Thread: Pollution Dept Wants Cut in 9Bn Baht Penalty

An article for those enrolled in Corruption 101...

Bangkok Post
November 25, 2014
Writer: Apinya Wipatayotin

The Department of Pollution Control will ask NVPSKG to reduce the 9.1 billion baht in compensation ordered by the Supreme Administrative Court (SAC) for the Klong Dan waste-water project.

Wichien Jungrungruang, the department chief, said he will discuss with the NVPSKG consortium to try and reduce the department's penalty. He said almost half of the ordered payment is a result of the 7.5% interest rate per year, and the department now wants the interest halted.

He also said he would discuss the penalty with the Ministry of Finance and that the department will file for 8.5 billion baht in compensation from three department officials who were involved in the case.

The SAC on Friday ruled in favour of NVPSKG and stated the department should pay the construction costs to NVPSKG as more than 98% of the project was complete. The court also said the contract between the department and the company was not nullified as the department had claimed.

The SAC ordered the department to pay the penalty to NVPSKG for the plant in Samut Prakan province, which originally cost 23.7 billion baht, within 90 days.

Mr Wichien said the case reflects failed governance.

"I hope it will not happen again. All projects must be carried out with transparency and without interference," he told a press conference yesterday. He said he will find out when NVPSKG, which now manages the plant, will transfer it to the department.

Natural Resources and Environment Minister Dapong Ratanasuwan said
the huge amount of money already spent on the project should not be in vain.

He said the ministry will find out whether it was worth investing more money to run the plant. The project's facts will be made public at the right time, and the culprits must be punished, he added.

Penchom Sae-tang, director of Ecological Alert and Recovery-Thailand, said the department must pay the fine and should also file a civil suit against Vatana Asavahame — the deputy interior minister at the time, who was convicted and given a 10-year jail term — and other officials for land fraud. Vatana fled Thailand before the court handed down the sentence.

Pollution Dept wants cut in B9bn penalty | Bangkok Post: news

Background info for the above article, if you have the time...

Bangkok Post Opinion Piece
November 25, 2014
Writer: Veera Prateepchaikul

On Friday, the Supreme Administrative Court handed down a devastating ruling that forces the Pollution Control Department to pay more than 9 billion baht to a private consortium known as the NVPSKG which was contracted to build the Klong Dan waste water treatment facility in tambon Klong Dan, Bang Bo district of Samut Prakan.

The court's verdict — which upholds an earlier ruling by an arbitrary committee and the Administrative Court — marks the latest damning phase of this shameful and corruption-plagued project which was once branded the "Mother of all corruption cases". (The infamous title has since been handed to the Yingluck Shinawatra government's rice-pledging scheme.)

The Klong Dan waste water treatment project provides a worthy study case for students learning how insidious and highly refined corruption is and how it works so that they learn all of the pitfalls and, hopefully, help in the fight against it.

This is a classic corruption case. It involves all of the trickery and chicanery that any crook could imagine and put into practice for the sole purpose of cheating the state and the taxpayer — no shame, no social responsibility, no conscience.

The Klong Dan case — like many other corruption cases, including the rice-pledging scheme — stands as a testament to the reality that corruption laws must be amended to make any graft charges exempted from the restrictions of the statute of limitations. Corrupt politicians and officials who flee from the country to seek a safe haven abroad must be put on trial when they return home, no matter how long they stay abroad.

Many readers, expatriates and locals, may have forgotten about the case or have scant memories of it — which is not surprising because it happened almost 20 years ago when the project was endorsed in 1995 by the Democrat-led government of prime minister Chuan Leekpai.

The following is some key background information that I would like to share with readers so that they can keep abreast of the case, know who the key players are and understand why the Klong Dan project is such a big disgrace to all of us, especially the people in Samut Prakan.

Three ministers were involved in the project — Suwat Liptapallop, then the science minister, Vatana Asavahame, then deputy interior minister, and Yingphan Manasikarn, then minister of natural resources and environment, who has already passed away.

The winning contractor was a consortium known as NVPSKG, which was made up of the following companies: Vichitphan Construction, which is owned by the Chavananand family; Seesaeng Karn Yotha, whose founder is Banharn Silpa-archa, the former prime minister who is now chief adviser to the Chartthaipattana party; Krung Thon Engineering, which is affiliated with Vichitphan; and Prayoonvisavat Karn Chang, which was founded by Visava Liptapallop, father of Mr Suwat.

These companies all have political connections and that is why they were awarded the contract.

The project was proposed to Mr Chuan's cabinet in 1995 by then science minister Suwat and was eventually approved. But the contract was signed by minister Yingphan Manasikarn in 1997 with the NVPSKG consortium.

The people in Samut Prakan, especially those in Bang Bo district who were to be directly affected by the project, learned about it only two years after — and it was then that protests started. Yet the project continued as the protests continued and occasionally turned violent.

In 2003, the protesters won the fight when then natural resources and environment minister Praphat Panyachartrak of the Thaksin I government ordered the suspension of construction and set up a fact-finding committee to investigate the project. The probe confirmed rampant corruption and the case was forwarded to the National Anti-Corruption Commission, focusing on the land acquisition by Vatana.

Initially, the project site was located in Samut Chedi and Phra Pradaeng districts. The waste water treatment facility was divided into two sections — one on the western side to accommodate waste from Samut Chedi, Phra Pradaeng and Suksawat Road, and the other on the eastern side to accommodate waste from Muang, Phra Pradaeng, Bang Pu and Bang Phli districts. The construction cost was estimated at 13.6 billlion baht, to be funded by a state budget, the Environment Fund and an Asian Development Bank loan.

