Pollution Control Department (PCD) loses Klong Dan court battle – Dept told to pay B9bn over waste project

Construction News

The Pollution Control Department (PCD) has lost its final legal battle over the Klong Dan Waste water treatment project and was ordered yesterday to pay more than 9 billion baht to a private consortium contracted to build the facility in Samut Prakan.

The defeat was handed down on the department by the Supreme Administrative Court which ruled yesterday it has to pay NVPSKG Joint Venture 9.1 billion baht for the construction work on the corruption-plagued project.

The ruling upheld the decisions of the Central Administrative Court and the arbitration committee ordering the department to pay NVPSKG Joint Venture.

The amount in question covers construction costs, compensation plus interest of 7.5% per year. The department is required to make the payments within 90 days.

Wichian Jungrungruang, the PCD director-general, admitted the department was unlikely to have any other choice but to pay the money to the consortium.

The department would have to consider ways of paying the huge amount of money to the firm now that the case has ended.

He said the department may have to seek the money from the government’s central budget since the department receives only a 500-million-baht budget per year, covering all projects and officials’ salaries.

He added that he would set up a committee to investigate officials who were involved with the case.

Regarding the Klong Dan waste water treatment plant in Samut Prakan province, Mr  Wichian said the department will look into how to proceed as the plant is now completed and has become the department’s property.

Previously, the department refused to take control of the waste water plant, citing that it had not officially signed to accept responsibility for the plant due to the legal case.

As a general practice, the department is required to report the matter to the Natural Resources and Environment Ministry, the cabinet and the Finance Ministry, Mr Wichian said.

The PCD signed a contract hiring NVPSKG Joint Venture to design and construct the waste water treatment facility worth 22.9 billion baht on Aug 20, 1997.

The project was mired in irregularities, including the sale of land to the department for the project at a highly inflated price.

In 2003, Apichai Chawacharoenpan, then director-general of the PCD, decided to scrap the contract and accused the consortium of contract fraud when construction work was about 98% complete.

The consortium filed a petition with the arbitration committee on Sept 4, 2003 demanding compensation worth 4.9 billion baht and US$31 million (1 billion baht).

In 2011, the arbitration 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, amounting to 9 billion baht.

The department refused to pay and took the case to the Administrative Court.

Suprawat Chaisamut, the department’s lawyer who is involved with the Klong Dan project, suggested the department could try to negotiate with the private consortium for a payment reduction.

But he admitted such an approach would not be easy as the legal case is over.

“I don’t exactly know how the department can avoid paying. The criminal case involving corruption in the project has nothing to do with the compensation case despite the fact that the court ruled in the department’s favour in the corruption case.

“But the department shouldn’t claim the corruption case allows it to delay payment without negotiation,” he said.

The Klong Dan project was initiated during the government of Chatichai Choonhavan. It dragged on until 1997, when the department signed a contract to hire NVPSKG to build the plant.

The cost of the project, which was initially estimated at 10.05 billion baht, increased over the years of its planning, designing, bidding and implementation.

On the corruption front, the department filed a criminal lawsuit against the consortium and 19 other people, including former deputy interior minister Vatana Asavahame, accusing them of corruption.

The Criminal Court ruled in Nov 2009 that Vatana and 10 other defendants including consortium executives, had colluded to sell public land to the department to fraudulently secure rights to the project.

Vatana was also sentenced in 2008 by the Supreme Court’s Criminal Division for Holders of Political Positions to 10 years in jail for bribing officials to obtain the land.

The scheme drew fierce protests from activists and residents who complained about environmental concerns and a lack of transparency.

Source: http://www.bangkokpost.com/news/politics/444709/pcd-loses-klong-dan-court-battle