Water project contenders concerned TOR 'place all risk on their shoulders'

The six contenders for contracts to develop the country's water and flood management systems are pressing ahead with their planned bids despite concern that the terms of reference (TOR) contain clauses that affect the chances of each project being completed on time.

Monthon Panupokin, managing director of Korea Water Resources Corp (K-water), which has qualified to bid for all nine modules, said after a meeting with the Prime Minister's Office about the details and guidelines that the TOR had some articles that would impact on the construction process, especially in regard to difficulties with people living in the communities around the various project sites.



"The budget for all nine modules includes the cost of moving the people living around the projects, should the projects need to appropriate land currently in private hands," he said.

K-water does not have authority to expropriate land or move people from their land, which is why the projects may be delayed from the original plan, he added.

However, he said the corporation would continue to participate in the bidding for all nine modules, even though the period in which to provide all the documentation is only 45 days, which means it must be submitted by May 3.

Italian-Thai Development executive vice president Sumate Surabotsopon, representing the joint-venture group ITD-Power China, said the group would also continue to propose details for all nine modules to the Water and Flood Management Commission.

"However, we are concerned about the need for more detail about when the projects actually kick off, because [in the TOR] the government has said that when it comes to any conflicts that could arise, such as land expropriation, paying for expropriation and moving people, this is currently to be covered by the amount put forward in the bids," he said.

Virach Rungrojsarathit, a representative from Thai-Japanese Joint Venture, said his group was worried about land expropriation from local communities as the private sector had no authority to take land back from local people, and such problems could cause delays in construction.

Moreover, the group is concerned about the compensation that might be paid by the government in the event of a delay in construction.

"We have to shoulder all risk by ourselves," he said.

Apichart Anukularmphai, a member of the Water and Flood Management Commission, said every company or consortium having passed the prequalification stage must submit the necessary documentation to cover each of the modules in which they expressed an interest.

The submission of only partial documentation for a module would result in rejection by the commission.

Meanwhile, the commission stands already to support the eventual bid winners in the event of any conflict in regard to land expropriation, he said, adding that if such a conflict resulted in a project's delay, it would also consider extending the contract.

However, Apichart said that all nine modules had been carefully drawn up in such a way that there should not be too high a level of expropriation of land from local people, especially for flood-diversion channel projects.

The aim was to keep the overall budget manageable by paying compensation to affected local communities only when necessary.

Prime Minister's Office permanent secretary Thongthong Chantarangsu said his office had invited the six prequalified bidders to hear the details and guidelines of the TOR after the Cabinet had given the green light for the mega-investment project on Tuesday.

They had been informed about the legal and technical provision to present their final plans for the water and flood management infrastructure and system to the by May 3.

The ONWFMP will then study the proposals and give each contender an overall score for technique and the construction cost of each project.

Those proposing the best technique and best price for each project will be named as the successful bidders.

The process for selecting the successful bidders must be completed by end-June as the royal decree on lending, which was passed last year, authorises the government to seek loans within the next three months, he said.

Thongthong suggested that the final plans from the six contenders should include all types of expenditure required for each project.

Moreover, they should consider that they would have to shoulder all risk during the construction period by themselves. The government will take responsibility only for unexpected incidents arising from the operations of a state agency, he warned.

"However, an extension of the length of a project is the only compensation the government will give to the companies.

"We will not give them financial compensation for any unexpected mistakes by a government agency," he added.