Thai Govt Agrees To Negotiate Compensation Claims With Telecom Firms

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Government agrees to negotiate compensation claims with telecom firms

By Usanee Mongkolporn,

Piyanart Srivalo

The Nation

The state's multibillion-baht compensation claims and other issues concerning privately operated mobile-phone concessions will be put on the negotiating table, Prime Minister Abhisit Vejjajiva said yesterday.

The government also wanted to see state agencies such as TOT and private concessionaires return to using their original concession contracts, he said.

This follows Cabinet approval yesterday of a proposal by the Information and Communications Technology Ministry to set up a committee that will ask concession-holders to rectify their amended contracts.

The concessions granted to Advanced Info Service (AIS), Total Access Communication (DTAC), TrueMove and Digital Phone Co - a company affiliated with AIS - were amended several times during the tenure of ex-premier Thaksin Shinawatra, resulting in major losses to the state. The Council of State ruled in 2007 that some of the amendments failed to comply with the 1992 Public-Private Joint Venture Act.

Speaking after the Cabinet meeting, Abhisit said the ICT Ministry would report back to ministers on the latest developments on these issues within the next 15 days.

"The ICT Ministry will set up a working group to negotiate with all four concessionaires whose contracts were changed, causing damage to the state. Then, they should follow the processes under Articles 13 and 22 of the Public-Private Joint Venture Act.

"Regarding contract changes which damaged the state's interests, there will be negotiations in accordance with the court's ruling to protect the public interest. The ICT Ministry also has to ensure that it has contingency plans so that the interests of mobile-phone users are not affected," the PM said.

ICT Minister Chuti Krairiksh said that if the current concession-holders refused to use the original concession terms, he would propose to the Cabinet that the previous amendments be nullified.

The working group that will negotiate with concessionaires would be chaired by ICT Ministry permanent secretary Jirawan Boonperm and comprise representatives from the Finance Ministry, such as deputy permanent secretary Supa Piyajitti, the National Economic and Social Development Board, the Office of the Attorney-General and legal experts.

AIS chief executive officer Wichien Mektrakarn said the company had yet to see details of the negotiation framework, while DTAC chief executive officer Tore Johnsen said talks were a good thing as they would enable both sides to listen to one another.

Abhisit said the ICT Ministry also had a back-up plan in the event that negotiations failed.

While private operators suggested that arbitration panels should be used to resolve conflicts, the premier views the pending issues as unsuitable for arbitration as they are "unlawful" concession amendments.

During yesterday's meeting with Singapore Telecommunications' (SingTel) top executives Chua Sock Koong and Allen Lew, Abhisit said his government had to follow the law as far as telecom concession issues were concerned.

Abhisit assured the SingTel execs his government would handle all cases fairly and said Thailand remained committed to further development of the telecom sector, especially with regard to 3G infrastructure.

In a statement, SingTel did not reveal if there had been a discussion with the PM over the future of AIS, in which it has been a strategic investor since 1999. AIS faces potential damage claims of Bt73 billion from the state telecom authorities. Singapore's Temasek Holdings, which holds a majority stake in Shin Corp, the parent company of AIS, is a major shareholder in SingTel.

-- The Nation 2011-02-02

[asiawatcher]

"... AIS faces potential damage claims of Bt73 billion from the state telecom authorities. Singapore's Temasek Holdings, which holds a majority stake in Shin Corp, the parent company of AIS, is a major shareholder in SingTel."

Can anyone clarify this ? Temasek is a major shareholder in both SingTel and by association, AIS. So why is SingTel here if there is a potential 73Bn law suits that will affect shares? Weird...