Thailand's plans to liberalise its electricity sector are likely to be delayed by up to four years according to consultants Brooker Group. As a result a competitive power pool may not be implemented until 2007.
The Electricity Generating Authority of Thailand (EGAT) has requested that the government delay introduction of the pool, claiming that it is not yet ready. It is believed that the government agree with EGAT. It may also try to cap foreign holdings when restructuring does take place.
The unions in Thailand are also unhappy at the privatisation plans. They view the British experience, where there were massive job cuts in the electricity industry during the 1990s, with alarm. In Thailand, IPPs employ around one third of the industry workforce.
When restructuring does finally take place, EGAT's generating assets, worth an estimated $2.5 billion, will be very attractive to foreign investors. The state company is likely to retain control of its hydropower facilities, which are important for irrigation as well as power generation, but all other plants are likely to be sold.
EGAT owns 70 per cent of Thailand's generating capacity, now close to 22 000 MW. Hydropower accounts for 10 per cent of this. However a recent move by the government ahead of liberalisation of the telecommunications sector limited foreign ownership of companies to 25 per cent instead of 49 per cent. The government may do the same with the power sector, analysts believe.
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