Somehow, the PCD, probably influenced by politicians, changed the construction plan by shifting the site to Bang Bo district, changed the pipeline network from above ground to underground and decided to dump treated water directly into the sea. The cost of the turnkey project ballooned to 23.7 billion baht.

Why was the construction site shifted to Bang Bo district? This was the main focus of the NACC's probe, and it resulted in Vatana being sentenced to 10 years in prison by the Supreme Court's criminal division for political office holders. Vatana fled the country before the court announced the verdict and is still abroad.

The NACC detailed some of the tricks used to acquire 1,900 rai of land for the project which was later sold to the PCD. Villagers in tambon Klon Dan in Bang Bo were told to sell their land by brokers — at cheap prices of course. Those who failed to obey would find their properties completely blocked off by other people's.

In other cases, duplicate land rights documents were issued with the help of corrupt land officials for the same land plots owned by those who refused to sell, causing legal disputes that ended badly for the real owners.

Also, with the help of reluctant land officials, land title deeds were issued for public land, roads and khlongs. Special survey devices were bought, with state funds of course, to speed up land measurement in swamps so that land title deeds could be issued and legally sold to the PCD. For this process, several land officials in Samut Prakan were recruited to help to upgrade the land rights papers — namely Sor Kor 1 and Nor Sor 3 — into title deeds.

For the illegal services rendered to Vatana, two land officials were awarded a gold-plated Pong Suphan amulet each. I have no idea whether the Pong Suphan amulet was real or not.

Before the contract was signed in 1997, attempts were made to acquire a new land plot for the project. Front companies were set up for this purpose. First, the Muang Rai Lan Thong Company bought land from villagers at about 20,000 baht a rai. Then the land was sold to Palm Beach Development Company whose directors included a member of the Asavahame clan at 100,000 baht a rai. The land was then sold to Klong Dan Marine and Fishery for approximately 260,000 baht a rai.

No money was actually paid in these land transactions because the companies were all affiliated. The PCD bought 1,900 rai of land at about one million baht per rai. So you can see the ripoff.

About 14 billion baht has already been paid to the consortium with the rest to be paid as ordered by the court. A special budget will have to be allocated anyway. But, in the end, it is the taxpayers who will foot the bill.

So, what to do with the waste treatment facility which is almost complete? Experts point out the facility was designed to treat organic waste and not heavy metals which are the main threat from industrial waste. Also, activating the facility may spark off protests.

So, the likelihood is that the 9 billion baht is another payment we will have to shoulder in this corruption-plagued project. The Klong Dan waste treatment plant, like the Hopewell elevated railway project, will be abandoned and left as a testament of shame for us.

But the tragedy of this disgraceful corruption case is not just the wasteful spending of taxpayer money but the fact that we have not learned any lessons and we keep electing these crooks back into the parliament.


Vatana Assavahame, third from left, was convicted for bribery and sentenced to 10 years in prison. He showed
no remorse, and fled the country, showing up at a Buddhist temple China in a December, 2012, photo op.
(Photo by Nauvarat Suksamran)

Veera Prateepchaikul is a former editor, Bangkok Post.

Klong Dan, the 'mother of corruption' cases | Bangkok Post: opinion

And students, you must always remember, honor the wishes of your elders for they know what's best.

The Nation
November 27, 2014

Fifteen people including two national politicians will be sued for huge damages caused by the corruption-plagued Klong Dan wastewater treatment project.

The Pollution Control Department (PCD) will take legal action against the 15 - two national politicians, three local politicians and 10 civil servants - at the suggestion of the Finance Ministry's Comptroller General Department, according to a source familiar with the matter.

Last week, the Supreme Administrative Court ordered the department to pay Bt9.6 billion in compensation to the joint venture that built the plant before it was scrapped.

The Comptroller General has estimated that Vatana Asavahame, the former deputy interior minister accused of dealing with the project dishonestly, should be responsible for Bt4.5 billion in losses, plus US$36.4 million, the source said. Vatana is believed to have fled the country.

The Klong Dan project was partly funded by loans in US dollars borrowed from the Asian Development Bank.

The late former science minister Yingphan Manasikarn also was found to be responsible for damages of Bt3.8 billion, plus $30.3 million, the source said. Yingphan died in 2002 at the age of 65.

Civil servants deemed responsible include former PCD chief Pakit Kirawanit, his ex-deputy and another senior official who will be sued for Bt1.04 billion, the source said.

15 face legal action over Klong Dan losses - The Nation

Consortium receives first payment of compensation for Klong dan project

The Department of Pollution Control has paid the first tranche of 9.8 billion baht in compensation to NVPSKG consortium contracted to build the Kong Dan waste water treatment plant in Samut Prakan province as ordered by the Supreme Administrative Court.

Pollution Control Department chief Vijarn Simachaya said the payment made on November 21 was in accordance with budget disbursement procedure and as ordered by the Administrative Court.

Regarding a petition to the Administrative Court by a group of Klong Dan villagers to withhold the payment to the contractor, Mr Vijarn said his department’s first priority was to follow the court’s order.

He explained that if the department defies the court’s order, the consequence will be a loss of trust by the private sector toward the government.

The department, he said, is working with the Waste Water Management Organisation to determine how the waste water treatment facility can be put to use. However, he assured that the treated water will not be released into the sea as feared.

The treated water may be recycled for industrial or agricultural use, he said, adding that if this is rejected by the local people, the treatment plant may have to be left redundant.

Consortium receives first payment of compensation for Klong dan project - Thai PBS English News