Bangkok Will Not Pay 6th Installment Of Austrian Fire Vehicles

[george]

BMA insists it will not pay 6th installment of Austrian fire vehicles

BANGKOK: -- Deputy Bangkok Governor Malinee Sukvejchaworakij Monday insisted that the city administration would not pay the sixth installment of the purchase of fire vehicles from Australia.

Malinee said the Bangkok Metropolitan Administration hoped a committee of 11 public prosecutors would file charges against the supplier of the fire trucks and boats in time for the BMA to prevent the Krung Thai Bank from remitting the sixth installment worth Bt750 million to the supplier through an Austrian bank.

The sixth installment is scheduled to be paid on August 10.

The BMA has inked a contract to buy the fire vehicles for Bt6.687 billion from Steyr-Daimler-Puch. The BMA has paid five installments for the supplier for Bt3.905 billion but decided to cancel the purchase after the National Anti-Corruption Commission found that the project was full with corruption.

-- The Nation 2009-08-03

[nonthaburial]

Thats the BMA probably blacklisted by all potential future suppliers then

[bkkjames]

In reading the OP, I am a bit confused. Why would the BMA being paying Australia for firetrucks from Austria?

[dantilley]

In reading the OP, I am a bit confused. Why would the BMA being paying Australia for firetrucks from Austria?

That's what I thought, unless they were routed through Australia for some reason, or perhaps an Australian office of the Austrian company? A bit more explanation on this would be good.

[bkkjames]

In reading the OP, I am a bit confused. Why would the BMA being paying Australia for firetrucks from Austria?

That's what I thought, unless they were routed through Australia for some reason, or perhaps an Australian office of the Austrian company? A bit more explanation on this would be good.

Well, I was trying to give the nation the benefit of the doubt but.....

[dantilley]

Yeah, I mean they are one of the leading English language newspapers in Thailand, it's not as if they'd make such a howler as getting Austria and Australia mixed up...

[bkkjames]

Yeah, I mean they are one of the leading English language newspapers in Thailand, it's not as if they'd make such a howler as getting Austria and Australia mixed up...

I think I finally figured this out,, not the firetrucks, the nation. They use their website for spell checking purposes during the day, then things get flagged and corrected, then when the hard copy comes out tomorrow, it's ok.

Sneaky but effective.

[spongeman]

" The project was full with corruption "

Very strange to see LOS linked with corruption.

[stoneman]

And as I recall, all these vehicles and boats are still sitting on the dock and have been there for about 4 years,,

Stoneman

[TPI]

And as I recall, all these vehicles and boats are still sitting on the dock and have been there for about 4 years,,

Stoneman

It's odd that the BMA are trying to punish the supplier? Shouldn't they be after the corrupties rather than the corrupter. After all, they did supply what was ordered? Love this country!

[damo]

The may not want to remitt the sixth payment but did thet say anything about sending the unwanted goods back to the supplier. The trucks and boats were sold in good faith, a contract was signed.

BMA must think the Austrian supplier is like some other Thai enterprise and therefor the situation in hand. I hope the BMA gets shafted and the Austrians get paid this month.

Damo.

[zzaa09]

" The project was full with corruption "

Very strange to see LOS linked with corruption.

Siam will surely fall before long, as corporate and government corruption, graft, and the usual criminal activity have become the long accepted and understood norm. Will come back to haunt them. How overseas business interests continue to be friendly to assorted shenanigans and scallywags is beyond anyone's comprehension.

[KhaoNiaw]

Wasn't Aphirak forced to resign as governor of Bangkok because under him installments were paid in line with the contract made by the Samak administration? Wouldn't the current governor be similarly accused if more payments went ahead?

[bdenner]

In reading the OP, I am a bit confused. Why would the BMA being paying Australia for firetrucks from Austria?

That's what I thought, unless they were routed through Australia for some reason, or perhaps an Australian office of the Austrian company? A bit more explanation on this would be good.

Nothing to do with Australia. --- THE NATION --- Need say no more!

[LaoPo]

In reading the OP, I am a bit confused. Why would the BMA being paying Australia for firetrucks from Austria?

The typing error "Australia" was made by The Nation and the title of the topic is therefore correct, not the content of the article.

