BMTA advised to scrap NGV bus deal

[webfact]

BMTA advised to scrap NGV bus deal

 

 

BANGKOK: -- The Office of the Attorney General has advised the Bangkok Mass Transit Authority (BMTA) to hold off taking delivery of all the NGV-powered buses from its supplier, Bestlin Group, unless there was clear evidence to prove the buses were really assembled in Malaysia.

 

This latest advice prompted the BMTA to consider the possibility of cancelling the bus deal with the company.

 

It has until February 15 to make decision.

 

BMTA director Surachai Eamwachirasakul disclosed after a meeting to address the issue of the purchase of 489 NGV buses.

 

He said that the OAG has already forwarded documents to the BMTA requesting that they hold off taking delivery of the vehicles until the Customs Department can clearly indentify the actual origin of the buses.

 

Meanwhile the Customs Department revealed that it is still conducting in-depth investigations on the matter and has proposed that the BMTA consider the possible cancellation of the purchase contract if the deliveries are not made within the prescribed period.

 

The two agencies advised that this must be done with strict compliance to Term of Reference (TOF) agreements.

 

Full story: http://englishnews.thaipbs.or.th/bmta-advised-scrap-ngv-bus-deal/

 

-- © Copyright Thai PBS 2017-02-01

[gdgbb]

Surely the origin of the buses has been established as China as it has been reported that Bestlin has already paid the Customs Dept the import duty, which would not be due if they were assembled in Malaysia, and a fine for attempting to evade the import tax.

[Srikcir]

3 hours ago, webfact said:

This latest advice prompted the BMTA to consider the possibility of cancelling the bus deal with the company.

That would be a breach of contract. Amazing that the OAG would make such a recommendation.

 

The purchase contract specifies the price and delivery dates. BMTA has registered the 489 buses and begun "checking" the buses - I assume for operational compliance as per the contract. Five of the registered buses were put on test run on five bus routes as part of the TOR during Janurary 19-21 under the supervision of the bus acceptance committee, mechanical experts from King Mongkut Technological Institute, Lat Krabang campus and representatives of Bestlin Group. According to BMTA Director Surachai, the buses have passed the test.  http:/englishnews.thaipbs.or.th/test-run-contraversial-ngv-buses-satisfactory/

 

What grounds then does BMTA have to cancel the order?

 

Whether the buses were fully assembled in China or partially assembled in Malaysia is not a procurement matter. Whether Bestlin must pay import taxes is solely a matter for Customs, albeit such would reduce Bestlin's profit margin but that is not a matter for BMTA. Any tax owed and/or paid by Bestlin has no effect on BMTA's purchase price. To the extent that the matter with Customs delays full delivery in accordance to the TOR and to the extent that BMTA can show harm by such delay (buses were being added to existing bus fleet on current routes to increase capacity so proving damage might be difficult) BMTA can claim compensation - questionable that it can cancel the entire contract however.

 

Should BMTA breach the contract for reasons beyond the terms of the contract, it sends a message to the world that Thai procurement process is arbitrary and capricious with little or no respect for contract law (perhaps obvious already).  Foreigners risk doing business in Thailand and might consider not accepting business from Thailand. Thailand 4.1

[Puccini]

2 hours ago, Srikcir said:

,...The purchase contract specifies the price and delivery dates. BMTA has registered the 489 buses and begun "checking" the buses - I assume for operational compliance as per the contract. Five of the registered buses were put on test run on five bus routes as part of the TOR during Janurary 19-21 under the supervision of the bus acceptance committee, mechanical experts from King Mongkut Technological Institute, Lat Krabang campus and representatives of Bestlin Group. According to BMTA Director Surachai, the buses have passed the test.  http:/englishnews.thaipbs.or.th/test-run-contraversial-ngv-buses-satisfactory/

 

What grounds then does BMTA have to cancel the order?

 

Whether the buses were fully assembled in China or partially assembled in Malaysia is not a procurement matter. Whether Bestlin must pay import taxes is solely a matter for Customs, albeit such would reduce Bestlin's profit margin but that is not a matter for BMTA. Any tax owed and/or paid by Bestlin has no effect on BMTA's purchase price. To the extent that the matter with Customs delays full delivery in accordance to the TOR and to the extent that BMTA can show harm by such delay (buses were being added to existing bus fleet on current routes to increase capacity so proving damage might be difficult) BMTA can claim compensation - questionable that it can cancel the entire contract however.

 

Should BMTA breach the contract for reasons beyond the terms of the contract, it sends a message to the world that Thai procurement process is arbitrary and capricious with little or no respect for contract law (perhaps obvious already).  Foreigners risk doing business in Thailand and might consider not accepting business from Thailand. Thailand 4.1

 

The purchase contract probably specifies a few things in addition to the price and delivery dates.

 

Other news articles on these buses indicated that it was always understood that the buses would essentially be made in China but that additional work would be done on them in Malaysia to add sufficient additional value to them to make them qualify for the reduced import tariff for buses made in Malaysia. The question, therefore, is whether Malaysia (or any member country of ASEAN) was specified as the country of origin for import tariff purposes in the purchase contract.

