ENERGY NATURAL GAS
Finance Ministry seeks fresh review of PTT pipeline rates
The Finance Ministry has rejected the Treasury Department's proposal on pipeline lease rates for PTT Plc. Finance Minister Chalongphob Sussangkarn said yesterday he would ask for a two-week delay from the cabinet today before finalising the lease.
''Some information remains unclear. We want to ensure fairness for both PTT and the Finance Ministry,'' he said.
Preliminary proposals for PTT to pay a 5% sharing arrangement based on pipeline transmission revenues of 3.6 billion baht per year were made from 2001 data, Dr Chalongphob said. ''We should reexamine the data and see if the information today is the same,'' he said.
PTT has warned that setting a high lease rate would ultimately result in higher energy costs passed on to gas users and the public. But a low rate would raise allegations of favouritism, even though PTT is 52% owned by the Finance Ministry.
On Thursday, the Treasury Department announced that PTT would pay 7.9 billion baht over 30 years for the use of gas pipeline assets ordered by the court to revert to state ownership.
The payments include 1.6 billion baht in retroactive rental fees and interest dating back to PTT's privatisation in October 2001. Lease rates are based on a 5% annual rent of PTT's estimated revenues of 3.6 billion baht from pipeline operations, adjusted by a 3% increment per year to account for inflation.
The preliminary lease rates proposed last week represented a rejection of PTT's call for compensation for its maintenance and operating expenses. The rates were modelled on a similar lease contract between Chulalongkorn University and MBK Plc for the land used by the Mahboonkrong shopping complex.
Officials said Dr Chalongphob wanted more detailed studies on PTT's estimated revenues from pipeline operations, even though the figures come from audits by the Auditor-General's Office.
The issue stems from the order last month by the Supreme Administrative Court that PTT must return ownership of gas pipeline assets based on land gained through expropriation when the company was a state enterprise. The affected assets have a value of about 15 billion baht and cover around 400 kilometres of land-based pipeline.
PTT had previously estimated that the rental charges that would have to be paid to the state in the future would be at least 5% of annual pipeline revenues.
Uncertainties about the court order's impact on PTT's assets and future revenues have depressed share values for the country's largest listed stock in recent weeks. While the ruling is unlikely to have a significant impact on PTT, which reported nine-month profits of 73.3 billion baht on revenues of 1.09 trillion, investors are concerned about the risk of new court challenges about the legitimacy of PTT's 2001 privatisation.
PTT shares closed yesterday on the SET at 334 baht, down 12, in trade worth 2.59 billion baht. Over the past month, PTT has shed 2.81%, compared with a 1.4% decline in the main SET index.