Court revokes arbitration order of Klong Dan wastewater treatment plant

Construction News

The almost completed Klong Dan wastewater treatment facility remains in tambon Klong Dan of Bang Bo district, Samut Prakan

Court revokes arbitration order of Klong Dan wastewater treatment plant

B6bn Klong Dan water plant damage erased

The Central Administrative Court on Tuesday revoked the arbitration order demanding the Pollution Control Department pay 6 billion baht in compensation to the builder of the Klong Dan wastewater treatment plant.

The court rejected Vichitphan Construction Co and partners’ demand for compliance with the arbitration order for payment of 4.98 billion baht and US$31.03 million, plus interest.

The Pollution Control Department (PCD) challenged the arbitration order and cited rulings from the Supreme Court’s Criminal Division for Holders of Political Positions, the Dusit district court and the Criminal Court. It argued the implementation of the project was illegal and cited favouritism toward the NVPSKG consortium.

NVPSKG stands for North West Water International Co, Vichitphan Construction, Prayoonviskarnchang Co, Seesaeng Karn Yotha Co, and Krungthon Engineering Co Group.

The Central Administrative Court said North West Water International cited the strong financial status of its parent North West Water Group without any proof the parent company would jointly take responsibility for the project.

Pollution control officials failed to verify the fact, and that was considered favouring the consortium.

The court also said the PCD moved the project site about 20 kilometres away from the site originally proposed by a consultant, driving up the project cost. The decision favoured Klong Dan Marine & Fishery Co, which offered to sell the land for the new site.

The court said the company had an administrative and financial connection with a partner in the consortium.

PCD officials also changed the terms of reference, which consequently led to the disqualification of the other contender for the project, Marubeni Co, and left the land offered by Klong Dan Marine & Fishery Co as the only available site. The land was under the control of NVPSKG.

The Office of the Attorney-General scrutinised the project contract and wanted NVPSKG and North West Water International to share responsibility for the project under the terms of the contract, but PCD officials instead changed it to exclude North West Water International.

PCD officials also had Vichitphan Construction sign the contract on behalf of NVPSKG and North West Water International although its parent company had revoked its letter of authorisation.

The court considered this another favour to the consortium.

Later, an inexperienced company was allowed to replace North West Water International in the consortium.

Due to these irregularities, the contract had no obligatory power and the arbitration order could be revoked, the court said.

Klong Dan, which has been dubbed the “mother of all corruption cases”, dated back to 1995 when the cabinet first approved two water treatment plants in Samut Prakan. The construction cost ballooned from 13.6 billion baht to 22.9 billion baht, mainly because of the inflated cost of 1,900-rai land in tambon Klong Dan of Samut Prakan’s Bang Bo district, illegally acquired earlier by the project’s well-connected backers.

Vatana Asavahame, a former deputy interior minister, was sentenced to 10 years in jail for bribing officials to issue title deeds to him for public land that was later sold to the project. He fled the country in 2008.

The PCD has been fighting the previous order to pay compensation for termination of the contract when the work was 98% complete. The plant is still not operating and it is not clear whether it will ever be put into service.

The lengthy investigation into the Klong Dan mess also ensnared three former PCD officials, who were sentenced to 20 years’ in prison in December 2015.


Leave a Reply