When the State Meets Private: Gulf Energy and Thailand’s Political Economy

To power industry insiders, it was more than just an ordinary project. The sequence laid bare how one company had figured out — and cashed in on — the intersection of Thailand’s public contracts and private opportunity.

A Market Built on the State

Thailand’s power system is built around the idea of a single buyer. EGAT handles transmission and procurement; distribution, the domain of the Metropolitan Electricity Authority and Provincial Electricity Authority. Independent producers bid for long-term supply contracts, but once signed, the revenues are locked in for decades.

That model is very heavy on procurement rules. “If you could manage to get a PPA, your business model is kind of secured for 20 or even 25 years,” a former energy official told the Bangkok Post. “But, of course, it also means that the process has to be transparent as well, because the risks and benefits are carried by citizens.”

But transparency is precisely what critics say is too often missing.

The Hin Kong Exception

Projects like Hin Kong are one reason why. Gulf’s partnership was signed officially in January 2020, months after the state had already secured the contract. Not long after, the venture was awarded an LNG shipper licence, among the first private authorizations in the country. That authorization enabled Hin Kong Power Holding to bypass state procurement and directly import its own fuel, with prices indexed to an Asian spot benchmark (JKM).

The site has been receiving LNG-laden shipments with the first private-sector consignment docking at Map Ta Phut Terminal 2 on February 28 this year shortly before Hin Kong’s Unit 1 started testing. Gulf described the milestone as a leap for national energy security. Skeptics saw something else: a corporate player that would become one of the nation’s biggest utilities, reaping profits from both ends of the value chain — where fuel meets power generation — under rules designed for public utilities.

“It is not illegal,” said one Thai energy analyst. “But it blurs the line between state prerogatives and corporate muscle.”

From Gas to Phones

Gulf’s proximity to state assets extends beyond Hin Kong. The group took a 42 percent stake in PTT NGD, an arm of the state-owned PTT, three years later. No open tender was reported. In that same year, Gulf announced a merger with Intouch Holdings, the parent of Thailand’s largest telecoms player AIS. By March 2025 the deal had been approved by shareholders, with more than 99.7 percent in favor; it combined energy, infrastructure and telecommunications under a single corporate roof.

The acquisitions fall directly in line with Thailand’s national development priorities — gas security, digitalization and regional infrastructure. But for some, they are also a sign of a structural imbalance.

The political context matters. The cushion between capacity and peak demand, called the reserve margin, has been consistently above 30 percent in Thailand, compared with an international benchmark of around 15 to 20 percent. Analysts at Agora Energiewende put it at 36 percent in 2024, with estimates expanding to close to 50 percent in 2025.

That is because households and small businesses end up paying for power plants that go idle for much of the year. The 36.7 GW of peak demand the 2024 heatwave brought, smashing record consumption, provided an atypical reason. But in 2025, when demand fell, the costly excess capacity problem re-emerged.

The upshot: Gulf and a small number of other producers take their cut no matter what, and the cost is passed on to consumers.

Among those factors are Thailand’s ranking in Transparency International’s Corruption Perceptions Index, where it is currently 107th out of 180 countries and territories (with a score of just 34/100 last year). Amid such an atmosphere, even perfectly legal deals can smell of favoritism. Gulf’s remarkable track record in acquiring strategic assets — LNG licenses, gas pipelines, telecoms — may well be about foresight.

Or it may tell a perhaps less flattering story: of a political economy in which closeness to state power is the most reliable investment strategy.

More Than One Question

Gulf’s metamorphosis into a multi-sector behemoth has turned Sarath Ratanavadi into one of Southeast Asia’s most visible tycoons. His initiatives dovetail neatly with government road maps, from net-zero pledges to digital hubs. And that positioning has shielded the group from serious scrutiny at home.

But as Thailand seeks foreign capital and ESG funds, the calculus could shift. Global investors also are less accepting of blurred governance lines. And then the larger Gulf becomes, the more difficult it will be to uphold a model in which the public sector writes rules from which those very private players reap rewards.

It’s not a story about one company. It is about how Thailand handles the boundary of the state and market. Gulf Energy falls squarely on that boundary — for now, but the boundary is shifting in its favor.