Govt to fork out B9bn for Klong Dan

Construction News

The site of the suspended Klong Dan waste water treatment facility in Samut Prakan’s Bang Bo district. The Natural Resources and Environment Ministry has decided to pay nine billion baht to the NVPSKG consortium, the contractor of the multi-billion-baht project, months after the Supreme Administrative Court ordered it do so. (Photo by Pattarapong Chatpattarasill)

The Ministry of Natural Resources and Environment will find nine billion baht from its budget to pay the NVPSKG consortium, the contractor of the canned multi-billion-baht Klong Dan waste water treatment plant in Samut Prakan province, months after the Supreme Administrative Court ruled it to do so, a senior ministry official said yesterday.

Kasemsun Chinnavaso, the ministry’s permanent secretary, said that after rounds of post-court ruling negotiations, the consortium has agreed to waive the interest charge of 1.8 million baht per day ordered by the court last year which had raised the total payment to 11 billion baht.

Last November, the Supreme Court found the ministry culpable for not paying outstanding construction costs after the project was completed.

The ministry argued there were irregularities in the purchase of the land for the project and decided to suspend it.

Mr Kasemsun said the two parties to the dispute concluded the Pollution Control Department will pay the consortium the first tranche of three billion baht in May and the second tranche of six billion baht in November next year, adding the money will be allocated from all state-owned agencies’ fiscal budgets.

For example, the fiscal budget for the ministry’s Office of the Permanent Secretary was cut off by five million baht, followed by 25 million baht from the Office of Natural Resources and Environmental Policy and Planning and more.

“That is equivalent to the ministry’s fiscal budget five years ago when it was established. I think when you read the court’s verdict clearly, you will know why it ends like this,” he said.

He said the Supreme Administrative Court ruled on the case based on an arbitration committee’s previous finding, which said the department should pay the outstanding money to the consortium.

He said the ministry took the wrong track in fighting the ruling as it took the case to the arbitration committee.

Former environment minister Suwit Khunkitti decided to take the Klong Dan waste water treatment project to court and later to an arbitration committee.

The project was endorsed in 1995 by the Democrat-led government of prime minister Chuan Leekpai.

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

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

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 in 1997 with the NVPSKG consortium.

Natural resources and environment minister Praphat Panyachartrak of the Thaksin I government ordered the project suspended and set up a committee to investigate.

The probe confirmed rampant corruption and the case was forwarded to the National Anti-Corruption Commission, focusing on land acquisitions 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 handle waste from Muang, Phra Pradaeng, Bang Pu and Bang Phli districts. The cost was estimated at 13.6 billlion baht, to be funded by a state budget, the Environment Fund and an Asian Development Bank loan.

Later, the Pollution Control Department 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. About 14 billion baht has been paid to the consortium with the rest to be paid as ordered by the court.

Mr Kasemsun said the ministry would submit the conclusion to Deputy Prime Minister Wissanu Krea-ngam, who chaired a committee on the Klong Dan negotiations, adding Mr Wissanu will later submit the matter to cabinet.

Regarding the Klong Dan waste water treatment site’s future, he said he has assigned the Wastewater Management Authority to discuss with locals what they want to do with the site.

“If the locals are unhappy with the waste water treatment project, I see no reason to put more money into fixing the treatment system. But we still have a waste water pipe on the other side. We can go ahead with the plant if the locals agree with it,” he said.