Steyr-Daimler-Puch is an Austrian company (AUSTRIA not Australia) and a daughter company from a US company: General Dynamics Corporation.

LaoPo

[robblok]

They should punish the corrupt officials on the thai side and make them pay back what they have stolen. That would be the right thing to do but here they do what Thais often do when it goes wrong... blame the foreigner.

[xbusman]

I have heard of this happening in government contracts before, no links to hard data but I think its more common than what is reported on. Big companies usually do some due diligence and know what the score is before selling anything here. Two rules, get your costs covered in the first payment before delivery, second, never invest more than you can walk away from. I think this sort of thing is pretty standard in the third world and items are priced accordingly.

[thaihome]

Both sides of a corrupt deal break the law and are equally guilty. Both the US and Austria have strict laws that follow the UN conventions on foreign corrupt business practices. I have yet to see any action taken by either the US or Austria to go after the seller that appears to have broken their own laws in this deal.

Aphirak resigned when he was included in the indictment as he signed the letter of credit on the advice of his legal team that if they did not they would be in default on the contract. Bad advice and he has been sacrificed to the altar of Thai politics.

This is an unusual case in the fact that the Thai side of the deal has actually been punished and the foreign side has not. There are numerous cases of the opposite being true.

TH

[slimdog]

Wasn't Aphirak forced to resign as governor of Bangkok because under him installments were paid in line with the contract made by the Samak administration? Wouldn't the current governor be similarly accused if more payments went ahead?

The present Bangkok Governor, M.R. Sukhumbhand, was elected into office in January 2009. A month after taking office, the BMA paid a further installment to the supplier.

Former Governor Apirak, resigned from office in November 2008, after being indicted by the NCCC for his role in the scandal. From what I can make out:

2003

• A Government to Government (G2G) contract was signed between Thailand and Austria. This exchanged a combination of Firetrucks, Fireboats and modified pick-ups (Austria) with Cooked Chickens (Thailand).
  
• Bangkok Fire and Rescue department was transfered from the Police Department to the BMA
  
• Steyr was purchased by the American corperation, General Dynamics
  

It is not stated, but it appears as though both the transfer and foreign acquisition voided the original G2G contract, and a new contract was made for purchase to be paid in cash, with the BMA paying 40%, and the Interior Ministry the remaining 60%.

2004

• On his last day in office, Samak Sundaravej signed a MOU with the supplier Steyr
  
• Apirak opened a letter of credit, which formally allowed the deal to commence
  

Apirak always stated that he was pressured by the Interior Minister to open the letter of credit.

What is also known is that some of the people involved didn't fully appreciate that once the Fire and Rescue department was taken over by the BMA, they would no longer enjoy the privilege of Duty Free imports which the Police (and Armed Services) enjoy.

2006

• The first consignment of the firetrucks were delivered
  
• It was found that the modified pickup's chasis was actually made in Thailand and then exported to Austria for refitting.
  
• The BMA were presented with a large import duty bill, for which they had no budget
  

2008

• The BMA were taken to court for 117 million baht for unpaid storage charges
  

Since then, the trucks have been left in customs, and every 6 months the BMA threaten to cancel the payment, the NCCC threaten to take the matter to court, everyone pleads innocent of any wrong doing, the Fire and Rescue department plead to have their firetrucks, and everyone seems to say the matter is mired in total corruption, although they are not sure exactly what the corruption was....

Edited August 4, 2009 by slimdog

[borovik]

In reading the OP, I am a bit confused. Why would the BMA being paying Australia for firetrucks from Austria?

That's what I thought, unless they were routed through Australia for some reason, or perhaps an Australian office of the Austrian company? A bit more explanation on this would be good.

it is common mistake in Asia:Austria/Australia;very often they do not know the difference!

[billd766]

In reading the OP, I am a bit confused. Why would the BMA being paying Australia for firetrucks from Austria?

That's what I thought, unless they were routed through Australia for some reason, or perhaps an Australian office of the Austrian company? A bit more explanation on this would be good.

it is common mistake in Asia:Austria/Australia;very often they do not know the difference!

Slightly off topic.

In the West they often get confused between Thailand and Taiwan.