[elgordo38]

4 hours ago, gdgbb said:

Surely the origin of the buses has been established as China as it has been reported that Bestlin has already paid the Customs Dept the import duty, which would not be due if they were assembled in Malaysia, and a fine for attempting to evade the import tax.

If the deal is cancelled does Bestlin get their import duty money back. I have not seen such a Cluster well you know since my first marriage when I was "in love"

[elgordo38]

3 hours ago, Srikcir said:

Amazing that the OAG would make such a recommendation.

This is after all Amazing Thailand. More twists and turns than a corkscrew.

[MikeN]

After god knows how long they finally have these buses, why on earth cancel the contract ? Let the importers and Customs sort out the tax side, and get the buses on the road......unless of course somebody sees a chance for another lot of tea money somewhere down the line ?

[impulse]

4 hours ago, Srikcir said:

Should BMTA breach the contract for reasons beyond the terms of the contract, it sends a message to the world that Thai procurement process is arbitrary and capricious with little or no respect for contract law (perhaps obvious already).  Foreigners risk doing business in Thailand and might consider not accepting business from Thailand. Thailand 4.1

 

I think that horse bolted a few years back on the Rolls Royce jet engine deal- which is probably the tip of a very big iceberg.

 

Given that the legally mandated import duties and penalties are so high, there's no way this is getting solved above board that sees Bestlin staying solvent.  Which pushes the solution into graft and corruption land.

 

There's a good chance nobody wants to touch this thing, lest they get the same scrutiny in a few years that some people are now feeling for dealing with Rolls Royce.  Only with hundreds of buses sitting in a lot as a reminder, and media scrutiny from day one they may not even get to spend their graft before it bites them in the butt.

[gdgbb]

20 hours ago, Srikcir said:

 

Whether the buses were fully assembled in China or partially assembled in Malaysia is not a procurement matter.

Apparently it is. The contract stipulated that the buses were to have been assembled in Malaysia.

[Langsuan Man]

Unbelievable, the busses are here, they pass the safety checks, duty has been paid, yet the people of Bangkok still don't have the non polluting air conditioned busses they were promised because everyone is worried about covering their own a..es

 

If we have to live under a military dictatorship why can't we get some good out of the junta (other than lowering the cost of lottery tickets) and use Article 44 for get the damn busses on the streets of Bangkok , thus bringing some real joy to the people 

 

Or are they going to dither around and have the busses become just like the fire equipment that sat in a field for years and was eventually deemed to be worthless 

 

 

 

[gdgbb]

16 hours ago, elgordo38 said:

If the deal is cancelled does Bestlin get their import duty money back. I have not seen such a Cluster well you know since my first marriage when I was "in love"

I would doubt it, why should it be refunded?  Bestlin's associate company imported the buses, what happens to them after the importation and payment of duty is not the Customs Dept's responsibility, it is Bestlin's.  The Customs Dept was not a party to the procurement contract.

[Srikcir]

1 hour ago, gdgbb said:

Apparently it is. The contract stipulated that the buses were to have been assembled in Malaysia.

Have you seen the contract?

I have not but such a condition practically has no application to the purchase. Why should it?

 

All that's been mentioned publically about the TOR is the price, number of buses, delivery schedule and performance requirements. It was Customs that initially raised the issue of import tax - not BMTA. Remember that Bestlin had in effect forced BMTA to award them the contract when Bestlin threatened to sue BMTA for awarding the contract to the only other vendor for collusion. With Bestlin's award the lawsuit was withdrawn. It would be logical that BMTA might seek revenge against Bestlin (losing a corrupt opportunity?) for that lawsuit by using the Customs' issue as an excuse to threaten breaking the contract, perhaps to negotiate some "benefit" that BMTA might have received with the original vendor award.

[elgordo38]

4 hours ago, gdgbb said:

I would doubt it, why should it be refunded?  Bestlin's associate company imported the buses, what happens to them after the importation and payment of duty is not the Customs Dept's responsibility, it is Bestlin's.  The Customs Dept was not a party to the procurement contract.

Guess your right somebody has to be left holding the bag when the music stops. 

[gdgbb]

On 02/02/2017 at 1:10 PM, Srikcir said:

Have you seen the contract?

I have not but such a condition practically has no application to the purchase. Why should it?

 

All that's been mentioned publically about the TOR is the price, number of buses, delivery schedule and performance requirements. It was Customs that initially raised the issue of import tax - not BMTA. Remember that Bestlin had in effect forced BMTA to award them the contract when Bestlin threatened to sue BMTA for awarding the contract to the only other vendor for collusion. With Bestlin's award the lawsuit was withdrawn. It would be logical that BMTA might seek revenge against Bestlin (losing a corrupt opportunity?) for that lawsuit by using the Customs' issue as an excuse to threaten breaking the contract, perhaps to negotiate some "benefit" that BMTA might have received with the original vendor award.

No, obviously I haven't seen the contract, but what I mentioned has been reported even though you may not have seen it.

 

There's nothing logical about your bizarre, speculative last paragraph.