amount of dams and reservoirs.”

The new company will also enjoy the power to set rules about joining the national power grid because it will have a monopoly of the transmission system, he added. ”This will be detrimental to those interested in renewable energy, since alternative power producers will find it hard to enter the market.”

Suphakij also questions the government’s rationale that the state’s financial burden will be eased after it transforms EGAT into a private entity. ”This is not true according to the government documents we have. The ministry of finance has agreed to underwrite loans of the new company, and the government will step in if there are any financial problems.”

A poll conducted by Bangkok’s Assumption University about the planned privatisation of EGAT confirms how unpopular this move has become. An estimated 73 percent of 1,147 people surveyed in Bangkok said they think the planned sale of EGAT was not transparent.

Furthermore, 83 percent said they were happy with the current power services and 55 percent feared the emergence of a private power monopoly – views that should strengthen the cause of the protesting EGAT and other state-enterprise unionists.

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