Contractor claims 20% kickback to politicians

The going rate was 20 per cent of a project's value.

One contractor said he paid the 20-per-cent sum to politicians in return for a construction project. The kickback was paid immediately after the contract was signed.

He admitted such payments had been common for a long time, particularly when contracts involved government projects.

"But the rate has never before been this high," the contractor said.

Transport Minister Sophon Saram said he had never heard of this kind of kickback.

"Procedures of any project under the TKK scheme by the Transport Ministry are transparent," he said.

The Transport Ministry was allocated Bt39.9 billion from the Bt1.43-trillion TKK package for disbursement during the next three years. Of that, Bt1.18 billion was allocated to the Land Transport Department, Bt58 million to the Civil Aviation Department, Bt23.63 billion to the Highways Department and Bt15.03 billion to the Rural Roads Department.

Of the total, Bt27.55 billion will be disbursed in fiscal 2010, Bt11.96 billion the next fiscal year and Bt378 million in fiscal 2012.

On October 13, the Cabinet approved budgets of Bt530 million for the State Railway of Thailand, Bt11.12 billion for the Highways Department and Bt5.979 billion for the Rural Roads Department. The last two were for the Dust-Free Road scheme.

The contractor said the huge kickbacks might cause many jobs to be left unfinished, because of the higher operating costs at a time when oil and construction-material costs were also rising. In the end, many projects under the stimulus package could be left incomplete.

He said some construction-material distributors had confirmed the cost of construction materials - particularly steel - would rise 10-15 per cent early next year, in line with oil prices.

Many contractors may desert construction projects next year, when much of the investment budget is disbursed. Although they have tools with which to manage oil and construction-material costs, many can see problems in managing cash flow after paying the 20-per-cent kickbacks, he said.

And while this will affect workers, construction-material suppliers will also be at risk if their clients leave jobs unfinished.