Court overturns massive compensation ruling for Klong Dan project

By The Nation

 

File photo: Klong Dan wastewater treatment

 

THE CENTRAL Administrative Court has nullified an arbitration panel’s ruling for the Pollution Control Department (PCD) to pay multi-billion-baht compensation to a group of privately-owned companies in connection with the failed Klong Dan wastewater treatment scheme near Bangkok.

 

Based on the arbitration panel’s 2003 and 2011 rulings, the PCD was earlier required to pay compensation of Bt4.98 billion, and another US$31 million (Bt972 million) plus 7.5 per cent annual interest, to Klong Dan Marine and Fisheries Co and the NVPSKG joint venture. 

 

The ruling was made in accordance with the Klong Dan wastewater treatment project’s contract, which was approved by the Banharn Silapa-archa government in 1997. However, the PCD later petitioned the Central Administrative Court to review the case on the grounds of new evidence emerging from subsequent verdicts issued by the Supreme Court, Criminal Court and a lower court showing that the whole project had been deemed unlawful because it violated multiple relevant laws.

 

Former officials of the PCD were also accused of violating state rules and regulations and a Cabinet resolution with regards to the procedures for selecting qualified bidders and contractors for the massive project, as well as the project’s land procurement.

 

The contract’s wording, which was approved by the Office of Attorney-General, was also illegally changed.

 

These unlawful acts resulted in significant damage to the state. However, Klong Dan Marine and Fisheries Co and the NVPSKG joint venture would stand to benefit by claiming massive compensation from the PCD via the arbitration panel set up to settle disputes between government agencies and private companies.

 

As a result, the Central Administrative Court said it had the authority to nullify the arbitration panel’s earlier ruling, which favoured the private companies at the expense of the state, in order to maintain law and order.

 

Conspiracy alleged

 

The corruption-ridden Klong Dan wastewater treatment scheme was approved in 1997 when Banharn Silapa-archa was prime minister. Several former politicians were involved in the controversial scheme, which was situated in Samut Prakan province near Bangkok.

 

A former minister, Wattana Asavahem, was sentenced to a 10-year jail term for violating the Criminal Code while in office in connection with issuing unlawful land title deeds used in this scheme. He remains a fugitive.

 

New evidence from court verdicts showed that former politicians and businessmen as well as PCD and other state officials conspired to cheat the state in the scheme and attempted to force the government to pay massive compensation to the companies, which were controlled and owned by them.

 

The Central Administrative Court also said the PCD had the right to ask the court to review the case since it was directly affected by the arbitration panel’s ruling.

 

Court spokesman Pravit Boontiem said the private firms had 30 days to lodge an appeal with the Supreme Administrative Court.

 

Source: http://www.nationmultimedia.com/detail/national/30340348

 

-- © Copyright The Nation 2018-03-07

Klong Dan - the project that continues to run and run, even though it "had been deemed unlawful because it violated multiple relevant laws" and was widely recognised to be "corruption ridden" from top to bottom, conception to end point of utter failure in its objectives. What the article fails to mention is that it was financed through an Asian Development Bank loan and was signed off and approved as a first rate public-private partnership problem by a raft of foreign consultant "experts", all of whom should also have been made to face the music of a Thai court, but seemed to all vanish into thin air, when the shit hit the fan. That these corrupt companies could even consider that they deserved compensation is utterly beyond belief, but at least the Central Administrative Court has come to the correct decision over this. The real losers in this case are the locals who lost their mangrove swamp and fishing grounds, along with the entire Thai public who have ultimately bankrolled this mega-disaster of a project. 

2 hours ago, webfact said:

review the case on the grounds of new evidence emerging from subsequent verdicts issued by the Supreme Court, Criminal Court and a lower court showing that the whole project had been deemed unlawful because it violated multiple relevant laws.

 

Former officials of the PCD were also accused of violating state rules and regulations and a Cabinet resolution with regards to the procedures for selecting qualified bidders and contractors for the massive project, as well as the project’s land procurement.

 

The contract’s wording, which was approved by the Office of Attorney-General, was also illegally changed.

what a classic <deleted> up; looks to be boiling down to : who is less in the wrong

At the end of the day, the state approved a multi billion baht agreement. The project was honoured and 98 percent complete, when the state reneged on their agreement  "Again ".

No different from the buses that they ordered, then reneged on and ordered different buses. 

Or the goldmine contract, reneged on. 

The corruption and irregularities are other issues. 

It's like eating most of the meal at a restaurant, then refusing to pay because the waiter brought the wrong food. 

The Thai government is going to become known as someone that wriggles out of their contracts .

Companies are going to think twice about accepting large state contracts, and should have 50 clauses in regards to the state backing out of promises. 

The first clause should be, if state officials are negligent , the state will continue to honour their financial obligations if a project is 80 percent complete. 

3 hours ago, webfact said:

The contract’s wording, which was approved by the Office of Attorney-General, was also illegally changed.

In retrospect ? 

[THE CENTRAL Administrative Court has nullified an arbitration panel’s ruling ......]

 

Normally an Arbitration is the final legal step to settle a dispute. That's the whole point of having an Arbitration in the first place. 

 

So how come that in this case the Arbitration panel's decision could be over ruled?

8 hours ago, webfact said:

the Central Administrative Court said it had the authority to nullify the arbitration panel’s earlier ruling, which favoured the private companies at the expense of the state, in order to maintain law and order.

Since when is an illegal breach of contract whose terms were reviewed and approved by the Office of the Attorney General necessary to maintain law and order?

 

I would like to see the Central Administrative Court's ruling appealed to the Supreme Court to decide whether the Central Administrative Court can nullify State-approved contracts and arbitration provisions. The SC should rule against the CAC. But if it sides with the CAC or refuses to hear the appeal, it serves a loud warning to both domestic companies, foreign companies and foreign governments that Thailand contracts cannot be trusted - no matter how binding those contracts may seem.

 

Prayut has already sent a similar message when he breached the provisions of a free trade agreement in his shutdown of the Kingsgate Gold Mine. Going forth any company or nation that engages the government in a contract and gets caught in such a similar web of deception and breach has only itself to blame.

So much for the NCPO projecting itself as the protector of Thailand's reputation.