Corruption in Deal for U.S.-Made Dredgers by Phairath Khampha 29 September 2001 Thailand's Prime Minister Thaksin Shinawatra ordered the Transport Ministry to discipline officials involved in a state contract to import dredgers from the United States worth two billion baht (1 US Dollar = 44.51 Thai Baht), saying there was clear evidence of corruption. Cabinet on September 4, 2001 was informed of a two-year delay in the Harbour Department's purchase of three dredgers from the US. The department contracted Ellicott Machine International Corp to build them. Mr Thaksin said the department had paid over 80% of the contract value but the contractor had completed less than 50% of the work. The contract was adjusted to reschedule instalments and work acceptance in favour of the contractor, who handed large somes of money over to the officials responsible for administering the contract. The 'delay' had been worked out in advance in backrooms as the pretext for handing over the payments as 'rewards' for handing the contract to the company.. "The corruption is so obvious. No sane person would have committed such a big mistake," the premier said. He ordered Deputy Transport Minister Pracha Maleenond to set up a disciplinary committee to investigate and discipline corrupt officials immediately. The Transport Ministry had asked the National Counter Corruption Commission (NCCC) to look into the matter, but there has been no progress. Therefore, the ministry would have to handle the inquiry itself, he said. "Those officials responsible must be suspended. There are many officials involved," Mr Thaksin said. The premier agreed to maintain the dredger contract, as proposed by Mr Pracha. He said Thai authorities would have the dredgers completed and delivered and minimise the government's loss in the project. Asked if the corruption investigation would include any politicians, Mr Thaksin said procurement projects normally involved only government officials, but a corrupt politician could be tackled if there was enough evidence. "The investigation will go as far as it can. The culprits must be punished, no matter if they are government officials or ministers. The action will depend on evidence," he said. A cabinet source said on September 4 that Mr Thaksin was upset with the NCCC. "Why doesn't the NCCC speed up this probe as it did with my case? It is slow in handling corruption cases but quick in non-corrupt ones," the prime minister was quoted as saying in that day's cabinet meeting. The source said Mr Thaksin told Mr Pracha to speed up the investigation by a ministerial committee and publicise the progress regularly. This would help spur the graft commission into action. Deputy government spokesman Kuthep Saikrachang said the graft commission had been asked to look into the issue a year ago. Mr Kuthep said the premier wanted Ellicott to complete the dredgers. He told the Harbour Department to take legal action if necessary to implement the contract. He instructed the department to ask the Bangkok Bank, the project's guarantor, to work with the Export and Import Bank and the First International Bank of the US to force the company to honour its contract. Mr Pracha said on September 4 his fact-finding committee headed by Deputy Attorney-General Rewat Chamchalerm had found 13 senior transport officials of levels C-6 to C-10 involved in the irregularity. A transport source said those officials had played a role in accepting stages of work of the American contractor. The fact-finding probe found that some officials had lied that the contractor had made much progress in building the dredgers and deserved more instalments of the payment. The department had paid US$42 million of the US$49 million contract, but the dredgers were found to have been only 43% complete and were still lying at a dock in Louisiana. The C-10 officials involved were identified as Jong-arch Pothisunthorn, a former Harbour Department chief and currently deputy transport permanent secretary; Wit Worakupt, a former Harbour Department chief who has retired; and Vichet Rojanathamkul, transport inspector-general. The C-9 officials were Sunchai Kulprecha, deputy director-general of the Harbour Department, and Prawet Rakpaen, an expert of the department. The C-8 officials were regional Harbour officials Vichet Pong-thongcharoen and Itthipol Kan-chanakit, and Charnchai Chuenchoey, secretary to the department. The C-7 officials were Thiemjit Amart-yakul, Danai Sornpitak and Anant Srimakutpan. The C-6 staff are Vichit Rakpanit and Net Sajjawanit. The cabinet approved the procurement project on March 28, 1995, and the department signed the contract on Sept 30, 1997, when Wit Worakupt was the director-general of the Harbour Department, then supervised by former deputy transport minister Pinit Charusombat. Ellicott was contracted to complete three dredgers together with three tugboats and related facilities by September 1999. Since then, the contractor has regularly sought delays and exemption from fines from the Harbour Department, which was happy to accomodate as its officials received illegal payments.