Policy, Directional Framework, and Approach of Assets Capitalization in Brief

Source: Assets Capitalization Bureau (PO) (http://www.plangsinsap.or.th/)

1) Purpose of assets capitalization:

1. To restructure the system, to accelerate the issuance, and to review the authentication of rights, contracts, and permits.
2. To create opportunity for the holders of assets, rights and permits to access to capital source with focus on minor holders and small business.
3. To improve assets valuation system and database.
4. To create system and mechanism of property and assets management for economic benefits.

2) Assets include:

1. land and land embedded assets
2. renting rights
3. rights to use public land
4. intellectual property
5. machine

3) Policy, Directional Framework, and Approach

1. Accelerate and verify the issuance of land rights, renting rights, and authorization papers.
   • -  Sort-term objectives include;
     • v 10 million rai of Sor Por Kor 4-01 land title deeds
     • v 1.5 million rai of Sor Kor 1 land title deeds pre-emption certificate
     • v 2 million rai of Nor Kor 1 Kor Sor Nor 3 land title deeds
     • v 22,000 Bangkok market renting rights
     • v 90,000 rai of land under government asset
     • v 2 national parks
     • v a number of Nor Sor 3 land title deeds
   • -  Set the dead line to declare pre-emption certificate and Sor Kor 1 rights to accelerate the issuance of land rights.
   • -  Improve map and collateral information with the following standards;
     • v Use aerial view map as map database
     • v Use 1:4,000 scale map as a guide line
     • v By-piece land map to have same technical standard as Nor Sor 3 Kor
     • v Verify boundary of very type of state own land
     • v Create framework for map collateral information for valuation purpose
     • v Hire private entity in the case that government doesn’t have enough resource
   
   
2. To have fair and accurate asset valuation
   • -  Initial asset valuation to be done with the following guidelines by government department responsible for the asset
     • v consult with financial institution and expert to find settlement for valuation of each asset category
     • v take embedded assets to consideration when valuate land
     • v since intellectual property is a new subject, evaluator should set up pilot project for valuation
   • -  Set up benchmark, or hire a consultant if necessary, for evaluating assets which normally difficult to valuate, such as agricultural lands, renting rights, and intellectual property
   
   
3. Set up out-of court settlement system
   • -  Settlements are to be done by the agencies responsible for each issue by acting as a clearing house using method which agreed upon by financial institution
     -  Risk responsibility agreement with financial institution is to be done with the following guidelines;
     • v financial institutions are responsible for short-term risk and non-investment purpose debt
     • v Right holders are responsible for mid-term and long-term debt, which benefit their business
     • v Financial institution and department responsible for each issue are to work together in solving problems
   
   
4. Set up central database
   • -  Department responsible for each asset is to work in conjunction with government bank to maintain and digitize information
     -  Ministry of ICT and Assets Capitalization Bureau are to design the system
     -  Assets Capitalization Bureau is to focus on tracking and valuate the information distribution and connection with PMOC at the initial stage
   
   
5. Set up agreement with financial institution
   • -  Government financial institution is to be a pilot office by;
     • v Bank for Agriculture and Agricultural Cooperative is to responsible for lands
     • v IFCT and Small and Medium Enterprise Development Bank of Thailand are to responsible for machines and intellectual properties
     • v The Government Saving Bank, Government Housing Bank and Krung Thai Bank are responsible for renting rights and other authorizations
     -  If financial institutions interest in other types of asset, they can do so under their authority
     -  Government financial institution is responsible for preparing budget and training valuation personnel
   
   
6. Laws and regulations revision
   • -  Avoid short-term revision of regulations but concentrate on the revision of regulations to facilitate documentation, access to capital sources, and bad debt settlement
     -  Regulations which should be considered might include;
     • v Bangkok Metropolitan Administration and Department of Local Administration are to consider the regulations on rights to use public land.
     • v Treasury Department and other departments are to revise the renting right.
     • v Cooperative Promotion Office and Department of Social Development and Welfare are to accelerate document issuing process
     • v Many departments are to revise regulations to facilitating the transferring of land right and renting right
     • v Department of Lands is to issue certification papers for Sor Kor 1 land deeds and pre-emption certificate
     • v Department of Intellectual Property is to revise regulation on certifying intellectual property which is not covered by law.
     • v Financial institutions are asking for the consideration of expanding the regulations on debt provision and Business Assurance Act
   
   
7. Set up the action plan
   • -  Government departments are to propose action plan for year 2004, five year plan, as well as pilot project (if any), to The National Committee on Assets Capitalization and  The Assets Capitalization Management Committee.
   
   
8. Initiate long term policy studies
   • Land
   • -  system of land rights to reduce the types of rights
   • -  land tax and surcharges according to size and utilization
   • -  government can lease land for sub-leasing to the landless
   • -  Improvement of land management agencies as well as land and property valuation
   • Other assets
   • -  Set up central system for assets valuation
   • -  feasibility of setting up secondary markets
   • National wealth valuation
   • -  valuation of capital stock