Italian-Thai closer to Bangkok’s Purple Line trackworks contract

Construction News

Italian-Thai Development steps closer to win the Purple Line’s trackworks contract worth over Bt3 billion, on the confirmation from financier Japan International Cooperation Agency (Jica) that its competitor – Sino-Thai and ASV Joint Venture – is disqualified.

The contract for the 23-km trackwork from Bang Yai to Bang Sue has been delayed for over a year, believed to be a cause of conflicts among top executives at Mass Rapid Transit Authority of Thailand (MRTA).

Peerayuth Singpatanakul, a deputy governor of MRTA as chairman of the trackwork contract bidding committee, said yesterday that Jica has confirmed that Sino-Thai and ASV Joint Venture is disqualified and that the Thai agency should proceed with the consideration of ITD’s financial proposal.

At the meeting on May 11, the bidding committee resolved to follow Jica’s advice. This decision would be notified to the MRTA board of directors at today’s meeting, he said.
This is the sixth contract of the Purple Line. It was announced on May 18, 2011 that only two companies bid for the contract. The signing was originally extended to take place within July for construction in November in the same year. From altogether eight contracts, all have been awarded, except this. It remains unclear why MRTA has delayed the decision to proceed with the bidding and had to seek Jica’s opinions twice.

It is now feared that the cost of the project would rise, particularly when construction materials prices are going up after last year’s floods. MRTA sets the median price for this contract at Bt3.663 billion.
In a letter from Jica to MRTA obtained by The Nation, the Japanese agency said “We are pleased to confirm that Sino-Thai and ASV Joint Venture is disqualified as previously notified to you through our letter dated October 12, 2011… Even though only one bidder (Italian-Thai Development) is technically qualified, it is considered that competition is regarded as existing, and in such a situation, the Envelope No. 3 (financial proposal) of Italian-Thai Development should be opened as soon as possible.
Chief representative Kazuhiro Yoneda also referred to a similar case in the past concerning a government project, which was also funded by the agency. Then, the project received only one bid, but considering that the project was open to bids and that competition existed, the signing took place.

“The delay of trackworks contract execution may cause the increasing of government’s financial burden incurred, eg commitment charge as well as may affect to other project contracts such as M&E contracts. Therefore, these impacts are not advantage to MRTA and other parties concerned in terms of cost and time.

“Your prompt decision on this matter would be highly appreciated in order to avoid any delay of execution of the contract.”
The delay followed the opinion of the bidding committee, then chaired by MRTA deputy governor Chaiyasit Khururat, that both ITD and Sino-Thai consortium passed the technical test. Jica later said ITD was the only bidder qualified on the technical front.

Jica’s opinion encouraged then acting governor Ronnachit Yaemsa-art to set up a disciplinary committee to investigate Chaiyasit. The MRTA later ruled that to avoid conflict of interest, as both Ronnachit and Chaiyasit were running for MRTA’s presidency, they were appointed advisors instead. Chaiyasit’s role in the bidding committee was also transferred to Peerayuth.
Chaiyasit dropped his application for the presidency. Though the MRTA board later approved his presidency, the Transport Ministry has not yet sought the Cabinet’s approval, pending for the disciplinary committee’s investigation. The wrangling has been criticised as a factor to have delayed the sixth contract.


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