Could an October Surprise Shift the Deadlocked Trump-Harris Race?

[webfact]

STREETWISE
First glimmer of reforms hits state-enterprise money pit
Achara Deboonme

BANGKOK: -- A few years ago I got the rare chance to meet with the chief of a Grade-A state enterprise. Off the record, he expressed anguish at the hierarchical structure of his organisation. He complained that, despite being the top executive, his power was thwarted by the board of directors. His subordinates listened more to the board, made up mainly of top government officials.

Government directives were also sent through the board of directors. Though the organisation's finances were falling into an abyss, his hands were tied, he said.

That state enterprise is now one of 12 earmarked for transfer to the proposed National State Enterprise Corporation. According to the corporation's mastermind, Banyong Pongpanich, the new control structure will increase their transparency and efficiency.

Speaking to The Nation, Banyong admitted there were several reasons behind the low efficiency of state enterprises. Political intervention was one. Importantly, these state-run businesses are not subject to the Trade Competition Act, meaning their operations are shielded. Some are tasked with generating revenue but at the same time offering social services. He shared several stories of past problems with the enterprises, which need to be addressed.

For example, Airports of Thailand - the monopoly operator of the country's six international airports - can offer a high return on assets simply because most of the land on which the airports are located was expropriated at a low price four decades ago.

AOT is a top pick among stock analysts, thanks to rosy finances that are directly linked to the number of tourist arrivals. Adding to its investor attraction is its high passenger-service charge, the fee that all travellers must pay for using the airport. Suvarnabhumi Airport, which sees about 70 per cent of all Thailand's by-air visitors, charges US$27 (about Bt945) per head - the second highest fee in Asia, behind only Tokyo's Narita, at $29.

Yet, lacking the spur of competition, Suvarnabhumi's commercial revenue is only 15 per cent of its total earnings, compare with about 30 per cent at other airports in the region. And that's despite the fact that there are shops at every corner.

Meanwhile the situation was bright a few years ago at the state-owned TOT and CAT Telecom, which sat on huge concession revenue from Advanced Info Service (AIS) and Total Access Communication (Dtac). Banyong estimates that, without such revenue, both telecom agencies would have shown combined annual losses of Bt12 billion-Bt14 billion.

Now, with the industry being liberalised and their monopolistic status being stripped away, doubts are growing over the competitiveness of the telecom duo. TOT currently employs an impressive 22,000 staff and last year chalked up Bt42 billion in revenue. AIS, with some 10,000 staff, last year posted Bt149 billion in total revenue.

The situation is even tougher at Thai Airways International, which enjoys no monopolistic power now that Thai skies are filled with international airlines. Twenty years ago, the global airline industry's average passenger load factor was only 65 per cent. But with the entry of low-cost carriers, that has risen to 78 per cent. In the second quarter of this year, THAI's load factor remained below 70 per cent, despite a rise from just above 60 per cent.

Notable is the fact that "business-as-usual" practices will no longer work in this situation. So perhaps it wasn't surprising that THAI president Charamporn Jotikasthira warned last week that the airline might miss its Bt180 billion revenue target.

The figures cited indicate the urgent need for reform at these state enterprises. The hope is that the holding company will kill the problems at their root and strengthen the 12 selected organisations.

The other 44 state enterprises will also come under stricter rules and have to show greater accountability. So far, the lack of a requirement to submit business plans has meant that no one can be held responsible. Their boards of directors - also dominated by government officials with little or no business experience - have never been evaluated.

Reform will take time, says Kulit Sombatsiri, director general of the State Enterprise Policy Office, adding that all factors need to be taken into account. That is a must at Bangkok Mass Transit Authority, the operator of public buses in the capital. BMTA is sitting on accumulated debts of about Bt100 billion but is hopeful that its new fleet of 3,000 gas-fuelled buses can turn things around.

Kulit is doubtful. The new fleet will cover just 20 per cent of all Greater Bangkok's bus routes. The remainder are operated by private companies. Meanwhile, government policy requires that the BMTA also operate free buses.

Kulit observes that, as the profitable routes are now dominated by private companies, new buses alone won't help the BMTA. Instead the routing must be adjusted while the government must clearly shoulder the annual Bt2-billion costs of providing free public buses.

"Comprehensive changes are a must, or else the BMTA will be burdened with huge debts that will mount until it eventually seeks a write-off. This cannot continue," Kulit said.

The situation of each state-run enterprise is indeed unique, and hence each requires a different strategy. The need for reform is especially urgent given the obvious fact that some of these organisations have difficulty finding capable leaders.

As Banyong put it, the reform of state-run companies is an endless process based on past and current situations, yet it must also respond to as yet unforeseen events to come. This is just the beginning.

I agree. First of all, with the check and balance system in place, the resulting transparency should help limit untoward political intervention and see to it that state enterprises are no longer so wasteful of taxpayers' money.

Now, let's see if the National Legislative Assembly will agree to this plan.

Source: http://www.nationmultimedia.com/opinion/First-glimmer-of-reforms-hits-state-enterprise-mon-30266761.html

-- The Nation 2015-08-18

[noitom]

What is a "Grade-A" Thai enterprise?

[worgeordie]

What is a "Grade-A" Thai enterprise?

The one that looses and wastes the least money?

regards Worgeordie

[billd766]

The problem with a state owned company is that there are no incentives to work hard, to gain customer satisfaction.

The employees get paid anyway and once you are established it takes an act of God and 2 miracles to get rid of you.

That is probably why there are so many inactive posts.

Having said that my internet comes from TOT and the local guys at Khampaeng Phet are great.

[elgordo38]

What is a "Grade-A" Thai enterprise?

The one that looses and wastes the least money?

regards Worgeordie

Scarrrrry.

[shirtless]

If there ru by a government you know they will lose money, to much dead wood doing nothing