EGAT privatization prevented by court

23 March 2006 – Thailand’s state owned power company, EGAT, looks set to halt the construction of new domestic power plants and suspend its investment plans abroad after a Thai court ruled that its privatization plans were illegal.

In response to a petition it received last November, the court nullified two government decrees that gave consent for EGAT to pursue with plans to sell 25 per cent of its assets to private investors.

The petition was filed by 11 civic groups that feared partial privatization would result in price hikes and would ultimately be detrimental to national assets.

The court ruled that the government had broken several regulations by commencing with plans to privatize the company, including allowing a member of the privatization committee with potential conflicting interests.

Before the ruling was given, EGAT’s chief executive had warned that if the privatization was stopped the company would be forced to withdraw foreign investment and cut back with infrastructure improvements.