I have seen illegal projects like that all over Thailand. Everybody around can see them, but they all know someone highly placed is involved.
And they all know it doesn't help and can be very dangerous to complain to the government officials.
For instance, there are villas on the beach at Dolphin Bay, south of Hua Hin. Everybody knows that you can not build on the beach.
But everybody knows the people involved are far too high placed to bother about the law. ...T.I.T.