Cabinet OK B9.8bn ‘stupidity fee’ over Klong Dan plant

Construction News

This Aug 6 photo shows an aerial view of the unfinished, corruption-plagued Klong Dan wastewater treatment facility in Bang B district of Samut Prakan. (Photo by Pattarapong Chatpattarasill)

The cabinet on Tuesday approved a so-called “stupidity fee” of 9.8 billion baht to the consortium contracted to build the scandal-hit Klong Dan wastewater treatment plant.

The cabinet agreed to divide the payments to the NVPSKG group from the 2016 central budget into three instalments, as suggested by the Ministry of Natural Resources and Environment.

The first instalment of 40% will be paid Monday while the payments of 30% each are due on May 21 and Nov 21 next year, according to government spokesman Sansern Kaewkamnerd.

The consortium agreed to waive interest charges of 1.8 million baht per day ordered by the Supreme Administrative Court, which would have raised the total payout to 11 billion baht.

Of the total 9.8 billion baht, 7.9 billion will be paid in baht. The balance will be a payment of US$54.1 million.

The payout — lambasted by critics and Thai-media pundits as a “stupidity fee” — comes after the Supreme Administrative Court ruled for NVPSKG last year against the Department of Pollution Control over the failed Samut Prakan province wastewater project.

Work on the 23 billion baht facility in Bang Bo district was halted due to strong local opposition and fraud allegations in 2002 even though it was 95% complete.

On Tuesday, the cabinet said the ministry’s Wastewater Management Authority should look into ways of utilising the  Klong Dan facility to recover at least some of the taxpayer loss.

Prime Minister Prayut Chan-o-cha stressed that the compensation is being paid from public funds that should have been used to benefit the country.

“Gen Prayut emphasised that state budget must be used solely for public interest and the country should never shoulder the same burden again,” Maj Gen Sansern said.

Approved in 1997, the treatment project initially was designed as two separate plants to collect wastewater from two industrial zones. But plans changed, calling for one giant site at Bang Bo, requiring the acquisition of an additional 1,700 rai and construction of a 10-billion-baht pipeline.

Costs ballooned from 13.6 billion baht to 23.7 billion baht. There also were reports of irregularities in the acquisition of the land and construction contracts.

Area residents protested and won their fight and the pollution-control department scrapped the project and accused NVPSKG of contract fraud.

The consortium retaliated by filing a petition with the arbitration committee, demanding compensation.

In 2011, the committee ruled in the consortium’s favour, ordering the department to pay the joint venture damages as well as 7.5% in interest calculated from Feb 28, 2003. The department refused to pay and took the case to the Supreme Administrative Court, but lost.

Former deputy interior minister Vatana Asavahame fled the country before the Supreme Court’s Criminal Division for Political Office-Holders sentenced him in 2008 to 10 years in prison after finding him guilty of corruption in the case widely known as “the mother of all corruption cases”. His current whereabouts are unknown.