[nonthaburial]

For the record, the first shipment of vehicles, about 70 I believe were imported and stored in Bang bua Thong, where they are still sitting, some under cover. but the big units fully open to the elements, they will need a very expensive inspection and repair programme to become operational. The second shipment plus a number of containers are still in the docks at Laem Cha Bang.

The statement made that the pick up chassis were made in Thailand is true, but to a much higher spec than the locally sold models. these were actually purchased from Mitsubishi UK then shipped to a fire truck outfitter in Belgium ( Somati) who produced the final fire unit. All Mitsubishi pick ups purchased in Europe originate in Thailand, but as I have said to a much higher spec.

Over the years there have been a number of "red herrings" bandies about. even the original Press Conference when the order was finalised AUSTRALIA was substituted for AUSTRIA.

OK there are disputes etc etc but I would have thought that with the monies paid to date, Fire trucks of that value should now be out on the roads operational saving lives not sitting rotting.

[mrtoad]

Both sides of a corrupt deal break the law and are equally guilty. Both the US and Austria have strict laws that follow the UN conventions on foreign corrupt business practices. I have yet to see any action taken by either the US or Austria to go after the seller that appears to have broken their own laws in this deal.

Aphirak resigned when he was included in the indictment as he signed the letter of credit on the advice of his legal team that if they did not they would be in default on the contract. Bad advice and he has been sacrificed to the altar of Thai politics.

This is an unusual case in the fact that the Thai side of the deal has actually been punished and the foreign side has not. There are numerous cases of the opposite being true.

TH

Well that may be true, but this would only be the case if the seller was actually handling money and kicking it back, so as to speak. It's quite common on a number of trades for there to be a commission spread, and the buyer pays commission - i.e Gross and net price, with the difference going to the people who make the deal happen. Obviously within private business to business this is more common, although one would not expect that a public entity would be involved in such a practice. In the end we have all got half a story here, but it is quite clear that the deal is somewhat dubious, and that the original instigator of it goes back to Thaksins puppet PM Samak, who was the then Bangkok Governor. The question, is jut how much money was skimmed? And who have been the ones getting the money? It surely can't be that difficult to work out.

[thaihome]

Both sides of a corrupt deal break the law and are equally guilty. Both the US and Austria have strict laws that follow the UN conventions on foreign corrupt business practices. I have yet to see any action taken by either the US or Austria to go after the seller that appears to have broken their own laws in this deal.

Aphirak resigned when he was included in the indictment as he signed the letter of credit on the advice of his legal team that if they did not they would be in default on the contract. Bad advice and he has been sacrificed to the altar of Thai politics.

This is an unusual case in the fact that the Thai side of the deal has actually been punished and the foreign side has not. There are numerous cases of the opposite being true.

TH

Well that may be true, but this would only be the case if the seller was actually handling money and kicking it back, so as to speak. It's quite common on a number of trades for there to be a commission spread, and the buyer pays commission - i.e Gross and net price, with the difference going to the people who make the deal happen. Obviously within private business to business this is more common, although one would not expect that a public entity would be involved in such a practice. In the end we have all got half a story here, but it is quite clear that the deal is somewhat dubious, and that the original instigator of it goes back to Thaksins puppet PM Samak, who was the then Bangkok Governor. The question, is jut how much money was skimmed? And who have been the ones getting the money? It surely can't be that difficult to work out.

Done much business in Thailand? With Government entities?

The usual practice is the seller includes in his price a “commission” to an agent of about 2% upwards of 10%, which is paid to a third party offshore from Thailand, thereby making it very difficult to trace the “commission” unless the home country of the seller is also investigating and has looked at the sellers books.

The third party then does something with the money that the seller has no knowledge of and therefore is in compliance with foreign corrupt business practice laws of his country. The only ones you hear about are usually very clumsily done with the airport scanners and the TAT film festival being prime examples of small time people trying get in on the action.

As another said, this deal fell apart when the custom duty came due (though why no BOI exemption was applied for I don’t understand) and there was no budget to pay it. There is very little chance the actual circumstances will ever be proven (unless Austria or the US start an investigation) nor that the equipment will ever do anything but rot in yard.

TH