Massive Corruption in Construction Award of Thailand's New Nong Ngu Hao Airport

by Phairath Khampha

19 March 2002

Panel finds fault with deal - Executives awarded contract illegally

Thailand's National Counter Corruption Commission found executives of New Bangkok International Airport Co and its consultant firm acted against the law in awarding a ground improvement contract in the Nong Ngu Hao airport project. A source from the anti-graft panel said an NCCC sub-committee found irregularities in the awarding of a contract to the Vichitphan-Krung Thon consortium for the landfill for roads in the airport. It cited the involvement of former NBIA managing director Somchet Tinapong, NBIA assistant managing director Anothai Paiteekul, and the Japanese-based Pacific Consultants International Co.

The final quote of the contract stood at 1.8 billion baht ($41.7 million) for a job which NBIA described as ground improvement for a road. It staged a bidding contest for the contract in April, 2000, and initially qualified five contenders for their technical bids. They were ITO, Maeda-Nopawong, Rojsin-Obayachi, Ch Karnchang-Bilfinger & Berger and Nishimatsu-Sino-Thai. Qualifiers had to make at least 70% of total scores for technical evaluation.

But PCI, as NBIA's project management consultant, later told NBIA to relieve the technical criteria to accept contenders with at least 60% of scores. The change qualified the Vichitphan-Krung Thon group, which eventually won the contract, with 65% of technical points.

The NCCC's investigation was prompted by a complaint from Sino-Thai Engineering and Construction (Stecon) consortium, which initially passed technical evaluation but was later disqualified for being subjected to a rehabilitation programme by the Bankruptcy Court. Anutin Charnveerakul, managing director of Stecon, said the NCCC's finding would not change the contract because it was discovered over a year later and the contractor was about to finish its task. This is despite the fact that the investigations revealed that PCI had arranged the collusions between the Vichitphan-Krung Thon group and the NBIA. The various parties involved received a kick-back from the Vichitphan-Krung Thon group.

``The state is the damaged party because it must unnecessarily pay 800 million baht more for the job. Who will take responsibility? The NCCC only considers punishment but is not the punisher,'' he said. His consortium proposed the lowest quotation at 1.03 billion baht.

In response, Mr Somchet said the NCCC had not finalised its ruling and he would clarify the issue later. This was to give the "guilty" parties time to arrange some sort of "restitution" to certain members of the NCCC to find favourably. He insisted the ground improvement project was "transparent" because the NBIA board scrutinised it carefully at least 10 times.

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