PTT pipeline deal facing questions
Activists find flaws in legal interpretation
The government should revoke PTT's rights to its natural gas pipeline in light of last month's Supreme Administrative Court ruling, according to civic groups.A panel discussion held yesterday at Thammasat University on the court ruling questioned the government's narrow reading of the court verdict.
PTT has agreed to transfer some 400 kilometres of land-based pipeline and equipment worth around 15 billion baht to the state to comply with the verdict. PTT would also be liable to pay future rent to the government to use the pipeline, as well as back rent dating to its privatisation in October 2001.
But most of the pipeline network running underwater through the Gulf of Thailand was seen by PTT and the government to be unaffected by the ruling.
Energy researcher Chuenchom Sangarasri Greacen questioned the state's interpretation of what constituted ''national assets''. The land-based pipeline accounted for just a fraction of PTT's total network, which includes 1,384 kilometres of land-based pipeline, 1,369 km of underwater pipe and a 770-km distribution network.
Ms Chuenchom noted that river banks, waterways, highways and lakes were defined by law as national property.
Under the PTT Act, the majority stateowned company appeared to have autonomous authority over land used for land and sea pipelines and drilling stations.
''PTT [when a state enterprise] had autonomous power in laying gas pipelines in areas that is considered to be public property. Why have PTT's rights over public land now become privately owned ones?'' Ms Chuenchom asked.
She said the government should also consider reclaiming rights to the 227-kim stretch of pipeline running in Thai territory now under Trans Thai-Malaysia (TTM), the 50:50 joint venture set up by PTT and Malaysia's Petronas to transport natural gas from the Joint Development Area in the lower Gulf of Thailand.
Price formulas that set PTT returns at 16% to 18% for pipeline operations were also excessive, resulting in lower risk and costs for the firm and its shareholders at the expense of consumers.
PTT, the largest listed company on the Stock Exchange of Thailand, is also one of the most profitable, with ninemonth net profits in 2007 of 73.3 billion baht on revenues of 1.09 trillion.
''PTT enjoys high margins in its role as a middleman for trade in natural gas. The Electricity Generating Authority of Thailand should be able to purchase directly from producers, which would help reduce power costs by 3.5 billion baht per year,'' Ms Chuenchom said.
Pranee Tinakorn, a Thammasat economist, agreed that authorities had failed to revoke state authority from PTT after its privatisation, despite being legally obliged to do so within one year of the initial public offering.
''There has never been a separation of the gas pipeline from PTT. And there remains the use of state rights [by PTT] with the public assets,'' she said.
Prof Pranee questioned how PTT's control over seabed pipelines could be deemed to be in the public interest.
''Let's say Bill Gates wants to build a home in the sea. Would he be allowed to do it? Then how is it that PTT, as a private firm, is allowed to do so?'' she asked.
Academic Sarinee Achavanuntakul said the government should impose price ceilings on PTT to prevent the company from passing on rental fees to consumers.
PTT shares closed yesterday on the Stock Exchange of Thailand at 348 baht, up 12, in trade worth 2.64 billion baht.