Allegations of unfair competition in bidding for the Orange Line’s western expansion
As much as it wants to speed up the construction of mass transit systems in the city to alleviate traffic congestion, the government needs to clear allegations of unfair competition in bidding for the Orange Line’s western expansion.
The accusation came to light last month when the House sub-committee on large-scale infrastructure projects accused the Mass Rapid Transit Authority (MRTA), the state body which oversees the bidding for city mass transit projects, of encouraging unfair competition.
The Anti-Corruption Organization of Thailand (ACT), the anti-graft watchdog, is urging the government to look into the allegations. They said the unfair bidding could cost the government about 68 billion baht in losses. This city train has been delayed partly because the MRTA cancelled the first round of bidding when it decided to change the bidding conditions.
According to ACT, if the first round of bidding was not cancelled, the Bangkok Mass Transit System Plc (BTSC) would have won the concession. With this bidder, the government would have been required to pay 9.67 billion baht to subsidise the project.
The MRTA however, awarded the concession to Bangkok Expressway and Metro Plc (BEM) in the second bidding round. With BEM, the government will have to pay subsidies of up to 78.28 billion baht, or 68.6 billion baht more.
MRTA launched the first bidding round in July 2021. BEM, BTSC and Sino-Thai Engineering and Construction plc submitted tenders for the western section. Whoever wins the Orange Line tender will reap significant benefits because the route will connect with the major rail network in the capital city.
The 120-billion-baht western section will run from Bang Khun Non in the Thon Buri area to the Thailand Cultural Centre station and link the eastern section, still under construction, to Min Buri.
Problems arose when the MRTA changed the bidding criteria by adding a technical score worth 30% to the requirements despite it having already sold the bid envelopes. The new criteria means the winner might no longer be the one who offers the lowest price.
The BTSC, which was thought to be the presumptive winner for offering the lowest quotation, petitioned the Central Administrative Court, saying the MRTA’s new bidding terms were unfair. The BTSC also asked the court to issue an injunction to suspend the bidding. The court rejected its petition.
The MRTA then cancelled the first bidding round and promptly held a new auction. In the second round, two investors submitted tenders. The first was BEM, and the second was the ITD Group, a joint venture between Italian-Thai Development Plc (ITD) and South Korea’s Incheon Transit Corporation.
BEM finally won the bidding with its offered price which requires a state subsidy of up to 78.28 billion baht while the ITD Group required a subsidy of as much as 102.63 billion baht.
The disparity in the subsidy money which the government has to pay as much as 68.6 billion baht raises questions about the MRTA’s decision-making process and transparency. Needless to say, MRTA owes the public an explanation.
People are fed up witnessing the government repeatedly using taxpayers’ money to cover hefty sums for such questionable bidding projects. The probe must include civic groups, such as consumer groups and academics, and a graft-busting group also must be allowed to participate in the scrutiny.
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