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Regulatory Reform and Competitiveness in Thailand
By: Sakda Thanitcul

to deploy PTT capital in most effective manner and under PTT control.

Proposed Regulatory Framework


Public Policy
Independent Regulator
-market design -Compliance with marker codes  
-subsidice -fair prices  
-environmental -customer service standards  
-energy security -dispute resolution  
-fuel diversity -compliance with public policy  
-adequate competition requirements    

A regulatory framework must be developed to oversee there structuring and development of the energy sector. The independence of the regulator is an important feature in fostering and environment of "competitive neutrality" between public and private sector enterprises. This is effectively accomplished by separating the function of public policy from regulation by establishing a regulatory body responsible for regulation of the electricity and gas industries independent from the National Energy Policy Office (NEPO).

(e) Other Sectors (Banking, Industrial, Agricultural, Social & Technology, Commercial & Services)

The state enterprises in other non-infrastructure sectors were established to either

discharge the government's role of providing basic services to the public or to create and promote new industries where there was a lack of private sector presence. The total number of state enterprises in this sector is 42.

Sector Objectives The government's position is that state enterprises not engaged in core government functions will be privatized. The government will then focus on policy making and planning for the sectors; regulation of monopolies (where necessary); and, the operation of state enterprises or government bodies with core government functions. For core government functions that remain with the state, there will be an increase in the operating efficiencies through that introduction of private sector best practices as well as the creation of an environment for sustainable, effective and efficient private sector participation

Full exit of government ownership For those state enterprises with operations that can be viably performed by the private sector, the government shall divest full or nearly fully its stake through various methods of privatization. The government may also act as a passive investor in some state assets as part of their investment portfolio. Preliminary indicative classifcations of the enterprises that may fall into this quadrant include the following enterprises:
--Liquor Distillery Organization
--The Glass Organization
--The Battery Organization
--The Tanning Organization
--The police Printing Press
--The Thai Plywood Company Limited

Rationalize state enterprises for possible future divestiture

For state enterprises currently performing non-governmental functions and whose operations are not financially attractive or viable for private sector participation at present, rationalization of functions/operations, and analysis of corporate and business structure

and assets shall be undertaken for possible future divestiture by the government. The enterprises that may fall into this quadrant are:
--Thailand tobacco Monopoly
--The Marketing Organization
--Sports authority of Thailand
--The Government Pharmaceutical Organization
--Office of the Public Pawnshop

Separate government functions and divest non-core functions and operations. Certain state enterprises perform both non-governmental as well as governmental functions. In these cases, the governmental and non-government functions shall be separated. Non-governmental functions shall be considered for privatization. SOEs that may fall into this quadrant are:
--Playing Card Factory
--The Government Lottery Office
--The Forest Industry Organization
--Fish Marketing Organization
--Rubber Estate Organization
--Dairy Farming promotion Organization of Thailand
--National Housing Authority

Remain as government (as SOE or government body) and adopt private sector best practices. For those state enterprises whose purpose it is to provide social benefits and services which are strategic, social obligatory or non-commercial in nature; or which cannot be performed more effectively, completely or viably by the private sector, such functions shall remain with the government. In such cases, private sector best practices shall be adopted where possible in the operation and management of such activities as a means to improve and sustain greater operating efficiencies. The enterprises that may fall into this quadrant are:
--The Industrial Estate Authority of Thailand

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