The dream of a national shipping fleet has collapsed for the time being after the Thai Shipowners Association decided to relinquish the right to buy into state-owned Thai Maritime Navigation Co.

Association President Sumate Tanthuwanit said the association cancelled the shareholding plan because no investors were interested in the conditions of the joint venture, WorldSources Online Inc. reported.The association said the package proposed was inappropriate and failed to interest local shipping lines because the business environment has changed dramatically, both domestically and throughout the region.

However, the association has asked TMN to retain the shipowners association's option to purchase new TMN shares if the joint venture conditions are adjusted.

Sakdi Rattarangsi, the association's secretary, said shipping lines are reluctant to participate in a national fleet because several major conditions are still to be settled.

Mr. Rattarangsi said there are questions about the return on investment for the private sector and two major state clients of TMN - the Petroleum Authority of Thailand and Electricity Generating Authority of Thailand - have yet to finalize their equity stakes.

In principle, the Petroleum Authority of Thailand is to hold a 10 percent stake in TMN but has made no commitment that the national shipping line would have the exclusive right to handle the petroleum authority's sea freight.

The Petroleum Authority of Thailand previously agreed to hold a 12 percent stake, but it will need some time to take up the holding because it must be held by one of its subsidiaries. It has not informed TMN of its plans even though the joint-venture contract is scheduled to be signed on Jan. 20.

The Thai Shipowners Association recently met with a TMN subcommittee to discuss the conditions and additional shareholder investments.

The state agency aims to issue 140 million shares to increase its registered capital to 1.5 billion baht ($28 million).

The state would retain a 55 percent stake while local shipowners would take the remaining portion.

Prior to a further share issue, the company is to pay 98 million baht in financial returns to its existing shareholders and employees.

''Most shipowner members are not certain of the direction they will take and the deadline for the contract agreement is too soon,'' Mr. Rattarangsi said.

He said the shipowners would have more confidence in the deal had the state company clarified the conditions involved and coordinated between the association, the Petroleum Authority of Thailand and the Electricity Generating Authority of Thailand.

The national shipping fleet was initiated by the Chavalit Yongchaiyudh government in an attempt to boost foreign exchange earnings by increasing the competitiveness of local shipping lines.