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PM hands deadline to ailing firms

Posted by pakin On January - 19 - 2016

Seven ailing state enterprises have been given a March deadline to propose their revised rehabilitation plans after they failed to meet all the requirements and targets set by the government last year.

The State Enterprises Policy Committee (SEPC), chaired by Prime Minister Prayut Chan-o-cha, met Monday to evaluate the seven state enterprises’ one-year performance and implementation of the 2015 rehabilitation plans.

The state enterprises include the embattled Thai Airways International (THAI), the State Railway of Thailand (SRT), Bangkok Mass Transit Authority (BMTA), the Small and Medium Enterprise Development Bank of Thailand (SME Bank), the Islamic Bank of Thailand, TOT Plc and CAT Telecom.

“The committee has seen some progress and improvement since the implementation of the plans but some key issues have not been resolved and some requirements have not been met,” said Ekniti Nitithanprapas, director of the State Enterprises Policy Office.

They are required to revise the plans to make them more concrete and propose them to the committee by March, he said.

Gen Prayut instructed the committee to stop giving “yellow card” and “red card” warnings to executives of state enterprises who failed to improve their organisations’ standings as these measures may put too much pressure on them.

Those who receive red cards are transferred from their posts.

The committee then resolved to give scores of “outstanding”, “good”, “fair” and “should improve” to executives instead.

Mr Ekniti gave details of each state enterprise’s evaluation.

Last year, THAI failed to meet its target of cost reduction.

The company could only cut expenses by 7.26 billion baht, compared to the 10-billion-baht target.

The national flag carrier is required to propose a plan to reduce sales agents and increase online ticket sales.

The company is also required to delay the purchase of unnecessary aircraft.

The debt-ridden SRT is required to make more clear in its plan the aim to increase the role of the private sector in its investment projects to reduce the state’s financial burden.

The agency has been ordered to present its sources of funding whenever it seeks cabinet approval for investment projects.

The committee reiterated the need for the SRT to find private investors for the development of its Red Line and the extension of the Airport Rail Link to Don Mueang Airport.

Mr Ekniti said the SRT has made substantial progress in dual-track development and has already opened bids for two projects.

As for the BMTA, he said the agency is required to revise a plan to purchase new buses and to accelerate the bidding for 489 NGV-fuelled buses by March.

The loss-ridden Islamic Bank of Thailand is required to speed up its plan to seek business partners and reduce non-performing loans.

The SME Bank is also required to reduce its existing 20-billion-baht non-performing loans.

Meanwhile, TOT and CAT are required to make their roles clearer in the telecom industry and their business direction amid mounting competition.

Mr Ekniti applauded the TOT for its successful reduction of expenses by 10 billion baht last year, much higher than the target of 6.87 billion baht.

Meanwhile, the SEPC approved in principle a draft bill for state enterprise supervision paving the way for the establishment of the “superholding” organisation to oversee potential state enterprises.

Prasarn Trairatvorakul, chairman of SRPC’s subcommittee overseeing the establishment of the National State Enterprise Corporation, known as the superholding corporation, said the corporation would be 100% under the Finance Ministry.

It will act as a shareholder of 12 state enterprises which have been corporatised such as the Airports of Thailand, PTT Plc and MCOT Plc, said Mr Prasarn, the former Bank of Thailand governor.

Under the bill, the 15-member corporation board consists of five people from the government, five civil servants and five experts.

“State enterprises are national assets so it is impossible for the government to be totally uninvolved in them but we will find some mechanisms for checks and balances,” he said.

However, the bill required accountability of the government if it caused any damage due to any intervention.

Also on Monday, Prime Minister Prayut insisted that the draft bill is aimed at reforming state enterprises to boost their efficiency, not to privatise them.

The bill seeks to improve performance of the boards of more than 56 state enterprises. Of these, seven are in urgent need of revamping, such as the SRT. These state enterprises have never before been reformed and their problems have remained unsolved, he said.

Gen Prayut also said some problems cannot be solved through punishment or dismissals, adding that some of the existing members of state enterprise boards should be given a chance.

Meanwhile, a source at THAI said it is considering resuming Bangkok-Seoul-Los Angeles flights, halted on Oct 26 last year, following the global oil price slump.

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