Attempted privatisation
Beginning in 2003, President Thaksin Shinawatra repeatedly attempted to privatise EGAT. One of the goals of the privatisation was to raise 42 billion baht from the IPO and use the funds to invest in three new natural-gas powered power plants.
In early 2004 massive employee protests of nearly 500,000 people[18] forced the EGAT governor to resign, thus delaying the planned privatisation of the state enterprise.[19] Governor Kraisri Karnasuta worked with employees to address their concerns about the privatisation, and by December 2004, it was claimed that approximately 80% of employees supported privatisation.[20] Permanent protest stages and tents at the EGAT headquarters were taken down as the state enterprise returned to normal. After the Mahachon Party (one of the few parties officially against privatisation of state enterprises) won only two seats in the February 2005 parliamentary elections, the process of EGAT's privatisation was restarted. The agency was corporatized in June 2005, transforming it from the Electricity Generating Authority of Thailand to EGAT PLC. However, EGAT's privatisation was abruptly delayed when some NGOs and some union members filed a petition with the Supreme Court a few days before the scheduled listing on the Stock Exchange of Thailand (SET).[21]
On 23 March 2006, the Supreme Administrative Court ruled against the privatisation of EGAT PLC, citing conflicts of interest, public hearing irregularities, and the continued right of expropriation.[22][23] The court said that Olarn Chaipravat, a board member of PTT and Shin Corporation[24] (both business partners of EGAT), was on a committee involved in the legal preparation of Egat's privatisation. The court questioned the neutrality of Parinya Nutalai, chair of the public hearing panel on the EGAT listing, because he was Vice Minister of Natural Resources and the Environment.
It also ruled that insufficient opportunities were given to EGAT employees to make themselves heard. There was only one public hearing for employees, which only 1,057 attended. Lastly, EGAT PLC continued to have the right to expropriate public land to build power plants and transmission lines, a right reserved for the state. Two decrees were nullified: one ordering the dissolution of the status of EGAT as a state enterprise, and the other serving as a new charter for EGAT PLC.
Union leaders and anti-Thaksin protesters cheered the ruling, and called for the denationalisation of other privatised state enterprises, such as PTT Exploration and Production (PTTEP) and Thai Airways International (both privatized in 1992),[25][26] PTT PCL, TOT PCL, MCOT PCL, Thailand Post Co Ltd, and CAT Telecom PCL.[27] Like EGAT, PTT also retained land expropriation rights after it was privatised. However, this was one of the grounds for the nullification of the EGAT privatisation. Caretaker Finance Minister Thanong Bidaya has noted that the delisting and denationalisation of PTT could force the government to borrow massively from foreign institutions.[28]
Some criticised that the listing of PTT on the SET on the grounds that it represented a massive transfer of public assets for the benefit of few people. Though the government initially accepted over 100,000 first-time investors, there were reports that the majority of the shares for sale to retail investors had been reserved for politicians, the banks' preferred clients, and journalists, leaving many retail investors, who stood in long lines to wait, to return home empty-handed. A nephew of Suriya Juengrungruangkit, the minister of Industry overseeing PTT and TRT Party secretary general, for example, was reported to have acquired 22 times the maximum number of PTT shares distributed to retail investors.[29]
Fears of this being repeated were often cited as the reason why EGAT's privatisation was delayed indefinitely. Another key argument for delaying privatisation was that privatisation preceded the establishment of an independent energy regulatory authority. In international experience, there are no examples of successful monopoly utility privatisation without regulatory oversight. Under pressure, Thaksin's government formed an interim electricity regulatory body, but some charged that it lacked authority to force compliance, levy fines, or punish defaulters.[30] EGAT employee concerns about employment security were also common. Some expressed concern that partial ownership of Thailand's largest electricity producer by foreign shareholders would impact national security and cause conflicts of interest.
Anti-privatisation petitioners (including the Confederation of Consumer Organisations, People Living with HIV/Aids, Alternative Energy Project for Sustainability, Free Trade Area Watch, and the Four Region Slum Network[31]) were harshly criticised by both Thai and international investors, who accused them of using corrupt tactics in delaying the listing. They also pointed to the public mandate of the 2005 election, during which the only anti-privatisation party suffered a near complete loss. International power sector governance experts from Harvard University, University of Delaware, and the World Resources Institute lauded the successful repeal of EGAT privatisation as an important step towards increased accountability and transparency in the Thai energy industry.
