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Finance urges lawsuits over concessions
Nov 18, 2009 (Bangkok Post - McClatchy-Tribune Information Services via COMTEX) --
The Finance Ministry will propose that cabinet ministers pursue legal action to recover 138 billion baht in damages suffered by the two main telecom state enterprises as a result of amendments made in nine concession contracts with the private sector over the past several years.
The damages include 87.39 billion baht suffered by TOT Corp through its mobile phone concession with Advanced Info Service, the country's largest mobile operator.
The estimated losses to TOT exclude potential losses under four other concessions: the 2.6-million Bangkok fixed line contract with True Corp, a 1.5- million provincial fixed line concession with TT&T, a fibre-optic network contract with Comlink, and a submarine cable contract with Jasmine, according to documents obtained by the Bangkok Post.
CAT Telecom, meanwhile, is estimated to have suffered 50.64 billion baht in damages through four concessions, including 20.4 billion as a result of its operating agreement with Total Access Communications (DTAC), the country's second-largest mobile operator.
Damages for CAT include another 18.72 billion baht in projected losses from its Digital AMPS project with Hutchison Telecom, 7.938 billion from its Digital PCN 1800 concession with True Move and 3.55 billion from a PCN 1800 concession with Digital Phone.
The 138-billion-baht loss estimate excludes another estimated 40 billion in excise tax payments made by TOT and CAT on behalf of its private concessionaires, as well as another 14 billion paid by the state in the form of access charges.
Finance Ministry officials note that the Council of State previously ruled that the concession amendments made by TOT and CAT Telecom failed to comply with screening regulations set under a 1992 law governing public-private ventures.
The ministry argues that the amended concession terms should be voided and both TOT and CAT Telecom allowed to collect estimated damages based on the original terms of the contract.
The State Enterprise Policy Office, which is responsible for overseeing state enterprises, argues that the legal problems regarding the concessions should be addressed and corrected to protect the public interest.
One Finance Ministry official noted that both TOT and CAT Telecom had been slow to take action regarding the concession amendments, but instead had called on the Information and Communications Technology Ministry to take the lead on the issue. The ICT Ministry has also been slow to tackle the problem.
Sources said TOT and CAT Telecom may be reluctant to revisit the issue of the concession amendments due to their own culpability in agreeing to the changes over the past several years.
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http://www.bangkokpost.com. Copyright (c) 2009, Bangkok Post, Thailand
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